The state will have its first formal hearing on the K2 well next week.
The K2 well is a proposed joint venture by the Pine Strawberry Water Improvement District and the Pine Water Company/Brooke Utilities Inc.
The well site is in Strawberry, and if sufficient water is found after deep drilling, it will be used to serve the residents of Pine. If there is any excess, it will be made available to water company customers in Strawberry.
The district will provide $300,000 for the deep drilling. The water company will spend up to $1 million to develop and put the well into production if it proves viable. As part of the deal, the district will gain title to the property if the well is not productive.
To make the title available, the company must have authorization from the Arizona Corporation Commission. The Oct. 26 hearing is on the request by the company to encumber the K2 site.
The ACC has heard testimony on the K2 well during its hearings on allowing a group of property owners to remove their land from the water company service area.
The well proposal has drawn so much criticism, a group has organized -- Rim Country Water -- to seek ways of forming a new domestic water company and is now fielding candidates for the PSWID board.
Among the issues of concern: the district giving the water company taxpayer money, in what some view as too risky a venture and the perceived secondary status of Strawberry residents' water needs.
"There are lots of grants and federal grants and loans that can be used," said Fred Krafczyk, spokesman for RCW and one of its organizers.
RCW meets the second Sunday of every month at the Pine Community Center Cultural Hall.
At its Oct. 14 meeting, the financing options to purchase the water company were discussed with about 100 people in attendance, Krafczyk said.
He said a large contingent of area residents would be attending the Oct. 26 hearing on the K2 well.
"The ACC is also going to have a public meeting in Pine to hear more public input," he said. A date has not been set yet, Krafczyk said. The ACC staff is working to find a date when at least three of the corporation commissioners are available.
The commission hearing on separating property from the water company's service area has been going on since August and will continue in November.
The PSWID board election is in March and between four and five seats will be open, Krafczyk said. In the early days of its organization, the people involved with RCW had discussed recalling some of the district board members, but did not pursue it.
The K2 hearing before ACC Administrative Law Judge Dwight Nodes is at 10 a.m., Friday, Oct. 26 in Phoenix.
Problems have long history
The state has been watching the Pine water situation closely for many years.
It has imposed different moratoriums on hook-ups for water service, from a limited number to the current no new meters; ordered Pine Water Company to find new sources of water; and held numerous hearings in the area for residents.
The Pine area is frequently plagued by limited water supplies in the summer, often resulting in water hauling at high prices.
This year, Strawberry suffered its first outages.
Two private parties have been successful in finding new water sources: Loren Peterson, who was allowed to form the Strawberry Hollow Water District; and more recently, Ray Pugel and Robert Randall, who drilled and found substantial water at their Milk Ranch well.
Efforts to bring the new water into the PWC system have been unsuccessful.