For Immediate Release | 10-11-18      
  Media Contact | Nick Debus      
  Direct | 602-542-0728      
  E-Mail | ndebus@azcc.gov      
         
 

Arizona Corporation Commission October Open Meeting Highlights

 
 

PHOENIX — The Arizona Corporation Commission today held its monthly Open Meeting to discuss and vote on various water, electric, and railroad agenda items. Here’s a brief recap of the meeting highlights:

Johnson Utilities, LLC Held in Contempt

Commissioners voted to hold water and wastewater operator Johnson Utilities, LLC in contempt of Commission Decision No. 76785 and assessed the company a $5,000 penalty. In the July 2018 decision, Commissioners voted to appoint an interim manager to run daily operations of Johnson Utilities. The company was ordered to cooperate fully with the interim manager and to supply all necessary documents, records, and other information requested, whether in the possession of Johnson Utilities or its affiliates, Hunt Mgt, LLC or Ultra Management, LLC.  EPCOR Water Arizona, Inc. was then selected to serve as interim manager.

In August 2018, EPCOR reported it was not getting full access to and control of Johnson Utilities’ financials. Commissioners immediately called for a hearing to determine whether Johnson and its managers should be held in contempt for not complying with the Commission decision. 

Judge Sarah Harpring presided over the contempt hearing August 24 and 27, 2018. On August 28, 2018, a Pinal County Superior Court Ruling ordered Johnson to turn over full and exclusive access to and control over all revenues paid by customers of Johnson for utility service to EPCOR by August 30, 2018. Johnson complied with the Pinal County Court Ruling, and EPCOR is now operating Johnson as interim manager. 

Today, Commissioners adopted Judge Harpring’s Recommended Opinion and Order saying Johnson’s refusal to allow EPCOR the access and control needed for EPCOR to conduct the business and affairs of Johnson constituted contempt of the Commission under A.R.S. § 40-424 and assessing a $5,000 penalty to be paid within 60 days of the decision. 

Interim Manager Update

EPCOR  provided a lengthy update to Commissioners today detailing the company’s first 30 days as interim manager. Company representatives Jeff Stuck and Troy Day outlined the results of the company’s evaluation of the Johnson systems to date. EPCOR detailed challenges it has found with water quality, continued low water pressure issues, water supply, wastewater treatment plants, and finances. Day stressed the need for a hold on adding new connections to the systems, stating that additional connections will exacerbate the problems in the water and wastewater systems and that EPCOR needs to improve service to existing customers, who “are already at risk.” 

EPCOR’s report was filed by Commission staff on October 10, 2018.  EPCOR’s report outlines Johnson’s service area, stating it currently services approximately 28,100 water connections and 38,500 sewer connections in a 160 square mile service area. EPCOR states, “based on new water and sewer account data from the last 18 months, the Johnson Utilities customer base has grown by 3,024 sewer connections (168 per month) and 2,034 water connections (113 per month). This rate is equivalent to approximately a 5-percent annual growth.”

Commissioners deliberated the significance of a decision to place a hold on any future connections in the Johnson service area, even on a temporary basis. Discussion addressed concerns about a possible rush on meter applications. 
 
“We saw an uptick as soon as we were named interim manager,” said Day. “The majority of new meters have been installed on (vacant) lots. There is a new meter rush going on.” 
 
Ultimately, Commissioners voted to approve an order proposed by staff, with an amendment, resulting in a general stay on new meter connections for a 96-hour period, with some exceptions. Corporation Commission staff plan to meet with affected landowners Friday morning to discuss options for a resolution while working to ensure current customers receive water service that meets or even exceeds federal and state regulatory standards. Commissioners plan to reconvene to discuss the matter on Monday, after staff has the opportunity to meet with stakeholders.
 
EPCOR is hosting a community meeting on Thursday, October 11, from 6-7:30 p.m. at Central Arizona College in San Tan Valley. Details can be found at https://johnsonutilities.com under the “Updates from EPCOR” tab.  
 
All  documents related to these Johnson matters can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov by entering  docket number WS-02987A-18-0050
 
Direct link to EPCOR system evaluation report: http://docket.images.azcc.gov/0000192818.pdf.
 

Union Pacific Railroad Company Approval to Modify Grade Crossing in Pima County

Today Commissioners voted to approve the application of Pima County Public Works to modify the existing public grade crossing of Union Pacific Railroad at the intersection of Aerospace Parkway and Old Nogales Highway in Pima County.
 
On May 31, 2018 Pima County Public Works filed with the Corporation Commission its application to modify the existing grade crossing at the intersection of Aerospace Parkway and Old Nogales Highway. The application seeks approval to widen the existing two-lane roadway to six-lanes and the addition of raised medians to the existing crossing. The existing automatic gates will be upgraded, new median gates will be installed, and a new cantilever will be added for west bound traffic. Additionally, Constant Warning Time Circuitry will also be added during construction. The proposed improvements are consistent with other similar crossings in Arizona. Commissioners and Safety Division Staff believe these modifications are important to improve public safety at the crossing.   
 
All documents related to this agenda can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number RR-0639A-18-0142.
 

Commissioners Amend Decision Regarding Union Pacific Railroad in Pinal County

Commissioners today approved the application by Union Pacific Railroad to modify Decision No. 70480, first approved by the Corporation Commission in 2007.
 
The original decision approved the alteration of six Union Pacific Railroad grade crossings in the city of Eloy in Pinal County. The application provided for the construction of a second set of mainline tracks parallel to the company’s existing tracks that cross the six roadways in the city. The decision required that the railroad file average daily traffic count reports for the six crossings with the Corporation Commission every five years from the effective date of the decision.
 
Union Pacific Railroad has filed average daily traffic counts for the crossings in 2013, the first time they were required to under the stipulation of the Decision. In 2018 the company filed a motion to modify the decision to remove the reporting requirement due to the company not being equipped to obtain that information and the fact that such information is easily accessible by Corporation Commission Staff should they need it to perform their safety reviews. Commissioners and Safety Division Staff agree that the reporting requirement is an unnecessary burden on the railroad company and an inefficient use of its resources.
 
All documents related to this agenda item can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number RR-03639A-07-0610.
 
You may view the archived video of today’s Open Meeting at http://azcc.gov/live
 
 
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ABOUT US:

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.