For Immediate Release | 5-6-2021
Media Contact | Nick Debus
Direct | 602-542-0728
E-Mail | NDebus@azcc.gov
PHOENIX – The Arizona Corporation Commission held its monthly Open Meeting on May 4 and 5 to discuss and vote on various utilities and securities items. Highlights from the May Open Meeting are below:
Clean Energy Rules Fail to Advance
Commissioners on a 3-2 vote failed to pass an amended energy rules package at its May Open Meeting. Following a lengthy debate and discussion and the passing of several amendments to the rules, the overall package ended up failing on a final vote, with only Chairwoman Lea Márquez Peterson and Commissioner Jim O’Connor voting in favor of the amended rules package.
The Commission’s energy rules package was the result of over three years of work by Commissioners, Commission Staff, and a wide array of stakeholders that included regulated utilities, clean energy advocacy groups, and public health advocates. If passed, the amended Recommended Opinion and Order would have set a 100% carbon-free emissions goal by 2050.
Liberty Black Mountain Sewer Corp. Rate Increase Approved
Commissioners voted 4-1 to approve a rate increase for Liberty Black Mountain Sewer Corp. (Liberty). Liberty is a Class B water utility providing sewer service to approximately 2,210 customers primarily within the Town of Carefree, small portions of the City of Scottsdale, and in an unincorporated portion of Maricopa County.
Liberty filed its rate case pursuant to a directive in Decision No. 77510 from 2016 that required the company to close the Boulders Wastewater Treatment Plant near the Boulders Resort in Carefree, AZ, as it was found to be emitting offensive odors. A comprehensive settlement agreement between Liberty, the Commission, RUCO, the Boulders Resort, the Town of Carefree, and the Boulders Homeowner’s Association allowed for the plant to close ahead of its useful life and granted Liberty the ability to recover costs associated with the closure.
Three amendments offered by Commissioner Sandra D. Kennedy were adopted that removed three adjustor mechanisms from Liberty’s rate design. Overall, customers will see an approximate bill increase of $8.49, or 10.68 percent, from $79.50 to $87.99 per month.
Commission Orders Halt to Million-Dollar Promissory Note Scheme
and Restitution for Investors
The Corporation Commission issued a default order against David Miller, Jayson Papa and their affiliated companies for defrauding investors with a million-dollar promissory note scheme. Respondents were ordered to pay, jointly and severally, a $100,000 administrative penalty with each owing varying restitution amounts totaling $992,980.
The Commission found that Miller and Papa were the owners of Meroe Capital Group, Ltd, Castle International, Inc. and Castle Air Holdings, Inc. The Commission found Miller, Papa and their affiliated companies falsely represented Meroe and Miller as operating a Wall Street firm when Meroe was actually a one-man operation in Scottsdale with a virtual office in New York. The Commission found respondents fraudulently sold promissory notes to 11 investors, totaling $1,119,425. Investors have received a total of $259,445 in repayments.
The Commission found that the Miller and Papa induced people to invest by touting the investments as safe, risk-free with a guaranty without providing any financial documents necessary to assess these claims and without disclosing any of the risks of financial loss. Respondents failed to inform later investors that most of the previous investors had received, at most, a fraction of the promised payments of interest or principal.
Commission Finds Prescott Man Defrauded Investors
The Corporation Commission ordered former investment adviser representative Glen D. Hinshaw of Prescott and his affiliated company to pay $376,000 in restitution and a $15,000 administrative penalty for defrauding investors.
The Commission found that Hinshaw was the CEO of Resa Wearables, Inc., which was in the business of selling 3D-printed, custom insoles for shoes.
The Commission found Hinshaw and Resa Wearables raised capital by selling convertible notes and company stock to investors. The Commission found Hinshaw often solicited investors in Prescott with a slide show presentation about Resa Wearables and its
presence within large box retailers.
However, the Commission found Hinshaw and Resa Wearables failed to disclose a prior stipulated fraud judgment of $2.8 million against Hinshaw obtained by three of his former investment advisory clients. In settling this matter, the respondents neither admit nor deny the Commission’s findings, but agree to the entry of the consent order.