PHOENIX — The Arizona Corporation Commission has refused to delay taking action on Johnson Utilities.
In a lengthy meeting Tuesday, the ACC discussed its ongoing investigation into the utility and the possibility of filing an order to show cause, and the potential appointment of an interim manager.
What began as a rate case, with the utility seeking to raise its rates for customers, has become a full blown investigation into billing issues, water quality, wastewater facility issues and related health and safety issues.
The commission directed staff to file an order to show cause no later than Thursday. That would be a court order that requires a subject, in this case Johnson Utilities, to justify or prove something in a hearing.
Chairman Tom Forese directed staff to include all items in the docket in the order to show cause, including the water quality and billing issues addressed in the public hearings and whether or not George Johnson has actually stopped acting as manager of the utility due to bribery allegations made against him and a former member of the commission.
Staff responded with what it could include depended on what witnesses with direct knowledge could be found to testify. Staff will have to draft an order to send to the commission for approval.
According to an ACC report on the investigation, staff engineers visited with Arizona Department of Environmental Quality personnel on Feb. 23 to inspect the water and wastewater systems. They found a host of what they describe as minor operation and maintenance issues and alerted the utility, which agreed to address them.
In the report, staff concluded that the continued odor complaints need further investigation and deferred to ADEQ, which recently contracted with Wetland Resources to conduct an air quality investigation.
The report also lists a history of 37 sanitary sewer overflows since January 2015 that the investigation turned up. Staff recommended that if the necessary water and wastewater system updates are not made by April 16, that the commission file an order to show cause so that it may appoint an interim manager for the utility at the following public meeting.
However, the commission decided to order staff to file the order to show cause by Thursday and decided to hold the hearing on March 29 at 10 a.m.
Johnson Utilities representative Jeff Crocket tried to extend the timeline and expressed his opposition to the order to show cause, citing a good track record of cooperation from the utility and arguing that the record does not support the order, calling into question the legitimacy of the complaints leveled at the utility in the public hearing.
“I’d remind the counsel that public comment is not testimony,” Crocket said. “We found many inaccuracies in what was stated in the public record.”
Crocket also cited recent water quality tests by ADEQ that show water that meets legal standards.
This drew sharp criticism from several commissioners, who clearly had the big picture of Johnson Utilities history and case in mind.
Forese questioned how he was to interpret the request for more time in light of the fact that Johnson Utilities had filed for an injunction against the commission that day that would require the ACC to respond in just a few days.
“Regarding the lawsuit today, I don’t know if the goal was to intimidate the commission,” Forese said. “You didn’t even know what the commission was going to do and you sued the commission. ... The very heart of expediting this is public outcry over the safety of the water. I think that’s justifying a shorter time line.”
Commissioner Andy Tobin, who appeared to be losing his patience with the utility at several points during the meeting and had suggested the commission move that day to appoint an interim manager, attacked Crocket’s suggestion that Johnson Utilities had a good record of cooperation, citing an earlier incident in which ADEQ officials were locked out of the gates when attempting to collect water samples.
“Clearly you can’t say you are just a wonderful actor who does everything that is asked for when you lock out a state agency that is assigned to protect the water of the citizens,” he said.
ADEQ officials questioned at the meeting said they had encountered no such obstacles in the current investigation.
The commission finally decided to give the utility the statute-recommended 10 days to file a response, and hold the hearing date at March 29.
“This has been going on for a long time,” said Commissioner Boyd Dunn. “You can probably guess what the complaint is going to say.”