If you are a member of the media, please email ngarcia@azcc.gov or call (602) 542-0728.
Phoenix, Ariz. — The Arizona Corporation Commissioners voted on 28 matters, including electric and water utilities, and securities items. Highlights from the meeting include:
UTILITIES
SECURITIES
Flagstaff Ranch Water Company, Inc. and Cactus State Utility Operating Company, LLC
The Commission declined to adopt the recommendation of the Administrative Law Judge to approve the sale of the utility assets of Flagstaff Ranch Water Company, Inc. to Cactus State Utility operating Company, LLC. The Commission referred the item to the Hearing Division for more fact-finding concerning the use of revenues received from cell tower leases for equipment attached to Flagstaff Ranch’s water tank and whether the cell towers are needed for 911 service.
All documents relating to this agenda item can be found in the Commission's online docket at edocket.azcc.gov and entering docket number WS-21155A-22-0324 and W-02502A-22-0324
Liberty Utilities (Litchfield Park Water & Sewer) Corp. CC&N Extension
The Commission approved the extension of Liberty Utilities (Litchfield Park Water & Sewer) Corp’s Certificate of Convenience and Necessity to provide wastewater service to service to the Palm Valley Apartments, a 300-unti multi-family residential rental development at the southwest corner of the intersection of Dysart Road and Glendale in Litchfield Park. The Palm Valley Apartments are currently be provided wastewater service from Luke Air Force base. Luke AFB will continue to provide service to the apartments until Liberty (Litchfield Park) completes the construction its new Sarival Wastewater Reclamation Facility.
All documents relating to this agenda item can be found in the Commission's online docket at edocket.azcc.gov and entering docket number SW-01428A-22-0084
Liberty Utilities (Litchfield Park Water & Sewer) Corp. and Valley Utilities Water Company, Inc. Transfer a Portion of Existing CC&N. – Pulled to a future Open Meeting
The Commission deferred to a future Open Meeting a decision on Liberty Utilities (Litchfield Park Water & Sewer) Corp.’s application to acquire a portion of the Certificate of Convenience and Necessity (“CC&N”) of Valley Utilities Water Company, Inc. to provide water utility service to a new development and to extend Liberty Litchfield Park’ sewer CC&N to the same area. The Commission wanted to receive the result of its Utilities Division Staff’s investigation into low water pressure complaints within Liberty Litchfield Park’s existing CC&N area.
All documents relating to this agenda item can be found in the Commission's online docket at edocket.azcc.gov and entering docket number W-01412A-23-0121, W-01427A-23-0121, and SW-01428A-23-0122
Sonoita Valley Water Company, Inc. Request for Rate Increase and Financing Authorization
The Commission approved a rate increase and request to borrow money form the Arizona Water Infrastructure Finance Authority (“WIFA”) for Sonoita Valley Water Company, Inc. (“Sonoita Valley”). Sonoita Valley serves 72 customers located 40 miles southeast of Tucson in Santa Cruz County. In the test year, Sonoita Valley experienced an operating loss of $41,745. The Commission approved a base rate revenue increase of $56,735 to be phased in over the next year. Phase 1 rates, that will become effective as of February 1, 2024, are expected to increase a median residential customer’s bill using 2,500 gallons a month by $35.06 from $48.08 to $83.14. Phase 2 rates are effective for service provided on and after February 1, 2025, would increase the median residential bill to $93.51, an increase of $45.98 over current bills. In addition, the Commission granted Sonoita Valley authority to borrow up to $396,124.80 from WIFA for the purpose of drilling a new well, adding storage, replacing aging meters and improving a booster station. Using the most conservative estimates of potential loan terms, the loan could add an addition surcharge on customers’ bills of $56.40. The loan surcharge will not become effective until the final loan terms are known and Sonoita Valley files a follow-up application to implement the loan surcharge. Sonoita Valley has not had a permanent rate case since 2010, but was approved an emergency surcharge in 2022, when it’s existing well suffered a drop in production capacity and the company needed to haul water to service its customers.
All documents relating to this agenda item can be found in the Commission's online docket at edocket.azcc.gov and entering docket number W-20435A-23-0156 and W-20435A-23-0214
Duncan Valley Electric Cooperative, Inc. – Gas Division Streamlined Rate Case Process
The Commission approved a rate increase for Duncan Valley Electric Cooperative Gas Division’s application pursuant to the Cooperative streamlined rate case process. The vote approved an approximate revenue increase of $27,501. Duncan Valley’s new rates would increase a residential customer’s bill, in the winter, by $0.83 per month, and increase a residential customer’s bill, in the summer, by $4.76 per month.
All documents relating to this agenda item can be found in the Commission's online docket at edocket.azcc.gov and entering docket number G-02528A-23-0256
Duncan Valley Electric Cooperative, Inc. Streamlined Rate Case Process
During the January Open Meeting, the Commission also approved a rate increase for Duncan Valley Electric Cooperative’s Electric Division pursuant to the Cooperative streamlined rate case process. The vote approved an approximate revenue increase of $173,587. Duncan Valley’s new electric rates would increase a residential customer’s bill with an average monthly usage of 798 kWh by $5.50.
All documents relating to this agenda item can be found in the Commission's online docket at edocket.azcc.gov and entering docket number E-01703A-23-0257
Arizona Public Service Company Notice of Intent to Increase Equity Interest from Pinnacle West Capital Corporation
The Commission voted to approve an application by Arizona Public Service Company to increase its equity interest from Pinnacle West Capital Corporation, APS’s holding company, pursuant to the Commission’s Affiliated Interests Rules. The authorization to increase equity by up to a total of $650 million ($500 million above the exempt amount of $150 million) will assist APS’s efforts in maintaining a balance of cost and financial risk in its capital structure while funding its capital expenditures.
All documents relating to this agenda item can be found in the Commission's online docket at edocket.azcc.gov and entering docket number E-01345A-23-0287
ACC – Utilities Division Five Year Review
The last item discussed during the January Open Meeting was the Utilities Division's memorandum, five-year review report, and proposed order in the Five-Year Rule Review process of Arizona Administrative Code Title 14, Chapter 2, Article 7 (the Resource Planning and Procurement Rules), Article 9 (the Customer-Owned Pay Telephone Rules), Article 18 (the Renewable Energy Standard and Tariff Rules), Article 24 (the Electric Energy Efficiency Rules), and Article 25 (the Gas Utility Energy Efficiency Rules). Staff recommended that all five Articles could potentially need to be modified therefore Staff recommended the Utilities Division be directed to open new rulemaking dockets (and begin the rulemaking process) for all these rules with the exception of Article 7 (the Resource Planning and Procurement Rules) which already has an existing open rulemaking docket so the rulemaking process could occur in that existing docket. The Commission voted 5-0 to approve the proposed order.
All documents relating to this agenda item can be found in the Commission's online docket at edocket.azcc.gov and entering docket number AUD-00000A-23-0142
Commission Sanctions Promoters of Investments in E-Commerce Businesses
The Commission ordered respondents Elevated Automations, LLC, Ecomelevation, LLC, Antonio Romero and Brandon Wasoski, both from New Jersey, to pay $672,079 in restitution and a total of $70,000 in administrative penalties for their roles in selling securities to investors in connection with an automated e-commerce business.
The Commission found that the respondents, along with Robert Halverson, offered and sold securities in the form of investment contracts or profit-sharing agreements to at least 51 investors, raising a total of $723,998. However, the securities offered and sold by respondents were not registered and none of the respondents were registered in Arizona as securities salesmen or dealers.
The Commission found Elevated Automations, LLC used an in-house sales team to contact potential investors from sales leads generated through social media, but found that Elevated Automations LLC, Ecomelevation LLC and Halverson failed to disclose to some of the investors that a portion of their investment funds would pay sales commissions. The original claimed purpose of Ecomelevation, LLC was for Halverson, Romero and Wasoski to teach people how to build online businesses through Shopify, but in actuality the investors did not have the discretion to choose the products to be sold, pick a store name, or set price points for the products.
The Commission found that Elevated Automations LLC and Ecomelevation LLC made misrepresentations of material facts and failed to disclose material facts, including misrepresenting that the e-commerce business would generate substantial daily revenue, when in fact, most of the prior investors did not receive the promised returns and the majority of these e-commerce businesses generated little to no revenue. Additionally, the Commission found Elevated Automations LLC and Ecomelevation, LLC failed to disclose to some of the investors that a portion of their investment funds would be used to pay settlement payment to prior investors or return payments to prior investors.
In settling this matter, the respondents neither admit nor deny the Commission’s findings and agree to the entry of the consent order. All of the respondents are required to pay the ordered restitution amount jointly and severally with Robert Halverson who entered into a separate consent order in this matter. 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-21216A-22-0315.
