ACC Staff Recommends Interim Manager to take over Johnson Utilities

ACC Staff Recommends Interim Manager to take over Johnson Utilities

On February 20 and 21, 2018, the Arizona Corporation Commission held public comment meetings in San Tan Valley regarding the Johnson Utilities Request for Rate Increase to Water and Wastewater services.

As a result of the public comments, Chairman Forese directed Staff to open a docket to address the water quality and bill complaints associated with Johnson Utilities.  At the Commission's February 22, 2018 Staff Open Meeting, the Commission directed Staff to conduct a site inspection and water/wastewater sampling of Johnson Utilities and prepare a report to bring before the Commission at its March Open Meeting.

On March 8, 2018, the Arizona Corporation Commission's Staff filed a memorandum and proposed order regarding the matter of the Commission's investigation of the billing and water quality issues of Johnson Utilities, LLC.  Based upon the information included in the Staff report, if the Company (Johnson Utilities) fails to make necessary water and wastewater system repairs and installations by April 16, 2018, Staff recommends that the Commission direct Staff to initiate an Order to Show Cause no later than April 20, 2018, in order to appoint an interim manager.

In addition, on March 6, 2018, Staff issued a Data Request to Johnson Utilities requesting any and all complaint data as it relates to Johnson's claim on possible leaks and possible theft of water by customer's neighbor. Staff intends to supplement its report based on the result of the billing investigation.

Commissioner Burns then filed this letter, on March 9, 2018 which in part reads:

After reading and considering the conclusions and recommendations contained in the Utilities Division's (Staff) memorandum of March 8, 2018, I am concerned with waiting until April 20,2018, for the Commission to possibly issue an Order to Show Cause ("OSC"). I believe that the process that would be initiated by issuing an OSC against Johnson Utilities, LLC should begin as soon as possible.

Commission Burns states that he shares Staff's concern that the "Company may lack the necessary managerial and technical capabilities to appropriately run the utility" and is asking the Commission to order a decision at their March 13, 2018 Open Meeting to Show Cause why the Commission should not order Staff to appoint an interim manager to manage Johnson Utilities, LLC and that said company shall provide its response to this Order to Show Cause by March 27, 2018.

The filing states that it is only a staff recommendation and has not yet become an order of the Commission, however the Commission can decided to accept, amend or reject Staff's proposed order.

This matter is schedule for Commission deliberation at its Open Meeting, March 13, 2018 and 10:00 a.m.