City of Surprise v. Arizona Corporation CommissionAnnotate this Case
The Supreme Court vacated the portion of the order of the Arizona Corporation Commission requiring a public utility to apply for Commission approval of a proposed condemnation, holding that Ariz. Rev. Stat. 40-285(A) does not give the Commission power over a city's exercise of eminent domain.
Section 40-285(A) gives the Commission authority to approve the sale or disposition of a public service corporation's assets. In the instant case, voters authorized and the city council approved the filing of a condemnation action by the City of Surprise of condemning substantially all the assets of Circle City Water Company, LLC, including the right to four thousand acre-feet of water per year from the Central Arizona Project (CAP). A residential developer asked the Commission to enter an order preventing the "sale" of Circle City's CAP allocation to the City. The Commission ordered Circle City to file an application under section 40-285 seeking Commission authorization to "dispose of" its utility. The Supreme Court vacated the order in part, holding that the Commission has no authority to regulate condemnations under section 40-285(A).