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New Mexico Water Service announces agreement to acquire AV Water assets

Hannah Grover
Farmington Daily Times
AV Water's Morningstar Water System may soon be sold to New Mexico Water Service.

AZTEC — A water utility whose customers had to boil water for months in 2016 may soon have a new owner after the previous owner declared bankruptcy and virtually walked away from the system.

A press release issued earlier this month by California Water Service Group announced an agreement between its subsidiary, New Mexico Water Service, and the court-appointed receiver of AV Water’s Morningstar Water System to purchase the water utility that serves Crouch Mesa and surrounding areas.

This comes as AV Water has asked the New Mexico Public Regulation Commission for a rate increase that will allow the utility to pay some of its bills and get on better footing for a new buyer.

Cynthia Apodaca, the general manager of New Mexico Water Service, said protecting the health and safety of the customers is the priority for the company, and that has not always been the case for AV Water customers in the past. She said this could mean investing in capital improvements for the AV Water system.

Apodaca said the company has been talking with AV Water for a while and is familiar with the challenges the customers have faced.

"It's known in this industry that this was a troubled system," she said.

She said the company is interested in growing and the Morningstar system, which serves approximately 2,000 customers, is an opportunity to grow and to expand into a part of the state where New Mexico Water does not yet operate.

When asked what she would like customers to know, Apodaca said, "In New Mexico Water Service they have someone who is dedicated to the highest level of water service. We are not developers. This is our number one business."

The Morningstar system has been owned by land developers in the past.

The California Water Service Group has water and wastewater utilities in four states including New Mexico, California, Hawaii and Washington.

The sale must be approved by the district court as well as the PRC, and AV Water has not yet filed documents with the PRC to start the process of transferring the ownership New Mexico Water Service. According to the press release, the sale is expected to close in 2021.

Daryl Gore, with the Flora Vista Mutual Domestic Water Association, opens up a fire hydrant in 2016 to flush out the Morningstar water system in Crouch Mesa.

“We appreciate the confidence in New Mexico Water to provide a reliable supply of safe, high-quality water to AV Water customers,” said the group’s president and chief executive officer Martin A. Kropelnicki in the press release. “We look forward to providing AV Water customers the same quality, service, and value that we are committed to delivering to all of our customers, as we continue through the due diligence and approval process.”

New Mexico Water’s involvement in the state dates back to 2002 when it purchased the Rio Grande Water System, now called Rio Communities. Since then it has acquired other systems and currently serves Rio Communities, Rio Del Oro, Meadow Lake, Indian Hills, Squaw Valley, Elephant Butte, Sandia Knolls, Juan Tomas and Cypress Gardens systems. It has approximately 16,000 customers in the state. It is regulated by the PRC and operates in four New Mexico counties.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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