SAN TAN VALLEY — Arizona Corporation Commission staff officially recommended the appointment of an interim manager for Johnson Utilities on Friday following the conclusion of an evidentiary hearing on the matter.
In his brief filed for the hearings, Johnson Utilities attorney Jeffrey Crockett argued that the commission does not have the authority to appoint an interim manager, and that if it did have the authority, the evidence in the case does not justify it.
The ACC staff disagreed, along with Arizona’s Residential Utility Consumer Office and intervener John Dantico. They have officially recommended the appointment of an interim manager for the Pinal County utility for a two-year period, or until the conclusion of the Johnson Utilities pending rate case, whichever is later.
“Staff asserts that Johnson Utilities, under prior management, and current management, poses a continued threat to the health and safety of the public and its customers,” the Arizona Corporation Commission staff writes. They also cite that the utility, along with affiliates Hunt Management and Ultra Management, had demonstrated a lack of financial managerial capabilities based on the agreements that funnel half of the utility’s revenue into subsidiary Ultra Management, owned by Chris and Barbara Johnson.
“Johnson Utilities is a poorly run, high risk operation that has escaped effective and sound regulation for far too long,” writes Chief Counsel for RUCO Daniel W. Pozefsky. “The hearing in this matter has made clear that local and state regulation to this point is fixated on compliance, and not enforcement, which has created a culture at Johnson Utilities of continuing, repeated, and frequent environmental violations with little or no consequences.”
A second round of response briefs will be filed on June 1. Then Administrative Law Judge Sarah Harping will write a recommended order. Later, a public meeting will be held where the ACC will make a final decision.