For Immediate Release | 4-23-19      
  Media Contact | Holly Ward      
  Direct | 602-542-3847      
  E-Mail | hward@azcc.gov      
         
 

Arizona Corporation Commission April 23 Open Meeting Highlights

 
 
PHOENIX — The Arizona Corporation Commission Tuesday held the first of two days of its monthly Open Meeting. Commissioners discussed and voted on various water, electric, railroad, and securities agenda items. Here is a brief recap of Tuesday's meeting highlights:

Commission Approves the 2019 Grade Crossing Array Application

Commissioners approved the application by the Railroad Safety Division for its 2019 Grade Crossing Array application. This is an annual application by the Railroad Safety Division to make necessary safety upgrades to warning signals and crossings across the state. In consultation with the Federal Highway Administration and the Arizona Department of Transportation, five projects were identified for improvements. Under this approved application, signage upgrades will be installed at various locations within Cochise, Graham, and Gila Counties; surface upgrades will be installed to crossings in Pinal County; and signal equipment upgrades will be made to crossings within Maricopa and Pinal Counties. These warning signal and crossing upgrades will be added to the list of improvements approved in the 2018 array.

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 RR-00000E-19-0026.

Roderick Rickert and Titan Capital Real Estate Fund I, LLC

The Commission ordered Gilbert resident Roderick Rickert and his affiliated company to pay restitution and penalties for committing securities fraud in connection with real estate investments. Rickert is required to pay $4,765,771 in restitution and a $50,000 penalty while Titan Capital Real Estate Fund I, LLC is required to pay $3,026,315 and a $50,000 penalty. The Commission found respondents pooled investor funds from 33 people to lend money to real estate developers who were to purchase and "flip" residential properties. Rickert and his company, however, failed to inform investors that one of their key executives, Adam Child, had a prior judgment against him, had declared bankruptcy and had a license revocation of his prior mortgage-lending business. Additionally, the Commission found Rickert and his company co-mingled investor funds with money from other related companies that subsequently spent funds on unsecured development projects and overhead, which led to the failure of the business. In settling this matter, Rickert neither admitted nor denied the Commission's findings, but agreed to the entry of the consent order. For more details on this case, view the full text of the Commission's order S-21054A-18-0301.

Andrew Gamber, BAIC, Inc. and SoBell Corp

The Commission sanctioned Andrew Gamber of Arkansas and his affiliated companies for selling veterans' pensions and disability benefits to investors even though federal law expressly prohibits such sales. The Commission ordered Gamber, BAIC, Inc. and SoBell Corp to pay restitution totaling $2,684,099 and administrative penalties totaling $200,000. Gamber and his affiliated companies were found to have made multiple misrepresentations and omissions to investors, including that Gamber had numerous orders against him and/or his company for insurance and securities law violations. For more details on this case, view the full text of the Commission order S-21044A-18-0071.

Jeremy Diaz, IDIAZ, LLC and Wealth Creator Private Equity, LLC

The Commission ordered former Arizona securities salesman Jeremy Diaz and his affiliated companies to pay $339,521 in restitution and a $90,000 administrative penalty for fraudulently offering and selling unregistered securities and misappropriating the proceeds for personal use. The Commission found respondents Diaz, IDIAZ, LLC and Wealth Creator Private Equity, LLC sold investors a variety of unregistered securities, including investment contracts in oil and foreign currency, promissory notes and limited liability company membership units. Respondents were found to have made false and misleading statements and material omissions during this unlawful, investment sales activity. For more details on this case, view the full text of the Commission's order S-20983A-16-0299.

Joseph J. Carrillo and Partisan Alliance Corporation

The Commission issued a default order against a Phoenix man and his Gilbert-based company for fraudulently selling unregistered promissory notes to investors from the local Hispanic community. The Commission found that respondents Joseph J. Carrillo and Partisan Alliance Corporation misrepresented the investment returns on the promissory notes and failed to tell at least two investors that the company lacked adequate revenues to pay on the notes. The Commission ordered Carrillo and Partisan Alliance Corporation to pay $83,000 in restitution and a $20,000 administrative penalty. For more details on this case, view the full text of the Commission's order S-21067A-18-0416.

Jennifer Jean Gutschke and JG Enterprise, LLC

The Commission ordered Jennifer Jean Gutschke of Glendale and her affiliated company to pay $14,772 in restitution and a $5,000 administrative penalty for participating in the offer and sale of unregistered securities while not being registered as an Arizona securities salesman or dealer. The Commission found at least 20 investors were promised a return on their initial investment within three to six months, funding either the purchase of leads for prospective businesses that were interested in credit card reader terminals or for the purchase of the terminals that would be subsequently sold to interested businesses. The Commission found, however, that none of the investors received a full return of their original investment, and that Gutschke used some of the money to pay telemarketers for their work soliciting investor funds. In settling this matter, Gutschke and JG Enterprises, LLC neither admitted nor denied the Commission's findings, but agreed to the entry of the consent order. For more details on this case, view the full text of the Commission's order S-21059A-18-0345.

Johnson Utilities, LLC Interim Manager Update

Commissioners heard from EPCOR Water Arizona, Inc., the interim manager of Johnson Utilities, LLC in San Tan Valley. Representatives from EPCOR provided details on its finance, human resources, and operations efforts to restore reliable water and wastewater service to customers in the south east Valley.

One of the main discussion points centered around an interconnection agreement proposed by the Town of Queen Creek. The agreement was suggested as a way to provide more water for the Johnson Utilities system where it has encountered water pressure issues in the past. During Tuesday's meeting, EPCOR stated it believes it has and will have enough water for current customers over the summer.

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 WS-02987A-18-0050.

Citizen Complaint Against APS Moves Forward

Commissioners discussed local resident Stacey Champion's formal complaint against Arizona Public Service Company (APS) Tuesday afternoon. Chairman Bob Burns set the item on today's meeting agenda as a "discussion only" entry stating he wished to ensure the Commissioners had enough time to fully vet and discuss the matter before making a decision.

On January 3, 2018, Stacey Champion filed a complaint against APS alleging the utility rates approved in Decision 76295 were not just and reasonable because the residential bill impacts that resulted from the new rates approved in that decision were higher than the 4.54 percent average that was claimed in the settlement agreement that was ultimately approved by Commissioners in August 2017. Administrative Law Judge Jane Rodda presided over a public hearing on this matter September 25-October 1, 2018.

In her Recommended Opinion and Order presented to Commissioners for a vote, Judge Rodda determined the complaint should be dismissed with prejudice and the adequacy of its customer education and outreach program shall be considered and addressed in Docket No. E-0l345A-19-0003. Judge Rodda went further to recommend APS

  • identify those residential ratepayers whose bills have increased by more than 10 percent under the New Rates, based on 2015 Test Year determinants, and those ratepayers who are not on their most economical plan,
  • provide the most impacted ratepayers with targeted educational materials that (1) address how the most targeted ratepayers can manage their behavior with the goal of lowering their electric bills, and (2) explain any opportunities for the most impacted ratepayers to switch to their most economical plan,
  • produce a "bin analysis" to provide more meaningful notice of estimated bill impacts to customers and,
  • asked staff to reopen related dockets for the limited purpose of allowing Arizona Public Service Company's residential ratepayers an additional opportunity to switch rate plans. Judge Rodda presented an additional amendment for Commissioners to consider, ordering APS ratepayers be credited with $5 million that was originally allotted to fund outreach and education associated with APS's new rates approved in August 2017. Judge Rodda adds, ratepayers shall be held harmless from expenditures made by APS for targeted outreach and education in any future rate case.

Commissioners asked questions and discussed their thoughts on the matter Tuesday. A vote to either approve, amend, or deny the judge's Recommended Opinion and Order is expected during next month's Open Meeting May 22, 2019.

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-18-0002.

The April Open Meeting will continue on Wednesday, April 24, 2019, at 10 a.m.

A complete list of agenda items and a broadcast of the Commissioner's April Open Meeting is available on the Corporation Commission's website: https://www.azcc.gov/live.
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ABOUT US

The Arizona Corporation Commission was established by the state's constitution to regulate public utilities and business incorporation. The five Commissioners elected to the Corporation Commission oversee executive, legislative, and judicial proceedings on behalf of Arizonans when it comes to their water, electricity, telephone, and natural gas resources as well as the regulation of securities, pipeline, and railroad safety. To learn more about the Arizona Corporation Commission and its Commissioners, visit https://www.azcc.gov.