On Tuesday, the Arizona Corporation Commission called for new management to lead a troubled Arizona water utility. With Commissioner Andy Tobin conspicuously absent, the vote was 4-1 to appoint an interim manager to assume operation of Johnson Utilities, LLC as soon as possible.
The Corporation Commission opened an investigation into the billing and water quality issues of Johnson Utilities through an emergency action earlier this year. The focus was an Order to Show Cause as to why an interim manager should not be appointed to guarantee the necessary technical and managerial experience to run a public utility. Following two days of six public comment sessions in San Tan Valley and a three-and-a-half-week hearing with 27 witnesses and more than 200 exhibits, an Administrative Law Judge issued a Recommended Opinion and Order. Today, Commissioners agreed with the order which called for the immediate commencement of efforts to obtain an agreement with an Interim Manager to run the company. This is the first time the Corporation Commission has called for an interim manager to run a large, Class A utility.
Johnson Utilities is an Arizona public service corporation that 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.
Commissioners proceeded to discuss candidates for the interim utility manager during Tuesday’s Special Open Meeting. Utilities Division Director Elijah Abinah outlined the process for selecting an interim manager to the Commissioners. Abinah stated his team contacted 22 potential candidates to gauge their interest and ability to manage Johnson Utilities.
The Commission received five responses, and four of those responses showed interest. Those included EPCOR, Global Water, Southwest Gas, and a joint proposal from the Towns of Florence and Queen Creek. Abinah stated all four respondents were qualified for the job, but recommended EPCOR as an interim manager based on the company’s technical, financial, and managerial expertise.
ACC staff was instructed to prepare final agreements for their review for both EPCOR and the Towns of Queen Creek and Florence by this Thursday, July 26.
On July 16, 2018, the company filed a motion to disqualify Commissioner Tobin suggesting he violated ex parte prohibitions. Tobin denies the claim. “I have consistently advocated for the due process of the customer, and I believe the company’s conduct throughout these proceedings only emphasizes Johnson Utilities’ perennial disservice to its customers and obstructionism,” Tobin stated in a letter to the docket.
Tobin claimed he did not attend the meeting because he would not “be complicit in the plight of Johnson Utilities’ customers by allowing the company or this Commission to further delay this matter over a petty legal tactic.”