An open meeting at the Arizona Corporation Commission was held Tuesday, June 12th and Johnson Utilities was item #20. While most of San Tan Valley has been watching the dockets concerning water and air quality issues, billing, water pressure, etc, this docket (WS-02987A-06-6667) was seeking an extension of a conditional Certificate of Convenience and Necessity (CC&N) for Johnson Utilities.
Mr John Kaites, the Vice President of the Board for the McRae Group of Companies was the first to speak. "This decision will affect roughly 1200 acres in a "dramatic way," said Kaites. "There is no one else who can provide us with water or sewer."
"Developers aren't going to be able to put houses up on these lots until such time as there is confidence that there is a service provider in this area" continued Kaites. "Queen Creek and Florence are not in a position to service us right now. They are miles and miles away from our location."
Commissioner Tobin made it clear that while he understood the developers concerns, he wants to be sure that the builders customers are "well served". "This is not about the time frame or about not having another choice" said Tobin. "There are issues here."
Kaites claimed that not approving this extension "puts substantial amount of capital at risk and I don't think we are in a position where the public will be underserved if we are able to continue to be served by Johnson Utilities."
Stacy Brimhall, Supervisor Goodman's cousin, with Langley Properties was second to speak and also supported the extension stating that he was "hoping to grow houses someday on our farm".
Ironline Partners who one year ago purchased about 150 acres along Hunt Hwy and 300 acres just west of Anthem, also spoke in support of the extension as they are looking to build about 1900 units.
Bert Acken spoke on behalf of Florence and Queen Creek and while he was not requesting that the application be denied, he was hoping it could be deferred. "The record for this docket is "stale" and should reflect all of the information that is known today regarding Johnson Utilities service."
Commissioner Olson asked if the existing system was going to provide service to the area in question or if the company was going to build a new system. Crockett, a Johnson Utilities attorney, explained that it would be an expansion to the existing system.
Crockett also announced the company's plan to decommision the Section 11 plant and the new plant that is to be built at Copper Basin to service the area.
Commissioner Olson asked Crockett to explain the "impact this new territory will have on the existing water system given the recent reports of low water pressure at Magic Ranch and other communities?" Crockett was confident that it would not affect the area. The company was waiting on approval from ADEQ to allow the company to treat for nitrates onsite which would allow them to bring three more wells online providing more than a million gallons of water.
Commissioner Tobin again voiced his concerns about what happens once the builders are done and gone and the homeowners are handed over to Johnson Utlities. "I feel like we'd be complicit expanding this utility."
Commissioner Olson shared Tobin's concerns adding "I have serious concern about moving forward on this extension of time as this area has shown itself to be challenged."
Looking to clarify some possible confusion, staff member Elijah Abinah, reminded the commission that Johnson Utilities already had the CC&N currently. The extension being requested was to allow the company more time to get an approval to construct (ATC) from ADEQ. In order to take the CC&N away from Johnson Utilities, the Commision would need to have an evidentiary hearing.
This clarification led to a 20 minute Executive Session with legal counsel.
Tobin asked if Queen Creek or Florence could apply for a CC&N if it was taken away from Johnson Utilities. Abinah answered, "No, neither Queen Creek or Florence could apply for the CC&N if Johnson Utilities no longer had it as they are not companies regulated by the Arizona Corporation Commission."
Kaites who seemed to be concerned that the extension request was losing support, spoke again. "We aren't going to be able to sell anything if we don't get this extension. We have to take advantage of opportunities when we can. No one is going to buy properties from us when they don't know if they are going to get water or sewer."
Kaites stated that the developers have pulled together funding and are ready to close on the land so they can start building, but without water or sewer, no one will buy anything.
"This is such a small thing", said Kaites. "But it's not Mr Kaites," interrupted Tobin. "That little small thing transitions into a big thing with this CC&N. We have an obligation to protect those people who will be paying the bills with hook up to your homes. We need to hold off until we get more clarity."
"The challenge we have is certainty," said Kaites. "That's always the challenge developers have. When you have builders who have many options, they go to the place where there is certainty. If we can't provide certainty in water or sewer, then they'll skip over us and go somewhere else."
"If anyone thinks that anyone out in this utility has any certainty you are missing the entire point. That's the point" countered Tobin.
Commissioners Olson, Dunn and Tobin all repeated their discomfort in moving forward until the issues before them are addressed.
The item was then pulled from agenda and no extension was approved at this time.
BLOG COMMENTS POWERED BY DISQUS
On June 13th, Commissioner Tobin filed a comment to the docket asking for the Commission to "consider formally expunging the conditional CC&N in this matter through ARS §40-252. It is my hope that such a proceeding would happen as quickly as possible, but no later than Friday June 29, 2018."