Commission also orders AV Water to preserve its assets unless money is needed for "reasonable and necessary expenses"

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FARMINGTON — The New Mexico Public Regulation Commission today unanimously approved an order calling for an emergency hearing next week in Santa Fe regarding transferring operational power of the Harvest Gold water system, owned by AV Water Co., to the Blanco Mutual Domestic Water Users Association.

It also unanimously approved an order for AV Water to preserve its assets, including financial assets. The company will be permitted to use assets only for "reasonable and necessary expenses."

The emergency hearing was proposed by Chairman Sandy Jones and Commissioner Lynda Lovejoy. The hearing will be during the commission's regular weekly meeting, which starts at 9:30 a.m. Wednesday in Santa Fe. The meetings are streamed live on the commission's website.

The transfer of operational power to Blanco would allow the mutual domestic water users association to receive revenue from the sale of water to Harvest Gold customers. That money would be used to pay for operations and repairs of the Harvest Gold system. Blanco would also use money it received from the state to connect Harvest Gold to its system.

Jones said transferring operational power is the fastest way to get customers off a boil water advisory that was issued in June.

AV Water attorney Germaine Chappelle said the company supports the emergency hearing and transfer of operational power to Blanco. Blanco has expressed interest in taking over the Harvest Gold system and ultimately making the subdivision, which is east of Bloomfield, part of its mutual domestic water users association.

"We are wanting to do anything we can to make that happen," Chappelle said.

Commissioner Cynthia Hall proposed the second order in response to Jones' concerns the company could sell off assets or use money from the water system to pay its owners or other related companies.

Chappelle said AV Water is not selling off assets or siphoning money from the water system to pay related companies or the owners.

She said the opposite is happening. Chappelle said Animas Valley Land and Water, which is a separate company owned by the same people, has sold real estate assets and made the funds available to AV Water to pay expenses such as bills from the city of Farmington. AV Water's Morningstar system, which serves Crouch Mesa, was connected to the city of Farmington in the summer to get those residents off a boil water advisory that was issued in June. That boil water advisory was lifted in September.

Commissioner Patrick Lyons expressed concerns the order could prevent the company from making repairs. Earlier in the meeting, Commissioner Valerie Espinoza mentioned a water line break on AV Water's Morningstar system. Espinoza said the break left customers in that area without water.

Lyons said the company may need to sell assets to pay for repairs.

"If they can't sell something, then the system shuts down," he said.

Russell Fisk, PRC counsel, said the order would allow the company to sell assets if it needed money to make repairs.

"I don't think it ties their hands," Jones said. "It just tells them, 'We're watching you.'"

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.

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