Utility Snatching Up Arizona Water Systems In Consolidation Effort

A utility with plans to consolidate Arizona’s water providers closed its first purchase this week.

Phoenix-based Global Water Resources “purchased Eagletail Water, just west of metro Phoenix, because it’s located near another utility Global owns,” KJZZ reported, citing CEO Ron Fleming.

“Global owns and operates 10 utility companies in and around metro Phoenix, recycling nearly 1 billion gallons of water annually. This acquisition is Global’s first since going public in 2003. Fleming said the company plans more,” the report said.

Fleming provided insight on the company’s goals.

He noted that “the purchase is part of a broader strategy to consolidate some of the smaller to medium-sized private utilities,” the report said.

“Ultimately that is the issue in the water industry — that it is highly fragmented,” Fleming said, noting that Arizona has 270 private water systems, and the nation has 80,000.

“The reason that that is, is kind of a physical reason, is that water is heavy. And to pump it and treat it and send it to your customers is very costly,” he said.

The company employs an approach it calls “total water management,” a term it uses to refer to integration of processes along the water cycle. The company aims to manage “the entire water cycle by owning and operating the water, wastewater and recycled water utilities within the same geographic areas in order to both conserve water and maximize its total economic and social value.”

The purchase of Eagletail Water Company “adds approximately 50 active water connections and six square miles of approved service area to Global Water’s existing regional service footprint. The acquired service area is adjacent to one of Global Water’s existing utilities, the Water Utility of Greater Tonopah,” according to a release from Global Water Resources.

The merger was not blocked by the Arizona Corporation Commission (ACC), which oversees public utilities in the state.

“Given the ACC's desire for consolidation of the highly-fragmented water utility industry in Arizona and their new policy guidelines that support and incent such consolidation, the stage is well set for additional acquisitions,” Fleming said in a statement.

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