Article in The Albuquerque Tribune: County seeks funds to buy water utility

The battle to control a portion of Albuquerque’s water supply took a step forward with the Albuquerque Bernalillo County Water Utility Authority’s request for $50 million in bonds.

The money, if approved, could be used to buy New Mexico Utilities Inc., a water and sewage company serving roughly 41,000 people in northwestern Albuquerque and northern Bernalillo County.

Citing concerns over the company’s management of water resources, the authority has long sought to buy New Mexico Utilities, a subsidiary of a California company, or make it comply with the authority’s expectations.

With negotiations stalling, the authority has threatened to condemn the company in order to force it to sell, said authority board Chairman Alan Armijo.

He said pursuing the $50 million bond – which would be up for approval at the authority’s Jan. 25 meeting – is one step to prepare for a purchase.

It is too soon to know whether the conflict might go to court, as negotiations are still possible, Armijo said.

If the two sides did go to court, that’s where they would argue the sale price for New Mexico Utilities.

The company puts its value at roughly $100 million, said Vice President and General Manager Bob Gay.

The authority puts the company’s value at $31.7 million. Armijo said the extra money in the bond request would allow for adjustments in the final price.

A court case and buyout could be avoided entirely if New Mexico Utilities managed its water in the way requested by the city-county water authority, Armijo said.

That could include the company doing the following:

Adopting more water-conservation measures, like those of the city’s.

Increasing what it charges customers for water.

Purchasing more water rights to make up for depletions to the supply.

Assuring it would take responsibility for any depletions to the water supply if the company were to leave the state.

Gay said the company has no plans to leave New Mexico.

New Mexico Utilities is restoring the water it is required to, he said, and increasing the price would be an unnecessary burden on customers.

He also says customers of New Mexico Utilities have reduced their per-capita water use more than customers on the city’s water system.

The city’s per-capita water use for residential customers dropped 26.1 percent between 1996 and 2005, according to the authority’s figures.

New Mexico Utilities’ per-capita water use for residential customers went down 30.1 percent in the same period, according to New Mexico Utilities.

However, from 1996 to 2005, the company’s total water use went up by 73.3 percent as its number of accounts grew by 253 percent.

In the same period, the city’s total water use went down 16.5 percent while the number of accounts went up 20.9 percent.

Gay said New Mexico Utilities will argue the company’s value in court if necessary.

“You always hope these things don’t happen, but they didn’t catch me completely off guard,” he said.

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