Court Opinion

ID: 867490
Source: CourtListenerOpinion
Date Created: 2013-05-11 22:48:44.179453+00
Date Added: 2024-06-11T15:26:02.953580
License: Public Domain

SUPREME COURT OF ARIZONA
                            En Banc

ARIZONA WATER COMPANY, an         )   Arizona Supreme Court
Arizona corporation,              )   No. CV-03-0321-PR
                                  )
              Plaintiff-Appellee )    Court of Appeals
                 Cross-Appellant, )   Division One
                                  )   No. 1 CA-CV 02-0276
                 v.               )
                                  )
ARIZONA DEPARTMENT OF WATER       )   Maricopa County
RESOURCES, H.R. GUENTHER, in his )    Superior Court
capacity as Director of the       )   Nos. CV 90-001840
Arizona Department of Water       )        CV 99-008015
Resources,                        )
                                  )
           Defendants-Appellants )
                 Cross-Appellees, )    O P I N I O N
                                  )
ARIZONA CORPORATION COMMISSION,   )
                                  )
             Intervenor-Appellee. )
                                  )
__________________________________)

        Appeal from the Superior Court in Maricopa County
              The Honorable Roger W. Kaufman, Judge

                      VACATED AND REMANDED

          Opinion of the Court of Appeals, Division One
                   205 Ariz. 532, 73 P.3d 1267

                AFFIRMED IN PART, VACATED IN PART

ARIZONA DEPARTMENT OF WATER RESOURCES                         Phoenix
     By: W. Patrick Schiffer
          Kenneth C. Slowinski
          Nicole D. Swindle
Attorneys for Defendants-Appellants/Cross-Appellees
Arizona Department of Water Resources
FENNEMORE CRAIG                                                               Phoenix
     By: Timothy Berg
          Norman D. James
          Thomas R. Wilmoth
Attorneys for Plaintiff-Appellee/Cross-Appellant
Arizona Water Company

SALMON LEWIS & WELDON PLC                                 Phoenix
     By: M. Byron Lewis
          Lisa M. McKnight
Attorneys for Amici Curiae
Salt River Valley Water Users’ Association and
Salt River Project Agricultural Improvement and Power District

H U R W I T Z, Justice

¶1           The   issue   in      this    case   is    whether    the    1990-2000

management    plan   adopted       by     the   Arizona    Department     of    Water

Resources (“ADWR” or the “Department”) for the Phoenix active

management    area   violated        the    Arizona     Groundwater      Code    (the

“Code”).     We conclude that ADWR was statutorily authorized to

promulgate those portions of the management plan in which per

capita conservation requirements were directly imposed on water

providers,     but   was     not     mandated      by     the   Code     to     impose

conservation requirements directly on all “end users.”                        We also

conclude ADWR may consider a provider’s use of Central Arizona

Project    (“CAP”)   water      in      calculating     that    provider’s      total

annual per capita water use.

                                           2
                                         I.

                                         A.

¶2            The Groundwater Code, Ariz. Rev. Stat. (“A.R.S.”) §§

45-401 to -704 (2003 & Supp. 2003), was originally enacted as

part of the Groundwater Management Act of 1980, 1980 Ariz. Sess.

Laws,   4th    Spec.    Sess.,    ch.    1.     In    adopting     the    Code,   the

legislature found “that the people of Arizona are dependent in

whole or in part upon groundwater basins for their water supply

and that in many basins and sub-basins withdrawal of groundwater

is greatly in excess of the safe annual yield.”                      A.R.S. § 45-

401(A).       The legislature further found that these withdrawals

were “threatening to destroy the economy of certain areas of

this state and [were] threatening to do substantial injury to

the general economy and welfare of this state and its citizens.”

Id.

¶3            The Code was designed to protect the state’s economy

and welfare, and to “provide a framework for the comprehensive

management     and     regulation   of    the   withdrawal,        transportation,

use,    conservation       and    conveyance         of   rights     to    use    the

groundwater in this state.”             A.R.S. § 45-401(B).        Responsibility

for these critical matters was placed in the hands of ADWR,

A.R.S. § 45-102(A) (2003), headed by a Director, A.R.S. § 45-

102(B),   with       sweeping    “general     control     and    supervision”     of

groundwater, A.R.S. § 45-103(B) (2003).

                                          3
¶4           The Groundwater Code established four initial “active

management    areas”    (“AMAs”).          A.R.S.    §   45-411(A).1     ADWR    was

required to adopt five successive conservation management plans

for each AMA, one for each decade beginning in 1980.2                      A.R.S. §

45-563(A).      For the Tucson, Phoenix, and Prescott AMAs, the

Code’s    “management       goal”    was       to   establish    “safe-yield,”     a

balance   between     the   amount    of       groundwater   withdrawn     and   the

amount    naturally     and    artificially         recharged,    A.R.S.    §    45-

561(12), by no later than 2025.             A.R.S. § 45-562(A).3

¶5           The Groundwater Code required, as part of the first

management plan for the Tucson, Phoenix, and Prescott AMAs, that

the Director establish “[a] conservation program for all non-

     1
          The four original AMAs were the Tucson, Phoenix,
Prescott, and Pinal AMAs.   A.R.S. § 45-411(A). In 1994, the
legislature created the Santa Cruz AMA from a portion of the
Tucson AMA. A.R.S. § 45-411.03(A).
     2
          The first four management plans apply, respectively,
to the four decades between 1980 and 2020.    A.R.S. §§ 45-564
(first plan), -565 (second plan), -566 (third plan), -567
(fourth plan).   The fifth management plan will apply between
2020 and 2025. A.R.S. § 45-568.
     3
           For the Pinal AMA, the “management goal” was “to allow
development of non-irrigation uses as provided in this chapter
and to preserve existing agricultural economies . . . for as
long as feasible, consistent with the necessity to preserve
future water supplies for non-irrigation uses.”     A.R.S. § 45-
562(B).   For the Santa Cruz AMA, the “management goal” was to
“maintain a safe-yield condition . . . and to prevent local
water tables from experiencing long-term declines.”      A.R.S. §
45-562(C).

                                           4
irrigation uses of groundwater.”4                    A.R.S. § 45-564(A)(2).                For

municipal uses,5 the initial plans were to require “reasonable

reductions      in   per   capita    use        and     such    other        conservation

measures as may be appropriate for individual users.”                              Id.     For

the   second    management    period,          the    Director        was    required      to

“[e]stablish additional conservation requirements for all non-

irrigation uses of groundwater.”                 A.R.S. § 45-565(A)(2).                  With

respect   to    municipal    uses,        the    second        plan    “shall        require

additional     reasonable    reductions         in     per   capita         use    to    those

required in the first management period and use of such other

conservation     measures    as     may    be        appropriate       for        individual

users.”   Id.

¶6           The Department’s primary method of implementing the

Code’s conservation requirements has been the “Total Gallons Per

      4
          “Non-irrigation use” is defined by the Code, for all
but the Santa Cruz AMA, as “a use of groundwater other than an
irrigation use.”   A.R.S. § 45-402(28)(a).  “Irrigation use” is
defined generally as the use of groundwater to produce plants
for various agricultural purposes. A.R.S. § 45-402(23)(a).
      5
             “Municipal use” is defined as

      all non-irrigation uses of water supplied by a city,
      town, private water company or irrigation district,
      except for uses of water, other than Colorado river
      water, released for beneficial use from storage,
      diversion or distribution facilities to avoid spilling
      that would otherwise occur due to uncontrolled surface
      water inflows that exceed facility capacity.

A.R.S. § 45-561(11).

                                           5
Capita      Per     Day”    (“GPCD”)    programs   in     the     management       plans.

These programs limit the total quantity of water a provider may

deliver to its customers each year.6                 This approach places the

principal burden of achieving reductions in groundwater use on

water providers, who are charged in ADWR’s management plans with

reducing their total GPCD during each management period.                            While

the second management plan (“SMP”) for the Phoenix AMA directly

regulates groundwater usage by some high-volume end users, the

Phoenix SMP does not impose per capita conservation requirements

directly on all end users.7

                                           B.

¶7                Arizona   Water   Company     (“AWC”)     is    a    private      water

company      operating       in   the   Phoenix    AMA.          See   A.R.S.      §    45-

402(30)(a) (defining “[p]rivate water company”).                         Because AWC

supplies          groundwater     for   non-irrigation          use,    it    is       also

classified under the Groundwater Code as a municipal provider.

See A.R.S. § 45-561(10) (defining “[m]unicipal provider”).                              In

1988,       AWC    filed    administrative      petitions       with   ADWR     seeking

        6
          The total annual quantity of water a provider                                can
deliver to its customers is obtained by multiplying                                    the
provider’s GPCD (set by ADWR in the management plan) by                                the
company’s service area population by the number of days in                             the
year.
        7
          The end users subject to direct regulation in the
Phoenix SMP include turf-related facilities (parks, golf courses
and common areas of housing developments), publicly owned
rights-of-way, and new large cooling users.

                                           6
review   and    rehearing     of     the   Director’s            order      adopting   the

Phoenix SMP.        The Director denied relief.                      In 1990, AWC filed

suit in superior court seeking judicial review of the Director’s

decision.

¶8          AWC’s     complaint      alleged      that     the        SMP   violated   the

Groundwater     Code     because      it       did   not        impose        conservation

regulations directly on AWC’s end users.                             The complaint also

challenged various other provisions in the SMP applicable to

AWC’s water utility companies.                 Shortly after the complaint was

filed, AWC applied to ADWR for administrative review of the GPCD

requirements     imposed      upon    several        of        its    water    utilities,

including its Apache Junction system.                 The superior court action

was stayed pending the Director’s review of AWC’s administrative

applications.        AWC and ADWR eventually resolved all disputes

except those pertaining to the Apache Junction system.                                 The

Apache Junction system remained out of compliance with the GPCD

requirements     of     the    SMP      because           of     rapidly       increasing

nonresidential uses of water, primarily by golf courses, without

proportionate increases in the population served by the utility.8

     8
          When the SMP was promulgated in 1989, the Apache
Junction system pumped 2400 acre feet of groundwater, and served
a population of 20,557.   In 1997, the population of the system
had increased by about fifty percent, but the use of groundwater
had increased sixty-three percent to 3920 acre feet.

                                           7
¶9            After the parties’ failure to resolve the dispute over

the     Apache      Junction        system,        an     administrative         law        judge

conducted      a    hearing      and   recommended          a    recalculation         of    the

Apache    Junction        GPCD    based      on    updated       population      estimates.

Even     after      the    recalculation,          however,       the   Apache     Junction

system was still not in compliance with the SMP, and the judge

recommended denial of AWC’s other requests for relief.                             In 1999,

the     Director          adopted      the        recommended       decision           of    the

administrative law judge, with minor modifications.                                AWC then

filed     suit      in    superior     court        seeking       review    of    the       1999

decision, and the court consolidated this suit with the pending

1990 action.

¶10           AWC’s superior court complaints alleged that the GPCD

mandates in the SMP conflicted with requirements imposed by the

Arizona       Corporation        Commission         under       AWC’s   certificates          of

necessity      and       convenience      to      serve    customers       in    the    Apache

Junction      area.        The    superior         court    therefore      requested         the

Commission to intervene.               The Commission did so and argued that

ADWR    had    no    authority       to   tell       a    water    utility       subject      to

Commission       regulation       which      customers      it     could    or    could      not

serve.        Despite      its    legal      position,       the    Commission         saw    no

present irreconcilable conflict between it and ADWR with respect

to AWC’s situation, and suggested that because it had worked

collaboratively with “sister state agencies” in the past when

                                               8
issues    of   overlapping       regulation         were    presented,   it    was

confident that it would be able to work with ADWR should a

conflict arise in the future.

¶11          In 2002, the superior court entered a judgment holding

that the SMP was unenforceable “because it fails to address

water utilization by end users.”9             The court remanded the case to

ADWR with directions to adopt an amended plan, and forbade the

Department     from   enforcing    the       GPCD   requirement    for   the   AWC

Apache    Junction      system     “[u]ntil          such    deficiencies      are

corrected.”

                                      C.

¶12          ADWR appealed, and in a 2-1 opinion, the court of

appeals affirmed the superior court judgment insofar as it held

the SMP invalid for failure to impose conservation requirements

on end users.     Ariz. Water Co. v. Ariz. Dep’t of Water Res., 205

Ariz. 532, 73 P.3d 1267 (App. 2003).                The majority acknowledged

that “there is no specific statutory provision by which the

legislature definitively ordered the Department to create and

impose conservation measures for end users.”                  Id. at 537 ¶ 18,

      9
          At the time of the trial court’s decision in 2002, the
SMP, which covered the decade from 1990 to 2000, had long since
expired. The issues raised in this case are not moot, however,
because ADWR’s third management plan is virtually identical in
all relevant respects to the SMP and AWC currently has an action
pending in superior court challenging that plan.      See Ariz.
Water Co. v. Ariz. Dep’t of Water Res., 205 Ariz. 532, 535 ¶ 8
n.1, 73 P.3d 1267, 1270 n.1 (App. 2003).

                                         9
73 P.3d at 1272.          Nonetheless, citing various provisions of the

Groundwater       Code,    the    majority      below    “develop[ed]        a    firm

conviction that the legislature intended just that.”                        Id.    The

majority concluded that

      common sense dictates that if one is assigned the duty
      of conserving a limited resource like groundwater, one
      needs   the  authority,   and  one  must   assume  the
      corresponding responsibility, to manage the resource
      throughout its entire cycle, from extraction to
      transportation to consumption and even recharge.   And
      if the manager is to obtain the desired conservation
      result, all those participating in the cycle must be
      managed directly in regard to their conservation
      responsibility, including the customer who uses the
      groundwater and not just the provider who extracts,
      transports, and delivers it to him.

Id.

¶13          Judge      Irvine   dissented      from    this    conclusion.        He

relied primarily on A.R.S. § 45-565(A)(2), which requires the

SMP   to   include        for    municipal     uses     “additional        reasonable

reductions in per capita use to those required in the first

management period and use of such other conservation measures as

may be appropriate for individual users.”                     205 Ariz. at 547 ¶

78,   73   P.3d    at     1282   (Irvine,      J.,    concurring      in   part   and

dissenting    in     part).       Judge    Irvine      read    this   language     as

authorizing the Department to impose conservation requirements

directly on end users, but not mandating such direct regulation.

Id. at 547-48 ¶¶ 76-80, 73 P.3d at 1282-83.                        He also parted

company with the majority on its “common sense” view of the

                                          10
Code, arguing that it was not obvious that direct regulation of

all end users was sensible policy, and that in any event the

legislature        had       left        such    decisions        to     the        Director’s

discretion.        Id. at 548 ¶¶ 81-82, 73 P.3d at 1283.

¶14          Although        it     concluded         that     management       plans          must

regulate     end    users,         the    majority       below       declined       to    decide

whether    the     Groundwater           Code    gave    ADWR     authority         to    impose

conservation       requirements           directly      on   providers         even       in   the

presence of comprehensive regulation of end users, finding that

AWC had not raised the issue.                   Id. at 538 ¶ 27, 73 P.3d at 1273.

Judge Irvine, however, concluded that AWC had raised this issue,

and   explained         in   detail       his   view     that     the    legislature           had

authorized ADWR to impose conservation requirements directly on

providers.          Id.      at    544-46       ¶¶    60-73,     73     P.3d    at       1279-81

(concurring      and      dissenting        opinion).          The    majority       noted      in

dictum that “if we believed Arizona Water had properly raised

the   issue,       we    would      respond      to     Arizona       Water’s       contention

precisely as has our dissenting colleague.”                          Id. at 538 ¶ 27, 73

P.3d at 1273.

¶15          Finally,        the    court       of    appeals     turned       to    an    issue

“presented to the superior court but not decided by it”: whether

ADWR “is authorized to include Central Arizona Project water

used by a provider in determining that provider’s compliance

with its total GPCD requirements.”                      Id. at 536 ¶ 13, 73 P.3d at

                                                11
1271.    The court unanimously concluded that the Groundwater Code

authorized ADWR to consider use of CAP water in determining a

provider’s compliance with the GPCD.                   Id. at 541-43 ¶¶ 47-52, 73

P.3d at 1276-78; id. at 543 ¶ 58, 73 P.3d at 1278 (concurring

and dissenting opinion).

¶16         ADWR petitioned this court for review of the opinion

below insofar as it vacated the SMP for failure sufficiently to

regulate end users.          AWC cross-petitioned for review on the CAP

water issue.       We granted review of both petitions because of the

statewide     importance       of    the     issues       presented.            We     have

jurisdiction pursuant to Article 6, Section 5(3) of the Arizona

Constitution, Arizona Rule of Civil Appellate Procedure 23, and

A.R.S. § 12-120.24 (2003).            Because the case involves issues of

statutory    interpretation,         our    review      is   de   novo.      Bilke       v.

State, 206 Ariz. 462, 464 ¶ 10, 80 P.3d 269, 271 (2003).

                                           II.

¶17         This case presents three related issues of statutory

interpretation.             First,    we        must    determine        whether        the

Groundwater    Code    authorizes      ADWR      to    impose     GPCD    requirements

directly on municipal providers such as AWC.                         If we conclude

that ADWR has that statutory authority, we must next decide

whether the Code requires that the Director, as a prerequisite

for     imposing     such     GPCD     requirements,          must       also        impose

conservation requirements directly on all end users.                            Finally,

                                           12
if we conclude that ADWR can impose GPCD requirements directly

on AWC, we must also decide whether the Code permits ADWR to

consider CAP water use in determining whether AWC has exceeded

the mandated GPCD.

                                     A.

¶18          AWC first argues that the Code provides no authority

for   ADWR   to   impose   GPCD   requirements   directly   on   municipal

providers.10      The argument is grounded on A.R.S. § 45-565(A)(2),

which provides that the SMP “shall require additional reasonable

reductions in per capita use to those required in the first

management period and use of such other conservation measures as

may be appropriate for individual users.”         See also A.R.S. § 45-

564(A)(2) (containing parallel language applicable to the first

management plan).      AWC contends that because the statute refers

to per capita “use,” it confers upon ADWR no authority to impose

GPCD requirements on providers, as opposed to end users, of

groundwater.      Rather, AWC contends, municipal providers may only

be regulated under A.R.S. § 45-565(A)(5), which requires the

      10
          We agree with Judge Irvine that AWC properly raised
this issue in the court of appeals. Ariz. Water Co., 205 Ariz.
at 544 ¶¶ 60-61, 73 P.3d at 1279 (concurring and dissenting
opinion).   In any event, because this court can affirm the
superior court’s judgment on any basis supported by the record,
AWC may raise this argument here. See Cross v. Cross, 94 Ariz.
28, 31, 381 P.2d 573, 575 (1963) (noting that this court “will
consider any legal theory within the issues and supported by the
evidence which tends to support and sustain the judgment of the
trial court”).

                                     13
Director      to     impose         “additional         economically             reasonable

conservation requirements” on private water companies, but does

not refer expressly to per capita use reductions.

¶19          The   premise     of     AWC’s      argument      is   that     a    municipal

provider does not “use” groundwater.                    However, the language of

the Code is directly to the contrary.                          Section 45-565.01(A)

requires     management       plans     to       make     available        to     municipal

providers an alternative “non-per capita conservation program”

(“NPCCP”).         Before     the     Director      can       grant    the       provider’s

application to participate in certain NPCCPs, he must make “a

preliminary        determination        that        the       municipal          provider’s

projected     groundwater       use    is     consistent        with       achieving    the

management goal of the active management area.”                             A.R.S. § 45-

565.01(E)(3)       (governing       applications        for    programs         established

under § 45-565.01(C)(5)) (emphasis added); see also A.R.S. § 45-

565.01(E)(4)       (containing        similar      language         with     respect       to

applications for programs established under § 45-565.01(C)(6)).

The    legislature     thus     plainly       contemplated          that     a    municipal

provider’s transfer of groundwater to end users can itself be a

“use” of that groundwater.

¶20          More significantly, the statute governing NPCCPs makes

plain that the legislature intended that ADWR have the authority

under A.R.S. § 45-565(A)(2) to impose GPCD requirements directly

on    municipal    providers.         Section      45-565.01(H)        states       that   a

                                            14
municipal provider who has filed an NPCCP application “shall

comply with the per capita conservation requirements established

under § 45-565, subsection A, paragraph 2 until the director

approves the application.”                   The same statute provides that after

the application is approved, “the provider is exempt from the

per capita conservation requirements prescribed under § 45-565,

subsection        A,        paragraph        2.”             This     language       conclusively

demonstrates           that       the    legislature             contemplated             that     GPCD

requirements could be imposed directly on municipal providers.

It would make no sense otherwise to offer NPCCP programs, which

are    designed        as        alternatives           to    otherwise       applicable           GPCD

requirements,          to    municipal        providers.              Indeed,       because       NPCCP

programs are only available to municipal providers, and not to

individual        end        users,      §     45-565.01(H)             would        be     entirely

superfluous       if     municipal         providers           were    not    subject       to    GPCD

requirements in the first place.

                                                   B.

¶21          AWC       next       argues     that       before        ADWR    can    impose        GPCD

requirements       on        a    municipal        provider,          it     must    also        impose

conservation requirements directly on the provider’s end users.

This is the issue that divided the court below.

¶22          We start from the premise, candidly acknowledged both

by    AWC   and    the       majority        below,          “that    there    is    no     specific

statutory     provision             by     which        the     legislature          definitively

                                                   15
ordered    the   Department    to    create     and    impose   conservation

measures for end users.”        Ariz. Water Co., 205 Ariz. at 537 ¶

18, 73 P.3d at 1272.       Nonetheless, the court of appeals, based

on its review of certain provisions of the Code, “develop[ed] a

firm conviction that the legislature intended just that.”                    Id.

Our reading of the Code leads us to the opposite conclusion.                 We

hold that while the Code authorizes ADWR to impose conservation

requirements directly on end users, it does not require that the

Director   always   do   so,   or   that   he   must   impose   requirements

directly on all end users.

¶23        The first provision of the Code cited by the majority

below, A.R.S. § 45-492(A)(2), simply provides that “a city, town

or private water company shall have the right to withdraw and

transport groundwater,” and the “landowners and residents” may

use   groundwater    delivered      to     them,   “subject     to   .   .     .

[c]onservation requirements developed by the director pursuant

to article 9 of this chapter [A.R.S. §§ 45-561 to -578].”                This

statute does not mandate that these conservation requirements be

imposed directly on end users; instead, it merely requires that

groundwater use in an AMA be subject to whatever conservation

requirements the Director promulgates under article 9.

¶24        AWC also relies on A.R.S. § 45-563(A).               Section 45-

563(A) generally requires the Director to promulgate management

plans for each AMA for the five management periods, and provides

                                     16
that     “[t]he     plans     shall     include     a     continuing       mandatory

conservation program for all persons withdrawing, distributing

or    receiving     groundwater       designed    to     achieve     reductions      in

withdrawals of groundwater.”              Notably, this statute does not

require the Director to promulgate separate programs for each of

these groups.       Instead, it mandates that each plan include such

a program.        The fact that the onus for complying with the GPCD

program falls primarily on providers surely does not render it

anything other than a “mandatory conservation program” under §

45-563(A).      And, because the GPCD definitively limits the amount

of groundwater that end users in an AMA may receive, it is also

surely a “program for all persons . . . receiving groundwater,”

as contemplated by the statute.

¶25           As did the majority below, AWC places primary reliance

on     the   parallel   provisions       of     A.R.S.    §§     45-564(A)(2)      and

-565(A)(2), which govern the first and second management plans.

Section      45-564(A)(2)     requires    that    the    first      plan   contain   a

conservation       program,    which     with    respect       to   municipal     uses

“shall require reasonable reductions in per capita use and such

other conservation measures as may be appropriate for individual

users.”       Section 45-565(A)(2) provides that for municipal uses

the second plan “shall require additional reasonable reductions

in per capita use to those required in the first management

period and use of such other conservation measures as may be

                                         17
appropriate          for    individual        users.”            AWC     argues      that     these

subsections mandate that the SMP include conservation measures

imposed directly on individual users.

¶26           AWC’s        reading       of   these     provisions           is    flawed.        The

final clause of each statute requires only that the plan include

“such   other        conservation         measures         as    may    be    appropriate         for

individual users.”                This clause does not require the imposition

of conservation measures on end users.                                 Instead, the statute

tells   the     Director          to    impose      only     such      measures      “as    may    be

appropriate,” leaving open the possibility that he may conclude

that no such measures, or only limited ones, are appropriate.

Thus,     any    purported             requirement         for    mandatory         conservation

requirements on all end users must necessarily come from the

previous clause of each statute, which provides that the program

developed       by    the     Director        for     municipal        uses       “shall   require

reasonable reductions in per capita use,” A.R.S. § 45-564(A)(2),

or “additional reasonable reductions in per capita use to those

required in the first management period,” A.R.S. § 45-565(A)(2).

¶27           However, neither of these provisions states that the

portion    of    the        plan    requiring         “reasonable        reductions         in    per

capita use” must be imposed directly on end users.                                   Rather, the

statutes      each     provide         that   the      “program        shall       require”      such

reductions.          A.R.S. §§ 45-564(A)(2) (emphasis added), -565(A)(2)

(same).         The        GPCD    program       in    the       Phoenix      SMP    meets       that

                                                 18
statutory requirement.                 It requires reductions in per capita

use,     even    if        the     requirement       is   achieved      through        direct

regulation of AWC’s spigot, rather than through individualized

regulation of each user’s faucet.

¶28           AWC also suggests that §§ 45-564(A)(2) and -565(A)(2)

only     pertain          to     regulation     of    end     users,     and        that   the

requirement          in    each     statute    for    plans    requiring       “reasonable

reductions in per capita use” must therefore necessarily require

imposition of such measures on end users.                            But this reading

effectively rewrites the statutory scheme.                       For example, § 45-

565(A)(2) provides that for municipal uses, “the program shall

require additional reasonable reductions in per capita use . . .

and     use     of        such     other    conservation      measures         as    may   be

appropriate for individual users.”                    AWC reads the statute as if

it     instead       provided        that     “the   program     shall     require         for

individual users additional reductions in per capita use . . .

and     use     of        such     other    conservation      measures         as    may   be

appropriate.”             But such a reading would mean that § 45-565(A)(2)

provided no basis for imposing GPCD requirements on anyone but

individual users.                As we have noted above, A.R.S. § 45-565.01(H)

effectively dooms any such argument, by stating that a municipal

provider who applies for an NPCCP is not exempted from “per

capita    conservation             requirements      established       under    §     45-565,

subsection A, paragraph 2” until the application is approved.

                                               19
This   statute      necessarily      assumes      that          §    45-565(A)(2)        is     not

limited       to      authorizing     the         imposition            of     conservation

requirements on individual users.

¶29           In short, the express language of the Code does not

support the conclusion reached below that the SMP must include

mandatory      conservation      requirements          imposed          directly         on     end

users.       Indeed, the majority of the court of appeals effectively

conceded as much, suggesting instead that “common sense dictates

that   if     one   is    assigned    the    duty          of       conserving      a    limited

resource like groundwater, one needs the authority, and must

assume the corresponding responsibility, to manage the resource

throughout its entire cycle.”                    Ariz. Water Co., 205 Ariz. at

537 ¶ 18, 73 P.3d at 1272.            The court of appeals therefore held

that the statute required management of groundwater use by end

users,       because     “legislative       enactments              [must]    be        given      a

sensible construction.”           Id. ¶ 19.           While the legislature could

have sensibly reached the conclusion that direct regulation of

all    end    users      was   necessary,        it    also         could    have       sensibly

concluded that the goal of achieving per capita reductions in

groundwater use could be most effectively served by leaving to

the discretion of the expert Director of ADWR the decision about

whether      GPCD   requirements      should          be    imposed         directly          on   a

relatively small number of providers, rather than on hundreds of

thousands of end users.              “Common sense” could lead to either

                                            20
conclusion, and thus provides no basis for concluding that the

statute must have envisioned direct regulation of end users.

¶30         In circumstances like these, in which the legislature

has not spoken definitively to the issue at hand, “considerable

weight     should        be       accorded     to        an     executive       department’s

construction     of          a     statutory        scheme       it    is     entrusted    to

administer.”         Chevron,          U.S.A.,       Inc.       v.    Natural      Res.   Def.

Council, Inc., 467 U.S. 837, 844 (1984).                               In such cases, “a

court may not substitute its own construction of a statutory

provision     for        a        reasonable        interpretation          made     by    the

administrator       of       an    agency.”          Id.        ADWR    has     consistently

interpreted the Code as allowing it to impose GPCD requirements

directly    on      providers          without           also    imposing       conservation

requirements directly on all end users, and that interpretation

should be given great weight in the absence of clear statutory

guidance to the contrary.                See Long v. Dick, 87 Ariz. 25, 29,

347 P.2d 581, 584 (1959) (holding that although administrative

interpretation of statutes is not binding on the court, the

court will accept an administrative body’s interpretation when

there is “[a]cquiescence in meaning over long periods of time”

so long as the interpretation is not “manifestly erroneous”).

¶31         Indeed, ADWR is “precisely the type of agency to which

deference    should          presumptively          be    afforded.”          Fed.   Election

Comm’n v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 37

                                               21
(1981).      The legislature mandated that the Director be an expert

in    the   field.      See      A.R.S.    §       45-102(D)    (requiring          that    the

Director      “be     experienced       and        competent    in     water    resources

management      and         conservation,           and   .     .      .     have     proven

administrative        ability”).          In   light      of    that       expertise,       the

legislature gave the Director, known colloquially as the “water

czar,”      Desmond    D.     Connall,     Jr.,       A   History      of    the     Arizona

Groundwater Management Act, 1982 Ariz. St. L.J. 313, 333, broad

powers to achieve groundwater conservation.                          See A.R.S. § 45-

103(B)      (vesting        in    the     Director         “general          control        and

supervision” of state groundwater).                       In cases like this, in

which the statutory language is admittedly not dispositive,11 the

Director’s expert interpretation deserves considerable deference

by the judiciary, and should not be overturned simply because

judges find a greater “sensibility quotient,” Ariz. Water Co.,

205 Ariz. at 537 ¶ 19, 73 P.3d at 1272, in an alternative

interpretation of the statute.

¶32           In arguing against the Director’s interpretation, AWC

contends     that     the    legislature       could      not   have        intended       that

municipal providers be required to comply with GPCD requirements

without also providing them with tools to enforce cooperation by

       11
          See Ariz. Water Co., 205 Ariz. at 538 ¶ 26, 73 P.3d at
1273 (“[W]e must agree with the Department that the legislature
did not expressly order inclusion of end-user conservation
measures in the Department’s management plans . . . .”).

                                              22
end users.       But the legislature could have rationally concluded

that the Director was in the best position to decide whether

direct   regulation       of   end   users    in      any   particular         plan   was

necessary to achievement of per capita conservation goals.                            In

certain circumstances, such direct regulation may be the most

efficient    method       of    achieving       the     desired         reduction      of

groundwater use.      In others, “imposing conservation requirements

on all end users who receive groundwater may do little to reduce

total groundwater use,” and “[t]he resources devoted to creating

and enforcing individual conservation requirements may be more

effectively utilized in other ways.”                  Id. at 548 ¶ 82, 73 P.3d

at 1283 (concurring and dissenting opinion).

¶33         As    Judge   Irvine     noted,     “whether     it    is    sensible      to

regulate end users is simply not addressed by the record before

us and is completely beyond our expertise.”                  Id. at 547 ¶ 77, 73

P.3d at 1282.       Our job is statutory construction, and for the

reasons set forth above, we hold that the Code left the decision

about whether to require direct regulation of groundwater users

to the discretion of the expert “water czar.”

¶34         Our conclusion is buttressed by the fact that neither

AWC nor the courts below could articulate precisely what sort of

regulation of end users would suffice under their view of the

statute.     The    trial      judge,   after    rejecting        the    SMP    for   its

failure to regulate end users directly, stated he did not think

                                         23
that the Code required regulation of “each user or necessarily

even for each category of user, but in some way we have to meet

the    statutory       mandate      of   having    something    in     a    plan      that

addresses the problem with an end user.”                    Id. at 549 ¶ 84, 73

P.3d    at     1284      (concurring     and     dissenting    opinion)         (quoting

transcript of trial court proceedings).                  But the SMP at issue

here did impose conservation requirements directly on some end

users, see supra n.7, and the superior court failed to indicate

how much more direct regulation was needed in order to comply

with the Code.           The majority below provided no greater guidance

as to what the Code required, simply directing the Department to

“return       to   the    management      plan    drawing     board”       to    “devise

appropriate conservation measures for its management plan that

include end users.”           Id. at 538 ¶ 26, 73 P.3d at 1273.                  Because

even    AWC    concedes      that    “faucet-by-faucet”        regulation        of    end

users is not required by the Code, and because the SMP at issue

does regulate some end users directly, it is not clear what

“appropriate          conservation       measures”    the     court        of    appeals

believes are mandated by the Code.12

       12
              As Judge Irvine observed:

       Arizona Water does not argue that the specific end
       user measures adopted by the Department are not
       “appropriate.”   If it made such an argument courts
       would have a statutory basis upon which to review the
       actions of the Department.   The trial court's order
       here, however, merely tells the Department to again

                                           24
¶35            In short, we conclude, as did the dissenting judge

below,     that   while   the   Code   requires     the    SMP   to    provide   for

reductions in per capita use of groundwater, the management plan

need only impose such conservation measures that the Director

concludes       are   “appropriate”      directly     on    individual       users.

A.R.S.     §   45-565(A)(2).       The    Director    thus       had   the   facial

statutory authority to promulgate an SMP that did not impose

conservation measures directly on all of AWC’s end users.13

_______________________________
      exercise its discretion to develop a management plan,
      but to do it better.       Its inability to be more
      specific is strong evidence that the language of the
      statute simply does not support its ruling.

Ariz. Water Co., 205 Ariz. at 549 ¶ 86, 73 P.3d at 1284
(concurring and dissenting opinion).
      13
          AWC also argues, as it did below, that imposing
responsibility on municipal providers to limit GPCD places
providers in an impossible regulatory conflict between ADWR and
the Corporation Commission because a public service corporation
cannot unilaterally refuse to serve or curtail service to
customers in its service area.    See A.R.S. § 40-321(B) (2001)
(requiring public service corporations to render service “upon
proper demand and tender of rates”). While arguing in the court
of appeals that ADWR did not have the authority to tell AWC
which customers it must serve or how much each customer could
receive, the Commission took the position that there was no
necessary conflict between its position and ADWR’s GPCD
requirements, noting that “there is nothing to prevent Arizona
Water from asking the Commission to allow it to curtail service
in appropriate circumstances.”   Ariz. Water Co., 205 Ariz. at
539 ¶ 28, 73 P.3d at 1274. The court of appeals thus refused to
address AWC’s arguments on this point.   Id. at 538, 73 P.3d at
1273; id. at 544 ¶ 59, 73 P.3d at 1279 (concurring and
dissenting opinion).     We agree.     This case presents “no
inevitable conflict between the jurisdictions of the Department
and the Commission” and there is no need to today “address a

                                         25
                                      C.

¶36         For    each   municipal    provider    such      as   AWC,    ADWR

establishes    a   GPCD   in   the   applicable   management      plan.    In

analyzing compliance with the GPCD program, ADWR analyzes the

provider’s water use under the “stacking” method.                 Under this

method,

      the Department first counts against the provider’s
      total GPCD requirement, all water used by a water
      provider during the year, except for spillwater and
      effluent that is not recovered effluent.       Although
      water used by the provider during the year from such
      sources is counted when determining the provider’s
      compliance   with    its   total    GPCD   requirement,
      groundwater is counted last.      If the provider is
      determined to be out of compliance with its total GPCD
      requirement, the provider is out of compliance only to
      the extent by which the amount of groundwater used
      exceeds the provider’s total GPCD requirement.

Ariz. Mun. Water Users Ass’n v. Ariz. Dep’t of Water Res., 181

Ariz. 136, 139-40, 888 P.2d 1323, 1326-27 (App. 1994) (“Water

Users”) (footnote omitted).          Under this method, a provider who

uses no groundwater is always in compliance with its GPCD, no

matter how much water it uses from other sources.                 A provider

who uses only groundwater is limited to the amount specified by

the GPCD.     For providers using some combination of water sources

including groundwater, ADWR will calculate the provider’s total

water use (excluding spillwater and non-recovered effluent), and

_______________________________
speculative conflict.”          Id. at 544    ¶   59,   73    P.3d   at   1279
(concurring and dissenting opinion).

                                      26
in the event of any excess over the GPCD, will consider the

provider out of compliance with the management plan only to the

extent the excess is attributable to groundwater.

¶37          AWC uses a combination of CAP water and groundwater to

serve its Apache Junction customers.                Because the total amount

of water used from these two sources exceeds the applicable GPCD

limitations, ADWR has determined that AWC is out of compliance

with the SMP.      As such, AWC is subject to various enforcement

actions and penalties.          See A.R.S. §§ 45-634 to -636.

¶38          AWC contends that ADWR’s counting of CAP water in its

“stacking” method is not authorized by the Code and is contrary

to the Groundwater Act’s general policy of limiting groundwater

use.   See A.R.S. § 45-107(C) (2003) (providing that the Director

does not have authority to limit rights of various individuals

and entities to contract with the secretary of interior for

delivery   of    CAP    water).      The    court    of   appeals    unanimously

rejected this argument.          Ariz. Water Co., 205 Ariz. at 541-43 ¶¶

47-52, 73 P.3d at 1276-78; id. at 543 ¶ 58, 73 P.3d at 1278

(concurring and dissenting opinion).

¶39          AWC’s argument starts from the premise that the Code

only authorizes ADWR to adopt conservation programs for “all

non-irrigation     uses    of    groundwater.”       A.R.S.   §§    45-564(A)(2)

(governing      first     management       plan),    -565(A)(2)     (containing

identical language with respect to second plan).                    Because CAP

                                       27
water is not groundwater as defined in A.R.S. § 45-101(5) (2003)

(“water under the surface of the earth”), AWC contends that ADWR

cannot count CAP water in determining whether a provider has

complied with the GPCD, which is plainly a conservation program.

See A.R.S. § 45-402(28)(a) (defining “[n]on-irrigation use” as

“a use of groundwater other than an irrigation use”).

¶40          The Code is not as clear on the subject as AWC claims.

The   same    sections      cited    by   AWC,   after        providing          that    the

Director     may    establish     conservation        programs           for   “all     non-

irrigation     uses    of    groundwater,”       go     on     to        require      “[f]or

municipal     uses”     that    management       plans       include           “reasonable

reductions     in     per   capita    use.”           A.R.S.        §§     45-564(A)(2),

-565(A)(2).        In turn, A.R.S. § 45-561(11) defines “[m]unicipal

use” as

      all non-irrigation uses of water supplied by a city,
      town, private water company or irrigation district,
      except for uses of water, other than Colorado river
      water, released for beneficial use from storage,
      diversion or distribution facilities to avoid spilling
      that would otherwise occur due to uncontrolled surface
      water inflows that exceed facility capacity.

¶41          Several     things     are   noteworthy         about        §    45-561(11).

First, it occurs in the same article as §§ 45-564 and -565, and

requires use of its definitions in that article “unless context

otherwise requires.”           A.R.S. § 45-561.              Second, § 45-561(11)

defines “[m]unicipal use” as extending to “all non-irrigation

uses of water.”        (Emphasis added.)         If the legislature meant to

                                          28
limit “municipal use” to “non-irrigation uses of groundwater,”

it could have done so without adding the phrase “of water,”

because A.R.S. § 45-402(28)(a) already defined “[n]on-irrigation

use” as “a use of groundwater other than an irrigation use.”

(Emphasis added.)         The use of the term “of water” thus suggests

a   broader    scope   for      “municipal     use”   other    than   just   use   of

groundwater.       Moreover,       the   balance      of   §   45-561(11)    plainly

includes use of Colorado River water within the definition of

“municipal use.”14

¶42           Given § 45-561(11), AWC’s argument must necessarily be

that “context otherwise requires” that the term “municipal uses”

in §§ 45-564(A)(2) and -565(A)(2) be interpreted as “municipal

uses of groundwater.”           Put differently, AWC must be arguing that

the first sentence of each subsection, which generally requires

ADWR    to    establish        “conservation     requirements      for   all   non-

irrigation      uses      of     groundwater,”        provides     the   necessary

       14
          In 1990, the predecessor of § 45-561(11) (then
numbered § 45-561(6)) was amended to add the phrase “except for
uses of water, other than Colorado river water, released from
storage facilities into a surface water distribution system to
avoid spilling.”   1990 Ariz. Sess. Laws, ch. 71, § 3.   As the
court in Water Users pointed out, “if the term ‘water’ used in
the original definition of ‘municipal use’ was limited to
groundwater, the legislature would have had no reason to amend
the   definition  of   ‘municipal  use’  to  expressly  exclude
spillwater, a form of surface water.”    181 Ariz. at 142, 888
P.2d at 1329.       Water Users therefore concluded that the
legislature meant, in defining municipal use, to include all
other sources of water not specifically excluded.   Id. at 142-
43, 888 P.2d at 1329-30.

                                         29
“context”      for    concluding     that      the   requirement     in    the    second

sentence that ADWR adopt conservation programs for “municipal

uses” was only to such “uses” of groundwater.

¶43           There are two problems with such an argument.                       First,

if the legislature really meant to limit the term “municipal

uses”    in    §§     45-564(A)(2)       and     -565(A)(2)   to     such    uses      of

groundwater, it could have said so expressly.                   See Water Users,

181 Ariz. at 142, 888 P.2d at 1329 (noting that throughout the

Code the legislature used the term “water” when it meant to

“refer    to     water       from   all     sources,”       versus    its        use    of

“groundwater”          or    “surface       water”     when    it     intended         to

“distinguish between different sources of water”).                        Second, this

argument requires that we interpret the third sentence of each

subsection,          which    mandates      conservation       requirements            for

“industrial         uses,”    to    be    limited      to   industrial       uses       of

“groundwater.”         But such an interpretation flies in the face of

the definition of “[i]ndustrial use” in § 45-561(5) as “a non-

irrigation use of water not supplied by a city, town or private

water company.”         (Emphasis added.)

¶44           In addressing a similar issue, the court of appeals

concluded in Water Users that the term “municipal uses” in § 45-

565(A)(2) should be interpreted, consistent with its definition

in § 45-561(11), as including all sources of water, including

recovered effluent.           181 Ariz. at 142-43, 888 P.2d at 1329-30.

                                            30
Water Users therefore concluded that recovered effluent could be

counted under the “stacking” method in determining a municipal

provider’s compliance with its GPCD requirements.                    We reach the

same conclusion as to CAP water.

¶45           Moreover, even if we were to accept AWC’s contention

that CAP water is not included in the phrase “municipal uses” in

§    45-565(A)(2),   we   would    still       reach   the    same   result.    The

“stacking” method does not restrict a municipal provider’s use

of CAP water; any provider may use as much CAP water as it

wishes.       Rather, ADWR simply takes use of CAP water and other

surface water into account when determining the GPCD compliance

of    those   providers    who    also    use    groundwater.         Because    the

groundwater is counted last, the Department restricts only the

use of that groundwater through the “stacking” method.                           See

Water Users, 181 Ariz. at 141, 888 P.2d at 1328 (concluding that

even if ADWR had no authority to regulate effluent, counting

recovered effluent under the “stacking” method “regulates only

groundwater usage,” because non-compliance is measured not by

how    much   effluent    was    used,    but    “only   to    the   extent    which

groundwater use exceeds a provider’s total GPCD requirement”).

                                         III.

¶46           For the reasons above, we conclude (a) that ADWR has

the statutory authority to impose GPCD requirements on municipal

providers; (b) that the Code does not mandate that ADWR impose

                                          31
conservation requirements on all end users before imposing GPCD

requirements     on    municipal    providers;      and     (c)       that   ADWR    may,

under   its     “stacking”   method,       consider       use    of    CAP   water     in

determining GPCD compliance.

¶47           These    holdings    do     not    dispose        entirely     of     AWC’s

claims.     Section 45-565(A)(2) authorizes only requirements for

“reasonable     reductions    in    per    capita     use.”      (Emphasis        added.)

AWC argued during the administrative proceedings below that the

GPCD for its Apache Junction water utility was not reasonable,

in light of various particular circumstances of that utility.

The agency rejected this argument.                The superior court did not

reach this claim, however, finding the SMP facially invalid for

failure to impose direct regulation on all end users.                             Because

it affirmed the judgment of the superior court, the court of

appeals also did not reach the issue.                     Given that the courts

below     did   not    address     AWC’s       argument    that        the   GPCD    was

unreasonable      as   applied     to   the     Apache    Junction       utility,      we

decline in the first instance to address that fact-intensive

issue, but instead remand this case to the superior court for

such other proceedings as may be necessary.

                                          32
¶48       The opinion of the court of appeals is affirmed in

part and vacated in part, and the judgment of the superior court

is vacated.   This case is remanded to the superior court for

further proceedings consistent with this opinion.

                               Andrew D. Hurwitz, Justice
CONCURRING:

                                       _
Charles E. Jones, Chief Justice

____________________________________
Ruth V. McGregor, Vice Chief Justice

                                       _
Rebecca White Berch, Justice

                                       _
Michael D. Ryan, Justice

                                  33