NOTICE OF PUBLIC COMMENT SESSION

The Arizona Corporation Commission (“Commission”) is taking public comment on Bella Vista Water Co., Inc.’s (“Applicant”) revised Tariff No. 10 dealing with Applicant’s Curtailment Plan.

The public comment session is scheduled for December 15, 2004 commencing at 6:00 PM and continuing until 8:00 PM if necessary:

Oscar Yrun Community Center
3020 East Tacoma Street
Sierra Vista, Arizona 85635

A copy of the revised tariff is available for inspection during regular business hours at the offices of the Commission in Phoenix and Tucson, Arizona and at Applicant’s offices at:

Bella Vista Water Company, Inc.
4055 Campus Drive
Sierra Vista, Arizona 85635

REVISED CURTAILMENT PLAN FOR BELLA VISTA WATER

Authority.

Company is authorized to curtail water service to all customers under the following terms and conditions listed in this tariff.

This curtailment plan shall become part of the Arizona Department of Environmental Quality Emergency Operations Plan for the Company.

The Company shall notify its customers of this new tariff, or any amendment thereof, a no later than sixty (60) days after the effective date of the tariff or the applicable amendment.

The Company shall provide a copy of the curtailment tariff to any customer, upon request.

SOUTH SYSTEM CURTAILMENT PLAN

Definitions .

When capitalized in this Tariff, the following terms shall have the meaning set forth herein.

1. "Storage Capacity" means the combined total amount of capacity of the two storage tanks, out of the four major storage tanks shown on the attached Addendum, having the least amount of water in storage as
   
   The Company may, after notice to the Consumer Services Supervisor, Utilities Division, use an alternative definition of “Storage Capacity” in relation to specified storage tanks where Company determines the general definition is inappropriate or inadequate to implement curtailment in specific portions of its South System. In such circumstances, Company shall identify the critical storage tank or tanks involved and shall define the terms “storage capacity” and “stored water” in relation to the identified storage tank or tanks. The procedure set forth in this tariff will then be applied to curtail service to the customers served by the storage tank or tanks so identified after approval by the Utilities Division Director.
   
   
2. "Stored Water" means the amount of water in storage in the Storage Capacity.

Stage 1 Exists When :

1. The Company is able to maintain Stored Water at 85% of Storage Capacity and there are no known problems with its well production or water storage in the South System.
   
   
2. Under Stage 1, the Company is deemed to be operating normally and no curtailment is necessary.

Stage 2 Exists When :

1. The amount of Stored Water has been less than 85% of Storage Capacity for at least 48 consecutive hours; or
   
   
2. The Company has identified issues (such as a steadily declining water table, an increased draw-down threatening pump operations, leaks in the storage tanks, poor water production, higher than usual water demand, etc.) creating a reasonable belief the Company will be unable to meet anticipated water demand in the South System.
   
   
3. Under Stage 2, the Company may request the customers to voluntarily employ water conservation measures to reduce water consumption, including limiting outside watering to essential water, dividing outside watering on some uniform basis (such as even and odd days) and eliminating outside watering on weekends and holidays.

Stage 3 Exists When :

1. The amount of Stored Water has been less than 70% of Storage Capacity for at least 48 consecutive hours; or
   
   
2. The Company is having difficulty maintaining Stored Water 80% of Storage Capacity for a 24 consecutive hour period and the Company has identified issues (such as a steadily declining water table, an increased draw-down threatening pump operations, leaks in the storage tank, poor water production, higher than usually water demand, etc.) creating a reasonable belief the Company will be unable to meet anticipated water demand on a sustained basis.
   
   
3. Under Stage 3 the Company shall request the customers to voluntarily employ water conservation measures and eliminate all outside water, except livestock, and to employ indoor water conservation techniques wherever possible.

1. The amount of Stored Water has been less than 60% of Storage Capacity for at least 24 consecutive hours.
   
   
2. Under Stage 4 the following Mandatory Water conservation Restrictions shall be in effect after not less than 12 hours notice to the South System customers and the Consumer Services Supervisor, Utilities Division of the time Stage 4 will go into effect and the expected duration of Stage 4:
   
   
   1. Irrigation of outdoor lawns, trees, shrubs, or any plant life is prohibited.
      
   2. Washing of any vehicle is prohibited.
      
   3. The use of water for dust control or any outdoor cleaning uses is prohibited.
      
   4. The use of drip or misting systems of any kind is prohibited.
      
   5. The filling of any swimming pools, spas, fountains or ponds is prohibited.
      
   6. The filling of storage tanks or any other water hoarding is prohibited.
      
   7. Any other outdoor water intensive activity shall be prohibited.
      
   8. No new connections will be permitted

Stage 5 Exists When :

1. The amount of Stored Water has been less than 20% of Storage Capacity for at least 24 consecutive hours.
   
   
2. Under Stage 5, in addition to the Stage 4 Mandatory Water Conservation Restrictions, the Company shall:
   
   
   1. Utilize its potable tank to haul water and fill the system storage tanks in an effort to bring the Stored Water to between 25% - 30% of Storage Capacity.
      
      
   2. Be authorized to intentionally interrupt water service for up to four (4) consecutive hours, once a day at off peak times (i.e., between the hours of 10:00 pm and 4:00 am and 10:00 am and 4:00 pm) in an effort to bring the Stored Water to between 20% - 25% of Storage Capacity.
      
      
   3. If Stored Water falls to 15 % of Storage Capacity or less, be authorized to intentionally interrupt water service up to six (6) consecutive hours at any time during the day, in an effort to bring Stored Water to between 15% - 20% of Storage Capacity.

Notice.

1. Generally. The Company shall provide its South System customers notice of Stages 2, 3, 4 and 5 by delivering written notice door-to-door at each service address or by United States First Class Mail, postage prepaid, to the billing address or, at the Company’s option, both. The Notice shall notify the customer of the need to conserve water and the general nature of the problem. The Notice shall also provide a number where questions will be answered. Where the Company has provided Notice of a curtailment stage, it will provide Notice that the stage has ended within one (1) business day of its termination.
   
   
2. Stages 2 and 3. Notice of Stages 2 and 3 may be provided separately or combined at the Company’s option. Such notice shall be provided no later than one (1) business day after the later of:
   1. The effective date of this Tariff; or
   2. The date the Stored Water has reached the designated level of Storage Capacity for the designated time period;or
   3. In the case of a combined notice, the date the Stored Water has dropped below 80% of defined Storage Capacity.
      
      
3. Stages 4 and 5. Notice of Stages 4 and 5 shall be noticed separately and shall be given to the Company’s South System customers and the Consumer Services Supervisor, Utilities Division not less than 12 hours before the mandatory conservation measures of that Stage is effective.
   

Such Notice shall specify what mandatory water use restrictions are in effect, when the restrictions go into effect, how long the restrictions are likely to be in effect and that violations of the mandatory water use restrictions will subject the customer to immediate termination of water service without further notice; provided, however, persons will receive one warning if notice is provided only by United States mail and the violation occurs within three business days of the Notice being placed in the United States mail. The Notice shall also provide a number where violations may be reported and the customer can determine if the restrictions have been lifted.

Presumptive Violations.

Any customer using in excess of 600 gallons of water per day (i.e., at the rate of 18,000 gallons every thirty days) is presumed to be violating the mandatory restrictions imposed in stages 4 and 5. The notice of curtailment provided with stages 2, 3, 4 and 5 shall include the following:

“Any customer with water usage in excess of 600 gallons per day (i.e., equivalent to 18, 000 gallons per month) during a stage 4 or 5 curtailment is subject to having their water service terminated without further notice. According to the American Water Works Association, average daily indoor water use per person is between 52 and 74 gallons and includes: 9.6 –20.1 gallons for toilet flushing; 10 –12.6 gallons for a shower; 10.6 – 15.1 gallons to run a washing machine; 11 gallons from their indoor faucets; and 5 –10 gallons for leaks. 50 to 70% of home water is used outside for lawns and gardens. Using 600 gallons per day during a curtailment is generally unnecessary and contrary to the need to conserve water. To avoid termination, any customer believing its water usage for permitted usage will equal or exceed 600 gallons per day or more during a stage 4 or 5 curtailment should provide the Company written documentation that all their water use is for necessary purposes. Most outside watering is prohibited during stages 4 and 5 including: irrigation of outdoor lawns, trees (including orchards), shrubs, or any plant life; washing of any vehicle; dust control or any outdoor cleaning; any drip or misting systems; filling of any swimming pools, spas, fountains or ponds; filling of storage tanks, water hoarding; or any outdoor water intensive activity. Providing reasonable amounts of water to livestock and domestic animals is not prohibited.”

During stages 3, 4 and 5, as an aide to educating customers on conservation opportunities, Company may request customers to provide information regarding theirwater usage, including such things as the number of persons residing in the home, their ages, the number of showers, baths, and toilets, the type and number of pets and livestock, the type and nature of landscaping, whether an evaporative cooler is used, a description of the nature and size of all water features (such as pools, spas, ponds, fountains) and a statement of what steps the customer can take to reduce water usage, as well as any outdoor water usage that cannot be curtailed. Any request for information sent by the Company shall include the language set forth above. Failure to respond to the Company’s request for information shall not be grounds to terminate water service.

During stages 4 and 5, water service may be terminated without notice (except as required above) if water usage exceeds 600 gallons per day, unless the customer has provided Company written documentation satisfactory to Company that their water use is for necessary purposes. The level of water usage may be established by (i) determining the daily average water use from a regular monthly meter reading, provided mandatory conservation was in effect for the billing period, or (ii) averaging daily water usage from a special meter reading of any length while mandatory conservation is in effect. The special meter reading will be without charge to the customer.

Reconnection and Contesting Violation.

Any customer terminated for violating a mandatory water use restriction shall not be reconnected so long as the mandatory restrictions are in place; provided, however, Company shall reconnect any customer disconnected under the Presumptive Violation provisions of this tariff if the customer provides Company written documentation satisfactory to Company that their water use is for necessary purposes. Further, Company may allow reconnection during Stages 4 or 5 if (i) Customer provides written documentation satisfactory to Company demonstrating that prohibited water usage has ceased and will not reoccur; (ii) the Customer submits a statement of the conservation efforts it will implement if reconnected and (iii) Company determines reconnecting the customer will not unduly threaten water availability to its other customers.

Any customer terminated for violating a mandatory water use restriction, whether under the presumptive violation provision or otherwise, shall pay all applicable fees and charges authorized by the Arizona Corporation Commission before having service restored. This is in addition to any other remedy that may be available at law or equity for damages arising from the violation of the mandatory water use restrictions.

If a customer believes he/she has been disconnected in error, the customer should attempt to resolve the matter with Company but may also contact the Commission’s Consumer Services section at 1-800-222-7000 to initiate an investigation.

CITY SYSTEM CURTAILMENT PLAN

It is not practicable to design a single curtailment plan for the Company’s City System. Therefore, Company may, after notice to the Consumer Services Supervisor, Utilities Division, implement curtailment where production or storage issues are threatening the Company’s ability to provide water service to specific portions of the City System. In such circumstances, Company shall identify the critical storage tank or tanks involved and shall define the terms “Storage Capacity” and “Stored Water” in relation to the identified storage tank or tanks. The procedure set forth in this tariff will then be applied to curtail service to the customers served by the storage tank or tanks so identified after approval by the Utilities Division Director.

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