STATE CAPITOL, PHOENIX – State Representative David Marshall today submitted a letter to the Arizona Corporation Commission opposing the City of Sedona’s effort to force a multi-million-dollar cost shift onto Arizona Water Company ratepayers throughout northern Arizona who don’t live in Sedona.

At issue is the City’s requirement that Arizona Water Company bury a new water storage tank underground and disguise it with a fake home built on top—an aesthetic demand that made the project one of the most expensive the utility has ever undertaken.

“The principle of cost causation—wherein those who drive up costs should be the ones to pay for them—is fundamental to fair ratemaking,” said Representative Marshall. “Sedona’s plan is antithetical to fair and ethical ratemaking and should be an easy rejection by an impartial Corporation Commission.”

The City of Sedona’s extravagant design mandate benefits only local residents, yet the city is attempting to force water customers in other communities to subsidize the unnecessary increase in cost for its aesthetic requirements.

“Arizona Water Company’s northern Arizona ratepayers—including the good people of Pinetop-Lakeside, Heber-Overgaard, Rimrock, Munds Park, and the Village of Oak Creek—did not ask for these costly design features,” Representative Marshall said. “Quite frankly, it’s absurd to ask them to fork over millions to subsidize the excessive, big-government design mandates of a city nearly 200 miles away.”

In his letter, Representative Marshall urges the Commission to follow established precedent and ensure that the exorbitant costs associated with the purely aesthetic design upgrades are borne only by the ratepayers of the community that imposed them. Arizona law and Commission rulings make clear that when a city mandates the undergrounding or similar enhancements of utility structures, only local ratepayers should bear the added cost.

“This is a matter of fairness and affordability,” Representative Marshall added. “Sedona chose to inflate the cost of this project for its own benefit. The rest of northern Arizona shouldn’t be stuck footing the bill for Sedona’s multi-million-dollar expectations.”

The letter can be found here: https://docket.images.azcc.gov/E000045408.pdf?i=1753298931319.

David Marshall is a Republican member of the Arizona House of Representatives serving Legislative District 7, which includes Pinal, Gila, Coconino, and Navajo Counties. He also serves as Chairman of the House Committee on Public Safety & Law Enforcement. Follow him on X at @DaveMarshallAZ.