Opinion Piece By Amy Gerrish
The ACC has enough evidence to revoke Johnson Utilities CCN. A CCN is the certificate of necessity that gives them the opportunity to run this utility by the state of Arizona.
In 2003 they should have lost their CCN. It was on the ACC docket to vote about it. Instead, they were fined and it took the ACC 15 years to get back to the point of questioning JU’s ability to manage this utility to provide quality and safe service to the rate payers.
Today’s vote in favor of Epcor for an Interim Manager was absolutely mind boggling to me. If you have a train of thought that can help me understand it, please comment.
Epcor stated that they were NOT going to shut down Ultra Management. Ultra is an LLC owned by the Johson family that basically takes most of the cash flow that gets paid into the utility. What happens to that money is unclear. But, what is clear, is that it hasn’t gone back into the company for adequate infrastructure in both water & sewer management, or else we wouldn’t be here today voting on an interim manager (which should have really been a vote to revoke their CCN imho).
From what I hear, the ACC’s administrative law judge stated that more than 1/2 the revenues of Ultra go to enrich the lives of Chris & Barbara Johnson, rather than provide investment back into the infrastructure and operations. So basically, Ultra will continue to enrich Chris & Barbara and the new interim manager is “A-OK” with it, even if it does contradict the recommendations of the ACC’s law judge. .
The law judge stated that:
“At this time, it is necessary for the Commission to ensure that safeguards are established to prevent the continued enrichment of Johnson family members at the expense of JU ratepayers and to ensure that JU continues on its trajectory of improvement.” ACC Law Judge Recommendation PDF
Their 3-2 vote for Epcor, who blatantly told us all they weren’t going to get rid of Ultra, doesn’t align with the above goal.
Epcor stated that they DO NOT know how much it is going to cost the ratepayers to take over the management of the utility or to bring the utility up to a proper level. The ACC was apparently with giving Epcor free range to spend money.
Epcor stated that they REALLY HAVEN’T BEEN following the issues about Johnson Utilities and that they would need to spend a lot of time and money doing due diligence. The ACC was apparently ok with this too.
Unlike Epcor, the unified team of Queen Creek/Florence came to the hearing with a plan. They already know all of the issues with the utility because they already happen to have a due diligence report from when they were going to purchase the utility. Unlike Epcor, they knew how much it will cost, and could implement their plan right away to get the customers back to safe water and sewer services post haste.
I absolutely understand the political influence both Queen Creek and Florence have had on the incorporation efforts for San Tan Valley. I absolutely understand that the towns are not favored because of their motives. However, I just can’t see how the ACC voted for Epcor with zero plan. No estimated costs, nothing. Along with openly stating that they were ok with a shady Ultra sticking around. They also have a history of raising water rates and was in front of the ACC just last week about it: NoPhoNews.com. How exactly is Epcor the right decision??
So Johnson Utilities customers, will your rates go up? How long will it take to get JU up to speed with Epcor in charge? Is this just a back door way to get Epcor to invest in the infrastructure and then charge it back to the ratepayer so the Johnson’s can continue to receive their enrichment through Ultra? The Queen Creek/Florence team says there’s enough revenue to transition you safely onto their systems to get more water and adequate sewer without a rate hike.
Quote from Jeff Brown, Queen Creek Town Council Member:
- Interim Manger Appointment
On July 26, the Arizona Corporation Commission (ACC) approved (3-2) the appointment of EPCOR as the interim manager of Johnson Utilities.
- The ACC took the biggest and most important step by approving an interim manager. The Towns of Queen Creek and Florence are committed to working with EPCOR as the interim manager to help solve this regional health and safety issue. EPCOR is a highly capable and reputable company, and has experience working with the ACC.
- The towns collectively look forward to continuing to support a resolution for this regional issue.
- The public can review docketed items related to the case at edocket.azcc.gov by searching for docket number WS-02987A-18-0050
Please remember this statement, the towns are STILL offering to let the new interim manager hook up to their system for a very quick and low cost and solution for JU customers. Even if it is only a temporary solution while new infrastructure is being planned/built.