PHOENIX — The people of San Tan Valley came together and spoke out against Johnson Utilities, and the Arizona Corporation Commission heard their outcry.
The ACC unanimously approved an order to show cause, forcing Johnson Utilities to legally demonstrate why an interim manager should not be appointed to manage the utility in a hearing scheduled for March 29.
“It is clear we are where we are today because the public has spoken that there is a threat of public endangerment and growing concerns about billing practices,” said commission Chairman Tom Forese during Friday’s proceedings, citing February hearings held in San Tan Valley.
The ACC is forcing Johnson Utilities to defend itself on several counts — unreasonable service, inadequate managerial and planning capability, failure to maintain service, equipment and facilities that promote public health and safety, failure to handle the safe conduct and handling of sewage at the customers’ point of collection and failing to supply a satisfactory and reasonable level of service.
Key points in the order to show cause include allegations that owner George Johnson has not in fact stepped down as manager, as he was ordered to do in relation to a criminal charge of bribery.
The ACC received an anonymous tip that he continues to visit the Johnson Utilities office on a daily basis, which was confirmed by the company. The company did not deny that George Johnson continues to manage the business, according to the order to show cause.
There have been 530 customer service complaints formally filed with the ACC from Jan. 1 to March 2 on billing, quality of service and disconnection or termination of service.
The order to show cause also states that the number of sanitary sewage overflows in the last three years is excessive, and that the utility has continuously failed to bring its Section 11 wastewater treatment plant and Pecan Water Reclamation Plant into compliance with a host of operational and environmental regulations.
According to the order, this shows that the company lacks the managerial and technical expertise to run the utility and recommends that an interim manager be appointed. Staff also requested that the commission impose fines and penalties for these violations.
Pinal County Supervisor Mike Goodman, R-San Tan Valley, spoke during public comment and asked the commission to appoint an interim manager, accusing George Johnson of abusing the power granted to him by the water and sewage rights in Pinal County and the utility’s control of the marketplace. Goodman called Johnson one of the most powerful figures in the county, and maybe even the state.
Goodman also asked the Pinal County Board of Supervisors on March 14 to adopt a resolution to recommend that the ACC appoint an interim manager for Johnson Utilities, which the board will vote on at a future meeting.
Julie Phillips, of the steering committee behind the recent San Tan Valley incorporation effort, echoed Goodman’s sentiment that Johnson and the utility wield unchecked power in San Tan Valley, accusing Johnson of using his influence to strike down the succession of failed incorporation attempts,
“George Johnson has stood in the way of incorporation on numerous occasions,” Phillips said. “In the past he has used the municipalities surrounding us, now he’s using declarants (developers), threatening them with not being allowed to have sewer or water hookups. All the people of San Tan Valley want is to be able to control our destiny. I call him King George, my husband says we should have a tea party in San Tan Valley.”
Although a restraining order that was filed during a lunch break at Tuesday’s ACC open meeting was dropped, the commission expressed its certainty that Johnson Utilities would fight the appointment of an interim manager as aggressively as possible. Staff affirmed that they were confident that they could build a case strong enough to hold against any legal counterattack.
Johnson Utilities representatives Brad Cole and Gary Drummond were present but declined when asked to comment by the ACC.
The Corporation Commission staff order to show cause may be found in the commission’s online docket at http://edocket.azcc.gov under docket number WS-02987A-18-0050.
The hearing has been set for March 29 starting at 10 a.m. at the Corporation Commission, 1200 W. Washington St. in Phoenix.
Customers who have service, quality, and/or billing issues may request the right to intervene and provide testimony during the March 29 hearing. Information on how to intervene in a utility case can be found on the ACC website, http://azcc.gov, under “I Want To” and “Intervene in a Utility Case.”