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2:34 AM Sat, Sept. 22nd

Judge won’t block regulators from seizing control of utility company

State utility regulator Andy Tobin' questions officials from Florence and Queen Creek Thursday about their offer to take over management of Johnson Utilities. (Capitol Media Services photo by Howard Fischer)

State utility regulator Andy Tobin' questions officials from Florence and Queen Creek Thursday about their offer to take over management of Johnson Utilities. (Capitol Media Services photo by Howard Fischer)

PHOENIX — A federal judge refused Thursday to block state utility regulators from seizing control of Johnson Utilities, at least for the time being.

In a brief order, Judge David Campbell concluded he does have the legal ability to consider the legal bid by George Johnson to stop in its tracks the move by the Arizona Corporation Commission to appoint an interim manager for the water and wastewater utility that services portions of Pinal County. That was not a given, as just a day before the judge said the failure to serve the commissioners with copies of the lawsuit, first filed Tuesday, raised questions of whether he had “personal jurisdiction’’ over them.

But Campbell, after a telephonic hearing Thursday afternoon, said he’s not yet convinced that he should issue a temporary restraining order to bar further commission consideration of the action.

Instead, the judge directed attorneys for the commission to file a response later today (eds: friday). And Campbell wants both sides to brief Judge Roslyn Silver, who will be taking over the case, on whether there is legal authority for the federal court to even get involved.

That move left the regulators free Thursday evening to direct commission staffers to proceed with its their recommendation to hire EPCOR, a private water and sewer company, for the interim manager role.

That decision, however, was not unanimous. Commissioners Andy Tobin and Justin Olson backed the joint proposal by the towns of Florence and Queen Creek.

“They actually had a price and a plan,’’ Tobin told Capitol Media Services after the meeting. Queen Creek city Attorney Scott Holcomb told regulators how the towns would link their current sewer and water systems into those of Johnson Utilities, improving service and reliability without the need to increase rates on customers.

But Robin Mitchell, the commission’s legal director, said there were potential pitfalls to having a private water company run by a pair of city governments. She said that would create a tension between the public officials’ obligations to their citizens and their obligations as managers of the utility.

Underlying the issue are a series of complaints by customers of the utility and others about poor service.

Just two weeks ago, a commission hearing officer recommended that the panel take control of the company and install its own interim manager. Sarah Harping said the company that provides water and sewer service for San Tan, Florence and Queen Creek area homes “has failed to provide service and equipment that is in all respects just, reasonable, safe, proper, adequate and sufficient.’’

Harping also said some of that is due to the failure of the company to spend the money necessary for repairs and equipment.