A.R.S. tit. 30 ch. 1 — Arizona Revised Statutes Title 30 Chapter 1 — Arizona Power Authority

30-101. Definitions In this chapter, unless the context otherwise requires: 1. "Authority" means the Arizona power authority. 2. "Commission" means Arizona power authority commission. 3. "Commodity" or "commodities" means electric power or energy. 4. "District" or "power or water agency" means power organizations comprehended in this title or water organizations comprehended in title 45, or both. 5. "Operating units" means districts, state agencies, federal Indian agencies, cities and towns. 6. "Person" means and includes natural persons engaged in the distribution of electric power, mutual and cooperative concerns or organizations by whatever name called, corporations, firms, business trusts and partnerships. 7. "Power" means electric power or electric energy, or both. 8. "Project" or "work" or "works" means each and every facility necessary or convenient for producing, storing, generating, firming or transmitting power, and all rights-of-way, lands or interests in land, the use or occupancy of which are necessary or appropriate in the maintenance and operation of all such facilities. 9. "Qualified distributors" means persons and operating units. 10. "Qualified purchasers" means persons and operating units privileged under this chapter to purchase power developed on the main stream of the Colorado River. 11. "Retail" means sales to others than persons or operating units. 12. "State" means this state. 13. "Transmission lines or systems" means each and every facility necessary or convenient for receiving electric energy from production or transmission systems and transmitting it to wholesale customers. 14. "Wholesale" means sales to qualified distributors of power. 15. "Zone" means an area within a fixed radius or distance from Hoover dam or other point of receipt or production. 30-102. Arizona power authority; powers and jurisdiction A. The Arizona power authority shall perform the duties and exercise the privileges provided by this chapter. B. The authority is a body corporate and politic and shall have an official seal which shall be judicially noticed. The principal office of the authority shall be in Phoenix. The authority may sue and be sued in its official corporate name, make contracts, hold, use, handle, enjoy, lease, sell, pledge or otherwise dispose of any and all real and personal property, and shall have all the rights appertaining or belonging to general bodies corporate except as limited, modified or otherwise provided by this chapter. C. All electric energy or power coming under authority jurisdiction and all property acquired by it shall be public property, and as such shall have the tax exemptions, rights and privileges granted to operating units. D. If the authority ceases to exist, all its assets remaining after its obligations and liabilities have been satisfied or discharged shall be ceded and surrendered to the state. 30-103. Administrative powers of authority; compensation of assistants A. The authority shall determine its organizational structure and methods of procedure in accordance with the provisions of this chapter, and may adopt, amend or rescind the routine and general rules, regulations and forms and prescribe a system of accounts. B. The authority shall provide necessary records, including order, resolution and minute books. It may act, effectuate, manifest and record its actions by motion, resolution, order or other appropriate method. Minute, order and resolution records shall be orderly arranged and conveniently indexed. Records of the authority shall be public and open for inspection during business hours. C. Subject to title 41, chapter 4, article 4, the authority may employ engineering, accounting, skilled and other assistants, define their duties and provide the conditions of employment. All positions shall be filled by persons selected and appointed on a nonpartisan, fitness and qualification basis. D. Assistants, employed under the provisions of this section, shall receive compensation as determined pursuant to section 38-611. 30-104. Cooperation with land department and director of water resources The authority shall cooperate with the state land department and the director of water resources in the duties and functions of the department and the director relating to this chapter. The authority shall also cooperate with the director of water resources in the planning of the hydroelectric power generation aspects of the development and use of the state's water resources. 30-105. Arizona power authority commission; membership; terms of office A. The purposes of the authority shall be effectuated by and through the Arizona power authority commission and other necessary personnel. The powers and authority vested in the commission shall be exercised by a majority of the members then in office. B. The commission consists of five electors appointed by the governor pursuant to section 38-211. The members shall be electors qualified by administrative and business experience. A member shall not hold any other salaried public office or be associated with any public service corporation engaged in generating, distributing or selling power to the public generally in this state for profit. Title 38, chapter 3, article 8 applies to all members of the commission. C. The term of office of each member is six years. The terms of two members expire on the third Monday in January of each odd-numbered year, except that on the third Monday in January of each sixth year the term of one member expires. The governor may remove members of the commission for cause. 30-106. Organization of commission; compensation; oath A. The commission shall select a chairman and a vice-chairman from among its membership who shall each hold office for terms of two years, to begin and end on the first Monday in January. B. Members of the commission shall receive compensation as determined pursuant to section 38-611 for time actually spent in the service of the authority, but the total compensation shall not exceed three thousand dollars per annum, exclusive of allowable expenses. C. Members of the commission in order to qualify for office shall take and subscribe to an official oath to perform the duties of their office. The oath shall thereupon be filed with the secretary of state. All official oaths required by this chapter shall be in the form prescribed by law for official oaths of state officers. 30-107. Meetings of commission; executive session A. All meetings of the commission are public. All members of the commission shall attend all meetings of the commission unless excused from attendance for a justifiable excuse, but three members constitute a quorum for the transaction of business. B. The commission shall keep minutes of the commission's meetings and executive sessions in accordance with section 38-431.01 or 38-431.03, as appropriate. C. This section does not prevent the commission from holding an executive session in accordance with section 38-431.03. 30-108. Powers and duties of commission; annual report A. The members of the commission shall devote to their duties as members such time and attention as is necessary to effectuate the purposes of this chapter and to carry out their duties and exercise their powers. The commission shall designate a person or persons who shall execute all documents and instruments on behalf of the authority. B. The commission shall acquire suitable offices, furnishings and articles of equipment and necessary supplies. C. Subject to title 41, chapter 4, article 4, the commission may employ a person in the capacity of director, manager or chief engineer. The chief engineer shall be a duly licensed engineer, but need not be a resident or licensed in this state. The person shall be actively engaged in the practice of the person's profession and trained and experienced in the performance of the person's duties. The person shall not hold any other public office or have any interest in a business that may be adversely affected by the operation of the authority in the exercise of the authority's powers and discharge of the authority's duties. D. The commission shall make and submit to the governor, the president of the senate, the speaker of the house of representatives, the chairman of the senate natural resources, energy and water committee and the chairman of the house of representatives energy, environment and natural resources committee, or their successor committees, on or before January 1 each year a report containing a full and complete account of the commission's transactions and proceedings for the preceding fiscal year, together with other facts, suggestions and recommendations deemed of public value. 30-109. Powers and duties formerly held by Colorado River commission The authority shall have the following powers and duties formerly vested in and imposed upon the Colorado River commission: 1. Gathering of data regarding projects for the development and use in the state of power from the waters of the Colorado River. 2. Discovery of potential users of power and encouragement of feasible enterprises looking to the utilization of Colorado River power. 3. Any other rights, powers and duties of the Colorado River commission pertaining to the development and sale of power, including the application pending before the federal power commission for a permit to construct Bridge Canyon dam. 30-110. Appealable agency actions; office of administrative hearings; exception; definition A. Notwithstanding section 41-1092.01, subsection F, the office of administrative hearings shall conduct all administrative hearings related to appealable agency actions as defined in section 41-1092 that relate to the proceedings, orders or actions of the authority. B. This section does not apply to appeals arising from the post-2017 Hoover power allocation process. C. For the purposes of this section, "post-2017 Hoover power" means the capacity and firm energy allocated to entities in sections 2(a), 2(b), 2(c) and 2(d) of the Hoover power allocation act of 2011 (P.L. 112-72; 125 Stat. 777; 43 United States Code section 619a), for delivery commencing October 1, 2017, to be further allocated by the authority to entities in this state. 30-121. Acquisition and encouragement of development of electric power A. The authority shall bargain for, take and receive, in its own name on behalf of this state, electric power developed from the waters of the main stream of the Colorado River by the state or the United States or any agencies thereof which by provisions of state or United States law, agreement or regulation may be made available, allotted or allocated to this state in its sovereign capacity. B. The authority shall encourage activities deemed by it to be feasible for the production or storage of electric power or energy from solar energy, nuclear energy or geothermal energy, and may bargain for, take and receive such energy or the electrical power generated therefrom in its own name on behalf of this state. C. For the purpose of making such power available to marketing areas of this state, the authority may acquire or construct and operate electric transmission systems, standby or auxiliary plants and facilities and generate, store, produce, sell at wholesale, transmit and deliver such electric power to qualified purchasers, and if conducive to efficiency and convenience, may enter into agreements for interconnection or pooling with projects, plants, systems or facilities of other distributors of electric power. The authority shall not by definitive contract or agreement obligate or bind itself to take or purchase power from any source until it has previously or simultaneously procured purchasers therefor. D. All rights of persons and operating units under contracts existing on March 27, 1944, or any renewals thereof or supplements thereto, with the United States or any agency thereof, to power generated, or that may be developed or generated, at Parker dam or at any other point below Hoover Dam on the main stream of the Colorado River are preserved, and such rights shall not be impaired or modified by any provisions or powers granted by this chapter. E. In addition to the power provided for under subsections A, B, C and D of this section, the authority may purchase, transmit or deliver for this state, or any person or operating unit, power generated or produced from projects or works owned or operated by the United States or any agency thereof, or any state, person or operating unit, and for the purpose of delivering such power to available marketing areas the authority shall have the powers provided for by subsections A, B, C and D of this section. A person or operating unit in this state shall not become a purchaser of electrical power under this subsection unless a power purchase certificate is obtained as provided in article 3 of this chapter. 30-122. Cooperation with public agencies; limitations upon powers of authority A. The authority, in the acquisition, construction or operation of electrical transmission systems and other related facilities, shall as far as the best interests of the state permit and as far as consistent with the purposes and policies of this chapter, cooperate with established and existing organizations and with the department of interior of the United States or any other federal agency or department for use, interconnection or utilization of any suitable transmission lines or other facilities for distribution and operating purposes. The authority shall when practical bargain and negotiate with the United States and its departments or agencies for the inauguration, construction or operation of new projects or enlargement of works or facilities, and shall provide for repayment of such work or project costs accruing to the federal agency or department concerned by the application of revenue produced from the operation of the works or projects. B. Operating units or persons engaged in distribution of electric power may construct, conduct, operate, handle, acquire and dispose of projects, works, systems or facilities not belonging to or under the jurisdiction of the authority, and may also bargain and contract directly with the United States or any department thereof for electric power from the main stream of the Colorado River not under jurisdiction of the authority after first obtaining a power purchase certificate as provided by article 3 of this chapter. C. The authority shall not create any mortgage lien upon its operating property or facilities, or impose any debt, or suffer or create any financial obligation whatever upon the state or any of its subdivisions. D. This chapter shall not be construed to modify, alter or change the provisions of chapter 1 of title 45 or the functions, powers and duties of any agency or officer pertaining thereto. Nothing in this chapter shall be construed to authorize or empower the authority to engage in the retail distribution of electric energy, but the authority may sell and deliver electric energy to consumers located adjacent to its transmission lines who may be without other means of adequate electric supply. 30-123. Development programs for utilization of power; use of state property; right of eminent domain A. The authority shall formulate plans and development programs for the practical, equable and economical utilization of electric power placed under its supervision and control. The authority, subject to the provisions of this chapter, shall proceed to accomplish progressively and place the plans and programs in operation and effect. For such purpose the authority may exercise all or any of the powers and privileges granted by this chapter, singly or conjointly, severally independent or jointly with the United States or any department thereof, or with any person or operating unit, and may make application for, obtain, hold and use permits and licenses from the United States or any of its agencies for power sites, rights-of-way, rights and uses and other privileges. For such purpose the authority may make application, appropriations and filings under and in accordance with this chapter and title 45, chapter 1 for power in the same manner as any other qualified person or operating unit, but without payment of fees or charges for filing any maps, plans or other data in connection therewith. B. The authority may use real property owned by this state, not dedicated to public use, that may be necessary as sites for any project, or facility or rights-of-way of the authority. When any lands or rights-of-way of this state dedicated to public use are necessary for the construction, operation or maintenance of the projects or transmission systems, such lands or rights-of-way may be used therefor but in accordance with the terms and conditions of an agreement to be first entered into between the authority and the political subdivision or agency having jurisdiction over or control and management of the land or rights-of-way. C. The authority may acquire by lease, purchase or any other means, real property owned by the state or federal government and may dispose of such property by sale, lease or other means to persons engaged in projects deemed by the authority to be feasible for the production or storage of electric power or energy from solar, nuclear or geothermal energy, including projects for research and development in such fields. D. The authority may exercise the privilege and right of eminent domain and may condemn private property for public use in the same manner and to the same extent as persons or operating units. Any property condemned, taken or appropriated under the provisions of this chapter is declared to be taken, condemned or appropriated for a public use. E. A project, transmission system, work or facility shall not be constructed or otherwise acquired, unless and until after due consideration and investigation, it is determined by the authority to be feasible and economically sound, and that the project or facility will be self-financing and will be liquidated within a reasonable period of useful life as determined by the authority and until definite contracts or agreements are executed as provided by section 30-121. 30-123.01. Construction, operation and maintenance of dams; generation of electrical energy; construction of storage and diversion facilities; limitations The authority shall take such steps as may be necessary, convenient or advisable to construct, operate and maintain at the Bridge Canyon dam site or other sites, dams for the generation of electrical energy and in connection therewith the facilities in or at the site of said dams for the storage and diversion of water. Such dams shall be deemed to be a project within the meaning of the definition of such term contained in paragraph 8 of section 30-101. 30-124. Disposition of electric power; limitations; establishment of power rates A. The authority shall take such steps as may be necessary, convenient or advisable to dispose of electric power within its jurisdiction. B. The authority shall not operate primarily as a source of public revenue. Electric power, as nearly as practical, shall be disposed of in an equable manner so as to render the greatest public service and at levels calculated to encourage the widest practical use of electrical energy. C. Subject to the provisions of this chapter, electric rates of the authority shall be established and include such price components as are necessary to establish and maintain the authority, together with any works constructed or acquired by it, as a self-financing and liquidating project and to provide and maintain reasonable working capital and depreciation and other necessary and proper reserves. The rates for electrical energy generated from the bridge canyon project or other hydroelectric power facilities constructed after the effective date of this act may include such additional price components as the authority shall deem necessary to defray or contribute to the cost of storing, diverting or delivering waters of the main stream of the Colorado River with respect to facilities hereafter constructed and for the cost of construction of facilities for such purposes. Nothing herein contained shall be deemed to authorize the construction of aqueducts, canals or laterals, nor shall the authority have any jurisdiction or control whatsoever over diversions of water or rights to divert water from the main stream of the Colorado River. The rates shall include proportionate general price components, costs of purchases or production, transmission, depreciation, maintenance, amortization and such other appropriate price factors as the authority deems necessary or advisable, but no rates established by the authority shall increase rates to purchasers fixed in existing power contracts with the purchasers during the term of their respective contracts. D. The authority may fix and prescribe the terms and conditions of its electric sales contracts and services and adopt such rules and regulations it finds necessary or convenient respecting electric services and disposition of electric power. The authority may provide that the purchaser will pass along to its customers the reduction in its cost of service to its customers which results from its purchase of electrical energy covered by its contract with the authority, but nothing contained in this section shall give the authority power to fix, prescribe or control the rates to be charged by any public service corporation. E. The authority may establish appropriate rate schedules for its different classes of service or for its different zones of service. Rates shall not be discriminatory as between purchasers or classes of purchasers and rates may be uniform within zones or throughout the state. F. Contract schedules may be modified by the authority when such action is necessary to achieve the purposes and policies of this chapter, but shall not operate to change the provisions of existing power contracts during the term thereof unless the contract so provides or unless with the consent of the holder of the contract. 30-125. Preferences when power supplies insufficient A. When available power supplies are insufficient to meet pending power applications, preferences shall be given to: 1. Districts. 2. Any incorporated city or town, or any cooperative serving its own members only, to the extent of the difference between its existing contracts for purchase of power generated by the waters of the main stream of the Colorado River from whomever purchased and seventeen million five hundred thousand kilowatt hours per annum. 3. Applicants other than districts for power supplies to be used primarily for irrigation or drainage purposes or both. 4. Any qualified applicants including any named in this subsection. B. No reduction in power supplies under power contracts existing on March 31, 1947 shall be made except with the consent of the purchaser because of any power scarcity arising after execution of the contracts, and such contracts shall remain in force and effect during the term thereof. 30-126. Designation of transmission lines upon which uniform transmission voltage rate applicable The authority shall designate certain sections of main transmission lines and facilities in the state for delivery of Colorado River power, including lines to be constructed or acquired by the authority and any transmission lines and facilities which may become available through the United States or an agency thereof, or other public or private sources, to the extent that the authority may be able to arrange for the use of the lines and facilities, as to which sections a uniform rate for power at transmission voltage shall also be made applicable. The sections shall initially include all portions of the lines between the points of generation on the Colorado River and distribution centers where substantial power loads exist as established by the authority. 30-127. Uniform transmission voltage rate; wholesale power rates; limitations A. The uniform transmission voltage rate shall include proper components of cost for power delivered over the sections of line designated under the provisions of section 30-126 at high voltage transmission levels, and power shall be sold at the uniform transmission voltage rate for transmission voltage delivery at any point on such sections of line. Power may be sold at the low voltage side of substations located on such sections of line at rates covering the uniform transmission voltage rate plus proper added cost components for low voltage delivery, and at locations served by extensions from such sections of line at rates covering the uniform transmission voltage rate plus proper added cost components for delivery over the extensions and related facilities. The authority shall be under no obligation to construct or furnish any substations or other facilities for delivery on the low voltage side or any extensions from the main transmission lines. B. The application of the uniform transmission voltage rate may from time to time be extended to other sections of the main transmission lines and to sections of high voltage transmission lines subsequently constructed when the application of the rate to the other sections of line and subsequently constructed lines will not result in a material increase in the rate, but no increase from this cause shall apply to or affect the rates in existing contracts. C. If electric power is purchased by the authority directly from facilities owned and operated by the United States, an agency thereof, or other public or private sources, at a cost to the authority not consistent with the uniform transmission voltage rate, the rates for the power to purchasers from the authority shall be based upon the cost of power to the authority together with all additional cost components pertinent thereto. D. Wholesale power rates set forth in any power contract for sale of power by the authority shall be limited as to modifications upward to the extent of variations in the cost of power to the authority in its power purchase contracts, or variations in the actual costs, including operating costs, to the authority of the facilities which shall be specified in the power contract to be taken into account in determining costs. E. Contracts or agreements for sale by the authority of electric power and energy at wholesale shall recognize all applicable provisions of this chapter and may be executed for such period as the authority deems necessary, but if such contracts or agreements are made for a period exceeding twenty years they shall be made subject to termination upon reasonable notice by the authority at any time after the initial twenty year period. F. No revenue bond issued by the authority, or agreement of the authority with respect thereto, shall in any respect impair, modify or change the provisions of any contract of the authority for the sale of electrical energy entered into pursuant to the provisions of this chapter. G. If secondary, dump, off-peak, or emergency energy becomes available to the authority from Colorado River developments, or other public or private sources, it may be purchased and resold by the authority to the extent of transmission facilities available, at rates which will be adequate to cover the costs of delivering such energy, and under terms and conditions suited to the uses which may be made of the energy. 30-127.01. Water rights Nothing in sections 30-123, 30-123.01, 30-124, 30-127 and 30-127.01 shall be construed as affecting or intended to affect or to in any way interfere with the laws of the state relating to the control, appropriation, use, or distribution of water used in irrigation or any vested right acquired therefor, and the authority, in carrying out the provisions of sections 30-123, 30-123.01, 30-124, 30-127 and 30-127.01, shall proceed in conformity with such laws, and nothing herein shall affect any right of the state or of any landowner, appropriator, or user of water in, to, or from any interstate or intrastate stream or the waters thereof. 30-128. Construction work and purchases by bid only; exceptions; award of contract; bond A. The construction of projects or facilities undertaken by the authority shall be by contract and not by force account. No contract for construction work exceeding five thousand dollars, except in cases of emergency to prevent imminent loss or danger, shall be entered into by the authority except after notice published for not less than ten days. All such contracts shall be let by public bid to the lowest responsible bidder, and the authority shall be authorized to call for sealed bids and to accept or reject any or all bids. Bids shall be accompanied by a reasonable bid bond in an amount the authority demands. The provisions of this subsection shall not apply to any contracts entered into with a federal agency. B. All purchases and contracts made by the authority for material or services other than personal services shall be made after advertising in such manner and at such times sufficiently in advance of opening bids as the authority deems adequate to insure appropriate notices and opportunity for competition. Advertisement shall not be required when: 1. An emergency requires immediate delivery of the supplies or performance of the services. 2. Repair parts, accessories or supplemental equipment or services are required for supplies or services previously furnished or contracted for. 3. The aggregate amount involved in the purchase of supplies or procurement of services does not exceed two thousand five hundred dollars. C. In the instances provided for by paragraphs 1, 2 and 3 of subsection B the purchase of supplies or procurement of services may be made in the open market in the manner common among businessmen. D. In comparing bids and in making awards the authority shall give due consideration to such factors as: 1. The relative quality and adaptability of supplies or services. 2. The bidder's financial responsibility, skill, experience, record of integrity in dealing and ability to furnish repair and maintenance services. 3. The time of delivery or performance offered. 4. Whether the bidder has complied with the specifications. E. The provisions of subsection D shall not apply to any contracts entered into with any federal agency. F. The authority shall protect its interests by providing for and securing such bond or bonds as are required under the provisions of title 34, chapter 2, article 2. 30-129. Cooperation with operating units A. Any person or operating unit, or combination thereof, may petition the authority for the exercise of its powers and privileges in making any project or proposed project survey or investigation, or for authorized assistance in the inauguration or completion of any works or projects authorized by this chapter. B. Upon filing the petition, the authority may conduct hearings and conduct investigations deemed necessary and advisable, and thereafter take action as it deems appropriate in the premises and within its sphere of cooperative action. The authority may: 1. Act as a bargaining and negotiating agency in transactions and dealings between the various departments of the federal government and any petitioning persons or operating units. 2. Serve as a connecting, intermediate or contracting medium for the petitioners when for united or joint participation such a medium is convenient or essential to the receipt, acceptance or enjoyment by the petitioners of any financial proposals, grants or other benefits made available by any federal statute or federal department. 3. Act as a coordinating, clearing, administering, supervising or activating instrumentality by and through which petitioners may cooperate or unite through or by contracts or agreements in the application or pooling of their resources, functional rights or privileges for common purposes cognizable by this chapter. C. Notwithstanding the provisions of any general, special or local law or statutory regulation, operating units may enter into contracts, agreements and arrangements which may be found necessary for effectuating the intent and securing the benefits of paragraphs 1, 2 and 3 of subsection B. If found convenient and essential to the accomplishment of such purposes, the cooperators may associate themselves in a cooperative corporation under the incorporation laws of the state, and it shall be their respective duties to do and perform all things on their respective parts undertaken by them to be done or performed thereby or thereunder. D. Nothing contained in this section shall be construed to alter or change any debt limitation of the operating units. 30-151. Certificate prerequisite to purchase of power No person or operating unit in the state other than the retail purchasers from the authority permitted by section 30-122, shall become a purchaser of electrical energy generated by the waters of the main stream of the Colorado River, unless it first obtains a power purchase certificate issued by the authority as provided by this chapter. 30-152. Application for certificate; hearing; multiple applications A. Any person or operating unit desiring to become a purchaser of electrical energy described in section 30-151 shall file with the authority an application verified under oath, stating: 1. Its principal place of business. 2. A reasonably accurate description of the territory in which the energy will be sold or used. 3. The purposes for which the energy will be used. 4. The names and addresses of all persons and operating units engaged in distribution of electrical energy, and all districts not engaged in such distribution, in the territory described in the application and in territory contiguous thereto. 5. Other relevant information the authority by regulation requires. B. The application shall be accompanied by copies thereof at least equal in number to the persons and operating units required to be named therein. C. Upon filing the application the authority shall immediately fix a time and place where a hearing will be held thereon. The date of hearing shall be not less than ten nor more than thirty days after the date of the filing, exclusive of the date of filing. Written notice of the time and place fixed for the hearing shall be given forthwith by the authority by mail to the persons and operating units named in the application. The notice shall be accompanied by a copy of the application. D. If more than one application is filed for the same territory, or part of the same territory, the authority may consolidate all the applications for hearing at the same time and place and shall give notice accordingly. 30-153. Issuance of certificate; conflicting applications A. If an application is granted in whole or in part, a power purchase certificate shall be issued by the authority in accordance with its order. Power purchase certificates shall be numbered consecutively according to date of issuance, shall set forth the name of the applicant to which issued and the territory for which issued. The certificate so issued may be assigned by the holder after first securing the approval of the authority, but a transfer by operation of law or by virtue of any judicial, trustee's or other involuntary sale shall not require the authority's approval. B. The application of any applicant shall be granted for so much of the territory included in its application as is then being served with electrical energy by it. No power purchase certificate shall be issued to an applicant for territory which is then being served with electrical energy by a person or operating unit, subject to the applicable provisions set forth in section 30-154 respecting districts and incorporated cities and towns. If applications for power purchase certificates are filed by two or more applicants covering wholly or in part the same geographical area, and no electrical service is then being rendered in the area by any person or operating unit, the authority shall award a certificate to the applicant or applicants which, in the judgment of the authority will best serve the area after giving due consideration to the preparedness of competing applicants to serve the territory in question, the investments involved, the adequacy of the service proposed to be rendered to consumers therein, and the time required to furnish the service and any other relevant and pertinent matters bearing upon the controversy. C. No applicant for the whole or any part of an area in which no electrical service is then being rendered shall, after the filing of the first application for the unserved territory, begin service therein pending final decision by the authority on all conflicting applications covering the territory. D. No applicant for a power purchase certificate shall be granted a certificate until it first enters into a contract with the authority for the payment to the authority, in the manner and at the time required by the authority, of the current administration charge, if any, applicable to the power to be purchased under contracts with the authority. 30-154. Certificates granted as matter of right A. Notwithstanding anything in this chapter to the contrary, the authority shall grant as a matter of right: 1. The application of any district for a power purchase certificate for electrical energy solely for use for irrigation or drainage purposes, or both, within the boundaries of the district, or where all lands included within a district are not contiguous, on intervening lands substantially enclosed by lands included within the district, if so requested of the authority by duly executed petition of the owners or legally authorized custodians or administrators of such lands. 2. The application of any district for a power purchase certificate for electrical energy to be distributed to inhabitants of the district where the district has acquired or consummated all steps necessary to acquire the electric facilities of the distributor or distributors then serving the inhabitants of the district. 3. The application of any incorporated city or town for a power purchase certificate covering territory within its corporate boundaries not otherwise served with electrical energy. 4. The application of any incorporated city or town for a power purchase certificate for electrical energy to be distributed generally within its corporate boundaries where the city or town has acquired or has consummated all steps necessary to acquire the electric facilities of the distributor or distributors then serving the inhabitants of the city or town. B. If the authority fails to make any order on any application of a district or incorporated city or town for sixty days after the date fixed for hearing on the application, a power purchase certificate shall be deemed to have been issued to the applicant by the authority, and the applicant may thereafter proceed to exercise its rights thereunder to the extent and for the purposes permitted by this chapter and as set forth in its application. 30-155. Rights of certificate holders; cancellation or amendment of certificate A. The holder of a certificate may enter into a contract or contracts for the purchase of electrical energy generated by the waters of the main stream of the Colorado River, and the rights of the holder of a certificate may not be abrogated, modified or amended without consent of the holder, except as provided in this section. B. The authority may cancel a certificate if the holder does not, within six months from the date when electrical energy is first available to the holder, actually and in good faith begin rendering the service or using the electrical energy for the purpose for which the certificate was issued, unless the authority, upon written application, has for good cause shown, prior to the expiration of such period, extended the time for beginning the service or use. C. The holder of a power purchase certificate may apply to the authority for amendment of its certificate to include additional territory. All provisions of this article relating to original applications for power purchase certificates shall apply to any application for amendment. D. Any person or operating unit holding a power purchase certificate and otherwise qualified under the provisions of this chapter to purchase electrical energy may sell the energy at wholesale to any other person or operating unit holding a power purchase certificate, but the use of the electrical energy by the purchaser shall be confined to the uses and the territory for which the purchaser holds a certificate. 30-191. Indemnity or performance bonds as security; collateral security in lieu of bond A. Operating units may execute and deliver indemnity or performance bonds as required by the United States or the state as security or assurance for performance of or indemnity for liability under any contract made with them or either of them. B. The operating units may at their election establish, tender and deliver collateral security in lieu of the indemnity or performance bond required. The amount or penalty of any indemnity or performance bond or pledge shall be the amount determined by the pledgee as sufficient for and proportionate to any contract undertaking involved. C. The bond or pledge shall be in appropriate and effective form as the circumstances require. The pledge may consist of: 1. An uncommitted or unencumbered fund on hand or to be received or to be thereafter created. 2. Proceeds of any uncommitted or unencumbered district assessment. 3. Income or proceeds from any district, state agency or municipal operation not otherwise committed or encumbered. 4. Revenue bonds. 5. Real or personal property. 6. Any other valuable right or thing satisfactory to the pledgees or either of them. 30-192. Authorization for bond or collateral security The governing or administrative body of an operating unit, if it finds the giving of the bond or pledge, or both, necessary or advisable and for the best public interest, may by two-thirds vote of its members at any regular or special meeting, pass and adopt a resolution or take other appropriate action authorizing the making and delivery of the bond or pledge, or both, as circumstances indicate. The findings of the body and its determination respecting the bond or pledge shall be final and conclusive. The authorized officers of the district, state agency or municipality may execute and deliver the bond or pledge on its behalf. 30-193. Provisions of bonds; powers of operating unit Indemnity or performance bonds or pledges may be in the form and contain terms, conditions and agreements as required by the pledgees to fulfill the purposes thereof within the broadest scope of this chapter. The governing body of the operating unit may enact, pass and adopt necessary bylaws, ordinances, resolutions, rules and regulations not in conflict with this chapter for effectuating and carrying out the provisions and purposes of this article. 30-201. Administrative and operation budgets A. The authority shall on or before September 30 each year adopt an administrative budget for the next succeeding fiscal year. The budget shall consist of an estimate of the expenditures that may be necessary to meet administrative requirements of the authority for the ensuing fiscal year. Economies resulting in remaining balances for any fiscal year shall be available for subsequent administration or operating purposes. B. The authority shall also for each fiscal year prepare an operation budget covering operations and capital items. C. The original budgets shall be filed with the department of administration and copies of the budgets with the governor and state treasurer. D. The authority's budget and audit fiscal years shall be based on the federal fiscal year of October 1 through September 30. 30-202. Appropriated and operation funds defined; debt reserve fund; application of general fiscal laws A. Any funds made available to the authority by legislative appropriation shall be classified "appropriated funds." All other funds derived from operations or otherwise acquired or accruing to the authority shall be classified "operation funds." Appropriate classifications and designations shall be set up in the authority accounting records as set forth by section 30-103 to provide for accurate and systematic control and allotment of all monies received, including a debt reserve fund embracing all monies required for the payment of principal and interest on revenue bonds, and any and all other obligations for which a reserve is required. No withdrawals from the debt reserve fund shall be made except for the express purposes for which the monies have been deposited therein. B. The provisions of chapter 1, title 35 not in conflict with this article shall, as far as applicable, apply to the handling and disbursement of appropriated funds of the authority. The fiscal year of the authority shall not be divided into fiscal quarters, and appropriated monies shall be placed in separate funds as budgeted and not in the general fund. Warrant limitations, lapsing of appropriations, quarterly allotments and continuing or recurring appropriation provisions shall also be inapplicable. C. Nothing in chapter 1, title 35 shall be construed to require the reversion to the general fund or otherwise of any monies, balances or biennium appropriations made for the authority. 30-203. Receipt of monies; disbursements; operation of accounting system; annual audit A. Monies due the authority under agreements for the sale of electric power or other service, proceeds of revenue bond issues or any other obligations may be made payable at the office of the authority. All monies derived from operations of the authority of any nature and received by any officer, agent or employee of the authority shall be deposited, pursuant to sections 35-146 and 35-147, in the appropriate Arizona power authority fund. All operation monies of the authority received shall be accounted for and kept separate from any monies made available to the authority by any legislative appropriation and shall be paid out only in accordance with the regularly adopted authority operation budget on warrants in discharge of claims and obligations approved by the authority commission, signed by the authority chairman and countersigned by the authority director or other duly authorized authority officer. B. The appropriate claim vouchers shall be regularly entered in the operations accounting system of the authority and preserved and exhibited for auditing purposes. The operations accounting system set up by the authority shall conform as nearly as practicable to the uniform accounting system prescribed for public service corporations. C. The department of administration may at any time examine the books, accounts and vouchers of the authority. On notice from the authority, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. 30-204. Audit of operation funds and collateral deposits A. At the authority's request, a district and state agencies authorized to issue revenue bonds subject to approval of the state certification board shall cause an audit to be made of their respective operation funds. Districts, state agencies and municipalities pledging any assessments, funds or property presently owned or to be provided, accumulated or acquired shall similarly cause an audit to be made of their respective collateral deposits. The audits shall be made by a certified public accountant within sixty days after the close of the respective fiscal years of the districts, state agencies and municipalities, and each shall file a certified copy of the audits with the auditor general. B. The auditor general, at the expense of the district, state agency or municipality concerned, may make further audits and examinations as the auditor general deems necessary and take appropriate action in relation to the audits as provided by title 41, chapter 7, article 10.1. Unless the auditor general takes official action within thirty days after filing the audit, the audit shall be deemed sufficient. C. The audits shall be in lieu of all other official audits of all operation funds or collateral deposits of the districts, state agencies and municipalities, except as ordered by a court of competent jurisdiction. 30-221. Authority to issue revenue bonds A. When the authority finds other financing methods or procedure inadvisable, inadequate or insufficient to acquire or construct transmission lines, projects, works or facilities, it may independently or in conjunction with any other optional or alternative plans provided in this chapter issue bonds as provided by this article. 30-222. Prerequisites to issuance No revenue bonds shall be issued until provision is made by power or transmission purchase contracts in accordance with the provisions of this chapter adequate in the judgment of the authority to insure all necessary fiscal reserves, operation costs, maintenance and depreciation charges and payment of principal and interest of any bonds relating to any proposed project or facility involved and within the time fixed. 30-226. Issuance of bonds; provisions of bonds A. Bonds issued under this article shall be authorized by resolution of the authority and may be issued in one or more series, shall bear such date or dates, mature at such time or times, bear interest at such rate or rates, not exceeding nine per cent per annum, be in such denomination or denominations and in such form, either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner, payable in such medium of payment, at such place or places, and subject to such terms of redemption, with or without premium, as such resolution, any trust indenture, or the bonds so issued may provide. Bonds may be sold at public or private sale at premium, discount or par with accrued interest. Notwithstanding any provision of law to the contrary, bonds issued pursuant to this article shall be negotiable. The proceeds of the bond issue shall be controlled and administered solely by the authority as provided in this chapter. B. The bonds shall provide that: 1. The bond is purchased and taken after a complete disclosure of and with a full knowledge of all the surrounding relevant facts and circumstances and not upon the representation, faith or credit of the state of Arizona or any of its subdivisions. 2. The holder in order to obtain payment may not compel the state or any subdivision thereof to exercise its appropriation or taxing power. 3. The bond does not constitute a debt of the state and is payable only from revenues of the authority. C. The gross or net revenue of any project or any part thereof may be pledged to secure payment of any series of bonds. 30-227. Additional provisions of bonds; certification by attorney general; sale A. The authority may provide for reimbursement to the holder of all expenses of litigation and attorney fees incurred in collection of the bonds in the event of default, and may provide for and fix the powers and duties of a trustee if necessary to enforce collection. Bond resolutions, agreements and bonds may be in such form and contain such other conditions and terms as the authority deems appropriate or necessary to make the bonds fully salable and marketable. B. The authority may provide that any holder of bonds, or a trustee designated by the authority at the time of issuing the bonds, may upon proper showing secure by mandamus, or other proper proceedings, an order of court requiring the authority, subject to the provisions of contracts with purchasers of electrical energy or transmission service from the authority then in effect, to fix and collect rates and charges which will produce revenues and income permitting the setting up of adequate yearly reserves with which to meet future payments in accordance with the terms of the bond. C. All bonds issued by the authority and agreements of the authority with respect thereto shall be subject to the provisions of this chapter, and no bond or agreement shall contain any provisions in conflict with this chapter. No amendment of this chapter shall ever diminish or impair the remedy and rights of the bondholder. D. The bonds shall be signed by the chairman or vice-chairman and the secretary of authority in office at the date of signing, and shall be valid obligations of the authority although before delivery or sale the persons whose signatures appear on the bonds have ceased to be members of the authority. E. The validity of the bonds shall not be dependent on or affected by the legality of any proceeding relating to the acquisition, construction, improvement or extension of a project for which the bonds are issued. The bonds shall recite that they are regularly issued pursuant to this chapter and such recital shall be prima facie evidence of their legality and validity. F. Before delivery or sale the authority may submit the bonds to the attorney general of the state, and he shall examine them and inquire into the legality of all proceedings bearing upon the validity of the bonds. If satisfied that they are legally issued, he shall certify in substance on the back of each bond that it is issued in accordance with the constitution and laws of this state. G. Bonds so issued may be sold if and when the money is needed for the purposes for which they were issued. Pending the preparation or execution of definite bonds, interim receipts or certificates or temporary bonds may be delivered to the purchaser or purchasers of bonds. 30-228. Validity of bonds This chapter without reference to other laws of the state shall constitute full authority for the authorization and issuance of bonds hereunder. No other law with regard to the authorization or issuance of obligations or which in any way impedes or restricts the carrying out of the acts authorized by this article shall be construed as applying to any proceedings taken or acts done pursuant to this article.