45-1708. Contracts
A. The director may enter into and carry out contracts with water users for the
delivery of Colorado river water through the facilities of the central Arizona project
and for the sale and delivery of water from other sources included in the central Arizona
project or other water projects, if any, hereafter included in the state water and power
plan. The director shall provide in all contracts executed for the delivery of water from
the central Arizona project that such contracts shall be subordinate to the satisfaction
of all existing contracts between the United States secretary of the interior and users
in Arizona heretofore made pursuant to the Boulder canyon project act. It may be
required as a condition in any contract under which water is provided from the central
Arizona project that the contractor agree to accept main stream water of the Colorado
river in exchange for or in replacement of existing supplies from sources other than the
main stream. Water which has been developed, stored or appropriated shall be sold only
at wholesale rates which will not be unreasonably discriminatory for the same.
B. The authority may enter into and carry out contracts for the sale and
transmission of power from power projects included in the state water and power
plan. Notwithstanding the provisions of title 30, chapter 1, articles 2, 3 and 4, the
power from such power projects included in the state water and power plan shall be sold
at wholesale only to such power purchasers, located within or without the state, in such
manner and upon such terms and conditions, as shall be determined by the authority to be
necessary or advisable to effectuate the purposes of this article, except that power and
energy of the authority from the Hoover power plant modifications project and Hoover
power plant uprating project shall be sold to power purchasers within this state. Any
public utility providing electrical service and any district organized to provide
electrical service may enter into such contracts with the authority for the sale and
transmission of power and energy by which such public utility or district is obligated to
make payments in amounts which shall be sufficient to enable the authority to meet all
its costs allocable thereto, including interest and principal payments, whether at
maturity or upon sinking fund or other mandatory redemption, for its bonds or notes,
reasonable reserves for debt service, operation and maintenance expenses and amounts to
pay for renewals, replacements and improvements and to meet the requirements of any rate
covenant with respect to debt service coverage and any other amounts required for
reserves or other purposes, all as shall be provided in the resolution, trust indenture
or other security instrument of the authority; except that nontax-exempt public utilities
shall be granted an option to purchase the maximum amount of said capacity permitted by
federal regulations governing the issuance of tax-free bonds. Such contracts may contain
such other terms and conditions as the authority and such public utility or district may
determine, including provisions by which the public utility or district is obligated to
pay for power irrespective of whether energy is produced or delivered to it or whether
any project contemplated by any such agreement is completed, operable or operating, and
notwithstanding suspension, interruption, interference, reduction or curtailment of the
output of such project.
C. The surplus revenues derived by the director from the central Arizona project
and any other water project and by the authority from any power project shall be paid
into the state water and power development fund in the amounts and in the manner and at
the times specified in an agreement which shall be entered into by the authority and the
director prior to the issuance of any bonds or notes. For this purpose, surplus revenues
shall mean the revenues of any such project remaining after payment therefrom of
operating and maintenance expenses of such project, debt service with respect to bonds
and notes issued for such project, payments for renewals and replacements of such project
and improvements thereof, any payments required under any license from the United States
department of energy with respect to such project and any other charges or liens with
respect to such project payable out of such revenues, including in each case reserves
therefor, all to the extent required to be paid or provided for under the terms of any
resolution or resolutions or trust indenture or indentures authorizing or securing bonds
or notes issued for such project or any license from the United States department of
energy with respect to such project. Such agreement may also provide for reasonable
limitations on the amounts of the necessary operation and maintenance expense for the
projects included in the state water and power plan, and it may contain such other terms,
conditions and provisions consistent with the provisions of this article as may be
necessary or desirable to effectuate the state water and power plan. It is recognized
that such agreement will provide additional security for the bonds and notes of the
authority and that the same may be pledged by the authority for such purpose.
D. The director or authority may enter into any obligation or contract with the
United States necessary or required in carrying out or accomplishing any of the purposes
or power authorized or permitted by this article and may conform to such requirements,
rules or regulations not otherwise inconsistent with the laws of this state as may be
prescribed by the United States in accordance with the acts of Congress applicable
thereto now in effect or which may hereafter be adopted and the rules and regulations
promulgated thereunder. Contracts or agreements entered into with the United States may
contain such terms, conditions, covenants and restrictions for the security of the United
States or any subsequent holders of bonds issued to evidence such loans, grants or
advances of money. The director or authority may do any and all acts and things
considered necessary or advisable by the United States and the director or authority in
connection with or additionally to secure any such loans, grants or advances of money or
issuance or sale of bonds provided for in the contract or agreement with the United
States.
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