San Tan Valley Area Information

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ACC Slaps Johnson Utilities with $600K Fine

Johnson Utilities Interim Manager Update

Commissioners acted swiftly to pursue relief for customers of a troubled utility by directing staff to determine whether Johnson Utilities, LLC should be held in contempt of a Commission order and instructing staff to investigate the revocation of the utility’s ability to operate in San Tan Valley.

During the meeting, the selected Interim Manager, EPCOR, provided an update to Commissioners outlining the work that has transpired over the last two weeks since it signed a consulting agreement. EPCOR representatives presented information found during site visits to four wastewater treatment plants and 11 lift stations belonging to Johnson Utilities. Pictures from these site visits showed corroded equipment and hazardous worksites. EPCOR revealed it has not been granted access to Johnson Utilities’ financial information and stated it was unable to act as an interim manager without access to financials and all facilities.

Commissioners made their direction clear:

Johnson Utilities is to open its books and provide immediate access to the Interim Manager so it can begin the process of restoring clean and safe water and wastewater operations for the customers.

Last month, Commissioners voted to direct staff to obtain an agreement with an Interim Manager who shall assume operation of Johnson Utilities, LLC as soon as possible on an interim basis. This action will remain in place until further order of the Corporation Commission.

Johnson Utilities, LLC provides water and wastewater utility services in portions of Maricopa and Pinal Counties. The company services more than 25,600 service connections and 35,000 sewer laterals.

All documents related to the Johnson Utilities, LLC, interim manager appointment may be found in the Corporation Commission’s online docket at http://edocket.azcc.gov by searching for docket number WS-02987A-18-0050.

Commissioners add penalty amendment to address water outage violations

In a second, related agenda item, Commissioners discussed and voted on a judge’s order addressing recent water outages in the Johnson Utilities’ service area. The vote came with an amendment from Commissioner Boyd Dunn to fine Johnson Utilities $600,000 for disconnecting irrigation and construction meters during the outage.

Judge Jane Rodda outlined the issues in a Recommended Opinion and Order stating a high volume of low water pressure customer complaints were submitted to the Arizona Department of Environmental Quality and the Corporation Commission between May 17 and June 4, 2018. During this time, the company’s Hardison Well pump motor failed taking the well offline for approximately 70-hours. The utility provider told the Corporation Commission it worked to counter the effects of a broken pump by turning off irrigation meters in common areas, stopping all construction water, and posting the motor/low water pressure advisory on its website.

The judge’s order acknowledged the “totality of evidence” did not outweigh the need for the Commission to continue with the appointment of an interim manager “until the Commission can be assured that Johnson’s management is willing and capable of operating the Company in a manner that is just, reasonable, safe, proper, adequate, and sufficient.”

Commissioners today agreed with the judge’s decision voting to approve the Recommended Opinion and Order and added the amendment to fine Johnson Utilities $600,000. The penalty comes from Commissioner Dunn’s amendment to order Johnson Utilities to pay $5,000 per offense arising from 120 separate offenses of disconnecting irrigation and construction meters.  (*Note: The Commissioners stated that the company cannot charge the customers to pay the fine.)

Find all documents related to the judge’s order and Commission investigation of Johnson Utilities, LLC water outages in the Corporation Commission’s online docket at http://edocket.azcc.gov by searching for docket number WS-02987A-18-0151.

The Arizona Corporation Commission was established by the state’s constitution to regulate public utilities and business incorporation. The five Commissioners elected to the Corporation Commission oversee executive, legislative, and judicial proceedings on behalf of Arizonans when it comes to their water, electricity, telephone, and natural gas resources as well as the regulation of securities, pipeline, and railroad safety. To learn more about the Arizona Corporation Commission and its Commissioners, visit http://azcc.gov.

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15 Dec
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