PHOENIX — State regulators have ordered a full rate case of San Tan Valley water provider Johnson Utilities, voiding the rate review ordered in June.
The decision Wednesday sets in stone a hard deadline to file the application. According to an Arizona Corporation Commission news release sent Wednesday afternoon, Johnson Utilities will be required to file its case by Dec. 31.
Staff of the regulatory agency concluded that “it is in the public interest” to modify a previous decision to only require a rate review of Johnson Utilities, according to a memorandum filed last week.
Originally, staff had recommended the filing by the start of November.
If representatives of the Scottsdale-based utility company fail to file by the specified date, the commission will determine whether to appoint an interim manager for the company.
Previously, commissioners had required a rate review of Johnson Utilities’ books and records, including those of its affiliates, subsidiaries and holding companies.
It is intended that the audit also include “an examination of the technical, managerial and financial stability” of the company, the release states.
According to an email previously sent to PinalCentral by Arizona Corporation Commission Communications Manager Angie Holdsworth, a full rate case allows “the commission to have the latitude to take any action deemed necessary. Actions such as rate adjustment (up or down), review the level of investment, review the company’s revenue and expenses, rate of return. The commission can order any compliance items as deemed necessary.”
A rate review, on the other hand, is just to inform the commissioners of the status of a company — in this case, Johnson Utilities — in terms of its particular issues at a given time, but the regulatory agency would be unable to make any adjustments to the rates no matter the outcome of the review.
Holdsworth said in a previous PinalCentral story that the staff report of the previously ordered rate review was due back by the end of September — per a 90-day deadline for the review determined at the June 13 meeting — possibly bringing it forward in an open meeting in October, but she couldn’t confirm that timeframe “for sure” at that time.
The commission’s release states that the decision to alter the rate case of Johnson Utilities is expected to save “significant expenses,” avoiding hiring outside consultants to conduct the audit.
The rate case approved Wednesday will now replace the review that was formerly put in place and is expected to provide a “more comprehensive understanding” of the condition of Johnson Utilities financially and managerially.