Attorney General Mayes Urges Corporation Commission to Reopen Cactus State Water Rate Case and Provide Relief to Rural Customers

Residents report water bills up 200 to 300 percent, uranium contamination, and low water pressure

PHOENIX — Attorney General Kris Mayes this week sent a letter to the Arizona Corporation Commission asking the Commission to reopen the rate case for Cactus State Utility Operating Company and find ways to lower rates for customers in rural Arizona. The rate increase was approved in November 2025, and since then residents have reported water bills rising by 200 to 300 percent.

In the letter sent on September 22, Attorney General Mayes shared several complaints and pleas for help the Attorney General’s Office has received from Cactus State customers. Many of those customers are retirees, seniors on fixed incomes, and working families already struggling with rising costs for food, health care, and transportation.

"Water is not a luxury good, it is essential to life," said Attorney General Mayes. "I urge the Commission to use whatever authority it has to provide relief to the customers of Cactus State Utilities."

The complaints the Attorney General's Office received include:

• A resident whose base rate for water service rose from $18.88 to $69.68 per month.
• A resident whose monthly bill rose from $38 to $98.
• A 90-year-old woman living alone in a modest home, whose water bill doubled from $200 to $400 per month.
• A resident whose bill increased 251 percent, and who provided documentation that the company did not notify customers of the increase until more than a month after the Commission approved it.

Under A.R.S. § 40-246, when 25 or more customers file a complaint challenging the reasonableness of a rate, the Commission must set a time and place for a hearing. In April 2026, 75 residents of the Tierra Mesa subdivision in Yuma, all Cactus State customers, signed a "Petition for Immediate Regulatory Action" regarding unsafe drinking water and unjust rate increases.

Residents also reported unsafe water and poor water service. Some cited uranium levels above safe regulatory limits. The Arizona Department of Environmental Quality has put temporary and long-term fixes in place, but residents continue to say they struggle to get clean drinking water, and many must haul water home from a kiosk. Some customers report water pressure as low as 12 PSI.

Attorney General Mayes’ letter acknowledged the difficult circumstances of the case. The rate increases followed Cactus State's purchase of many distressed small water systems, and the Commission's decision included steps to reduce rate shock. However, Attorney General Mayes reminded the Commission of its constitutional obligation to set just and reasonable rates that are fair to ratepayers as well as shareholders. The letter cites Arizona Supreme Court precedent holding that the effect of a rate on customers must be as deep a concern to the Commission as its effect on stockholders or bondholders.

The letter was filed in the into the docket by the Office of Commissioner René Lopez today.

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