The tentative out-of-court settlement between APS and the Aztec Land and Cattle Co. ends prospects for a trial in Navajo County Superior Court focused on property rights and the state's eminent domain laws, both parties said.
APS was trying to condemn rangeland owned by Aztec using eminent domain so it could pump water for the Cholla Power Plant near Joseph City.
The utility leased the water for nearly 35 years, paying $6 an acre-foot, which is 326,000 gallons. But the lease is set to expire in August, and Aztec was demanding an increase to $200 an acre-foot, a price cattle company said was market-rate.
APS offered $56,000 to buy six acres around each of its wells plus easements for access.
The firms failed to agree, and APS filed suit to condemn the land.
The settlement calls for the utility to pump only from six square miles it owns, said Steve Brophy, Aztec's president. The land company will no longer be paid for the water.
APS declined to detail specifics of the settlement.
Brophy said Aztec officials agreed to the settlement because it was the best deal the company could get under the state's eminent domain laws.
"The law subjects them (APS) and us to the 'big pump rule,'" he said. "He who has the biggest pump, rules."
Sen. Jake Flake (R-Snowflake) had scheduled a hearing Wednesday by the Senate Natural Resources and Rural Affairs Committee about the case but canceled when it appeared a settlement was near.
Flake said he still is prepared to introduce a bill that would prohibit condemnation of land for water rights.
"I simply don't think that big companies should use eminent domain for water," he said.
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