PHOENIX – The Arizona Corporation Commission held its monthly Open Meeting on January 10^th, 2023, to discuss and vote on various utilities and securities items. Below are highlights from the meeting.

Arizona Public Service Company Power Supply Adjustment Surcharge

The Commission voted 3-2 to approve not resetting the Arizona Public Service Company (APS) Power Supply Adjustment (“PSA”) on February 1, 2023.  Commission Staff was ordered to analyze the APS PSA and provide recommendations by February 13, 2023, regarding possible modifications.

All documents related to this agenda item can be found in the Corporation Commission’s online docket at  https://edocket.azcc.gov and entering docket number E-01345A-22-0297.

Southwest Gas Corporation Rate Increase Approved

The Commission voted 4-1 to approve the application from Southwest Gas Corporation (SWG) for an increase in the retail natural gas utility service rates for service to SWG’s Arizona customers.  The Commission also approved the continuation of SWG’s existing rate design; modifications to SWG’s Low Income Ratepayer Assistance program that would increase eligibility for the discount, increase the timeframe for the discount, and streamline regulatory reporting; and inclusion of 12 months of post-test year plant.  Further, the Commission denied implementation of SWG’s Move2Zero Program and the proposals of intervenor Southwest Energy Efficiency Project, including implementation of a gas Infrastructure Investment Plan, elimination of construction allowances, and elimination of the Customer Owned Yard Lines program for non-LIRA customers.

SWG is a Class A utility that provides gas utility service across 10 counties in Arizona to approximately 1.1 million customers.

Chairman O’Connor’s amendment to share the cost of Director and Officer insurance between shareholders and ratepayers was adopted, as was Commissioner Marquez Peterson’s and Commissioner Myers’ amendments to share the costs of Board of Director fees and the Employee Education program, respectively.  Commissioner Tovar’s amendments to clarify the Recommended Order and Opinion were also adopted.

Under the approved rates, a single-family residential customer with an average annual usage of 24 therms will see a bill increase of $2.98, or 6.73%, from $44.28 to $47.26.

All documents related to this agenda item can be found in the Corporation Commission’s online docket at  https://edocket.azcc.gov and entering docket number G-01551A-21-0368.

California Law Firm Settles Commission Lawsuit, Pays $2.2 Million

The Arizona Corporation Commission settled a securities violation lawsuit with California-based law firm, Wilson Sonsini Goodrich and Rosati, PC with the firm agreeing pay to $2,206,998 in restitution to the Commission.

The Commission will distribute the funds to investors in two, start-up internet companies, Mobile Corp.and Quepasa Corp. Located in Arizona, Mobile and Quepasa had hired Wilson Sonsini to represent them.

On July 9, 2020, the Commission’s Securities Division filed an enforcement action against Mobile and Quepasa and the principals of those companies—Jeffrey Scott Peterson, Michael D. Silberman, Justin C. Billingsley and Wilson Sonsini.

The Commission’s Securities Division alleged that the respondents’ actions had violated the Arizona Securities Act. The Securities Division further alleged that Wilson Sonsini made, participated in and induced Mobile’s and Quepasa’s allegedly unlawful sales. Wilson Sonsini denies all wrongdoing and any liability.

While this settlement resolves the case against Wilson Sonsini, the Commission’s Securities Division continues to pursue its action against the remaining parties.

All documents relating to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S-21111A-20-0202.

Commission Sanctions Tucson Investment Adviser and Company for Dishonest and Unethical Conduct, Revokes Licenses

The Corporation Commission ordered Pamela Hopman of Tucson and PGH Advisors, LLC to pay $410,790 in restitution and a $35,000 administrative penalty for dishonest and unethical conduct. The Commission also revoked the investment adviser representative license of Pamela Hopman and the investment adviser license of her affiliated company, PGH Advisors, LLC.

The Commission found Hopman and PGH Advisors, LLC sold at least $1,562,392 worth of securities from a company called Deeproot and its affiliates to her advisory clients who believed they were buying life settlement products. The Securities and Exchange Commission has alleged Deeproot is a Ponzi scheme.

Additionally, the Commission found Hopman, PGH Advisors, LLC, and another PGH investment adviser representative sold at least $10,040,526 worth of unregistered securities from a company called Premier Global Corporation to PGH advisory clients. The Commission found the investors bought 12-month, unsecured promissory notes that accrued interest payable to the investor. The Oklahoma Department of Securities has alleged Premier Global Corporation is a Ponzi scheme.

The Commission found in most instances, Hopman and PGH Advisors, LLC did not inform the investors that she or her affiliates were receiving commissions for selling the unregistered investments.

Also, the Commission found the sales commissions paid to Hopman and her company created a conflict of interest between the clients' best interests and Hopman's self-interest in earning a sales commission. This material conflict impacts the providing of unbiased and objective investment advice.

In settling this matter, the respondents admit to the Commission’s findings and the entry of the consent order.

All documents relating to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S- 21198A-22-0162.

Commission Finds Peoria Insurance Producer Defrauded Investors

The Corporation Commission sanctioned insurance producer James David Gray of Peoria and his affiliated companies, Seek Insurance Services, LLC and Elite Business Group, LLC, for defrauding investors with a real estate Ponzi scheme.

The Commission ordered Gray and Seek Insurance Services, LLC pay $309,428 in restitution and an administrative penalty of $35,000 while Mr. Gray and Elite Business Group, LLC are required to pay $28,985 in restitution and a $35,000 administrative penalty.

The Commission found the respondents offered and sold unregistered securities and notes issued by companies controlled by EquiAlt, LLC to at least 17 investors, most of whom were not accredited investors. None of the respondents were registered to offer or sell securities in Arizona.

The Commission found the respondents, during the offer or sale of EquiAlt securities, made material misrepresentations and omissions to the investors regarding the securities’ risk and liquidity.

The Commission found Gray and his affiliated companies represented to investors that EquiAlt, LLC was raising capital to purchase, improve, lease, and dispose of distressed real property. In actuality, EquiAlt, LLC was operating as a nationwide Ponzi scheme.

In settling this matter, the respondents admit to the Commission’s findings and the entry of the consent order.

All documents relating to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S-21211A-22-0293.