Which statement accurately describes the regulation of private water companies in Arizona?

The regulation of private water companies in Arizona is primarily overseen by the Arizona Corporation Commission. This body is responsible for ensuring that these companies operate in compliance with state laws, maintain service standards, and set fair rates for consumers. The Commission's oversight includes the approval of rates charged to customers, which aims to protect consumers and ensure that companies deliver reliable water service.

While private water companies must also adhere to certain federal regulations, such as those imposed by the Environmental Protection Agency (EPA) regarding water quality, the distinct role of the Arizona Corporation Commission is critical in the state-specific context. This regulatory relationship ensures that private water providers operate within a structured framework aimed at safeguarding public interest, balancing the needs of both the utilities and the consumers they serve.

The other options do not accurately capture the regulatory landscape: private water companies are not entirely independent or unregulated, nor are they solely under local jurisdiction. Thus, the chosen answer reflects the correct understanding of the regulatory environment surrounding private water companies in Arizona.