Phoenix, Ariz. —   The Arizona Corporation Commission voted on 29 matters, including securities, railroad, telecommunications, electric, and water items, in addition to one policy statement.  Highlights from the meeting include:

 Railroad

• Union Pacific Railroad Company
  

Securities

• Raymond James & Associates, Inc. et al.
• Timothy L. Wolf et al.
• Steven L. DeWitt aka Trevor Bloom and Christina DeWitt et al.
  

Utilities

• Citizens Telecommunications Company of the White Mountains, Inc. DBA Frontier Communication of the White Mountains
• The Estate of William R. Farr DBA Salome Water Company, et al.
• ACC Vote on Policy Statement Regarding Formula Rates
  
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Union Pacific Railroad Company - Union Pacific Railroad (“UPRR”) filed an application with the Commission for approval to modify an existing at-grade crossing at Ajo Way, DOT No. 741-295P; and to add tracks below the grade separated crossings at South Palo Verde Road and Alvernon Way in the City of Tucson.  The project will add three tracks to UPRR’s Tucson Yard—two siding tracks and a yard lead, which will facilitate moving and switching of railcars more efficiently, and will allow through trains to move through the Tucson area more efficiently. Pima County and UPRR entered into an agreement for traffic mitigation efforts during the Ajo Way at-grade crossing improvements. 

Raymond James & Associates, Inc. et al. (S-21333A-24-0245) - The ACC has joined a multi-state settlement with two financial services firms of Raymond James, which will pay $136,168 in restitution to investors and a $75,000 administrative penalty for failing to supervise the application of excessive minimum commission charges on equity transactions that harmed investors. The Commission found that in Arizona, Raymond James did not implement or maintain adequate compliance and supervisory systems to monitor 4,302 transactions which included an unreasonable commission for services performed for their clients. The settlement stems from an investigation spearheaded by state securities regulators in Alabama, California, Illinois, Massachusetts, Montana, and Washington through the North American Securities Administrators Association (NASAA).

Timothy L. Wolf et al (S-21192A-22-0118) – Timothy L. Wolf of Chandler and his affiliated company, Financial Concepts, LLC, have been ordered to pay $351,598 in restitution and a total of $50,000 administrative penalties for committing fraud in providing investment advice. The Commission found that Mr. Wolf and his affiliated company charged their clients hundreds of thousands of dollars for investment advice, however, they were not licensed to provide advice. Mr. Wolf and his company also deceived some investors by telling them that they could lawfully provide investment advice and by misleading investors about Mr. Wolf’s previous order banning him from the securities industry.

Steven L. DeWitt aka Trevor Bloom and Christina DeWitt et al (S-21296A-24-0051)- Steven L. DeWitt of Payson has been ordered to pay $6,590 in restitution and a $5,000 administrative penalty for committing securities fraud. The Commission found Mr. DeWitt created a fictitious CEO named “Trevor Bloom,” as well as fake employees for his fake business entity, “The Authentic Trader,” in effort to raise money for another fake business named “TAT Live.” DeWitt raised at least $20,250 from seven investors for TAT Live through Craigslist advertisements he placed for The Authentic Trader, which purported to offer trading education. However, within two months of the investors’ initial investments, DeWitt spent all of the investors’ money on personal and unrelated business expenses.  

 Citizens Telecommunications Company of the White Mountains, Inc. DBA Frontier Communication of the White Mountains (T-03214A-23-0250) - Frontier serves 15 rural exchanges and less than 9,000 access lines in the White Mountains region in eastern Arizona, including the communities of Show Low, Snowflake, Springerville, Heber, Pinetop, and Lakeside. The ACC and Frontier have entered into a Settlement Agreement which provides that Basic Residential and Basic Business Access Line Telecommunications Services will be offered pursuant to a Price Cap Rate structure.  The Commission approved the Settlement Agree, so within one year all other currently tariffed intrastate telecommunications services will be deregulated (unless determined that deregulation is not appropriate), and Frontier will charge the rates it determines to be appropriate, subject to any applicable legal requirements.  Before that time, Frontier will continue to charge its existing rates for services that will be deregulated, and existing terms and conditions will apply.

 The Estate of William R. Farr DBA Salome Water Company, et al. (W-0108-24-0115) – The Estate of William R. Farr (“WRF”) is a Class E water utility providing service to approximately 150 customers in an unincorporated area of La Paz County, Arizona known as Salome. In June 2023, WRF’s owner and operator died unexpectedly, leaving the Company without a properly certified operator, manager, field staff, or office staff. Stacy Brown, the sole heir and personal representative of Mr. Farr’s estate, has enlisted the assistance of James Downing, P.E. and Southwestern Utility Management (“Southwestern”) to operate WRF. Currently, WRF is not in compliance with the Arizona Department of Water Resources, has an open Notice of Violation with the Arizona Department of Environmental Quality, and is not in compliance with the Commission due to open compliance items from its 2017 emergency rate case and noncompliance with Commission requirements to submit annual reports. WRF is required to replace its storage tank, and the Company anticipates that one of its wells will run dry in six months. WRF lacks the cash flows to pay for necessary operational and administrative services and make improvements because it is currently insolvent.  ACC Staff described the company’s financials as “a disaster” and add that WRF had not filed and Annual Report since at least 1984. The Commission finds that this situation constitutes an “emergency” and it is in the public interest to approve the requested $14.50 surcharge to pay for operational and administrative services for no more than 24 months, as well as the requested $10.00 surcharge to service the $100,000 loan funding the Leased Well Pipeline Project. The Commission denied WIFA financing for the new well and storage tank within the context of this emergency rate case.  WRF is ordered to file a traditional rate case within six months, or may face an Order to Show Cause.

 Arizona Corporation Commission -Policy Statement Regarding Formula Rates - The Commission voted 3-2, with Commissioners Anna Tovar and Lea Marquez Peterson dissenting, to approve an amended version of the Arizona Corporation Commission Policy Statement Regarding Formula Rates.  The policy statement allows regulated utilities to propose formula rates in future rate cases.  Under this approach, the ACC reviews and accepts as the rate a formula for calculating the utility’s cost of service, including clear definitions of inputs to that formula and a process for updating rates every year as the utility’s costs change.  Formula rates will still be monitored closely to ensure that the utility does not overearn relative to the cost of service for providing service (plus a reasonable return on invested capital), while continuing to provide service safely and reliably.   The Policy Statement Regarding Formula Rates provides a new option to calculate a utility’s rate base that includes the use of a historical test year, and does not forego the current methods used in the determination of utility ratemaking.