News Release

Arizona Corporation Commission November Open Meeting Highlights

For Immediate Release | 11-06-19

Media Contact | Nicole Capone

Direct | 602-542-0713

Email | ncapone@azcc.gov

Arizona Corporation Commission November Open Meeting Highlights

PHOENIX — The Arizona Corporation Commission today held its monthly Open Meeting to discuss and vote on various water, electric, gas and securities agenda items. Here is a brief recap of the meeting highlights.

Phoenix Pastor Admits to Unlawful Promissory Note Sales

The Arizona Corporation Commission ordered Pastor Teodoro M. Medellin of Phoenix to pay $18,000 in restitution and a $10,000 administrative penalty for fraudulently selling promissory notes to investors, most of whom were from Hispanic Christian communities.

The Arizona Corporation Commission found that Medellin convinced many of his fellow pastors at fellowship meetings to invest after touting the significant money he had made from investing in the promissory notes issued by Verdugo Enterprises, LLC, a company in the business of purchasing home decor products to fulfill online orders. However, the Arizona Corporation Commission found Medellin failed to inform investors about the company’s unwritten policy to limit payouts to $6,000 every two weeks, which is contrary to the explicit terms of the promissory notes.

Further, the Arizona Corporation Commission found Medellin failed to inform relevant investors that a portion of their money would pay the sales commissions that he and others received. Medellin was not registered to sell securities in Arizona.

In settling this matter, the respondent admitted to the Commission findings and agreed to 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-21064A-18-0402.

Arizona Public Service Company Approved for a Certificate of Environmental Compatibility Authorizing the Wildcat and Cyclone Transmission Line Project

The Arizona Corporation Commission approved Arizona Public Service Company’s Application for a Certificate of Environmental Compatibility Authorizing the Wildcat and Cyclone Transmission Line Project.

The project is being developed to serve two separate, but adjacent data center projects located northwest of the intersection of W. Broadway Road and S. Litchfield Road in Goodyear, referred to as the Wildcat Data Center and the Cyclone Data Center.

Approval of the Certificate of Environmental Compatibility authorizes Arizona Public Service to construct a new, 1.45 mile-long, single-circuit 230kV transmission line to the data centers from an existing transmission line, the Palm Valley Rudd 230kV transmission line, located approximately 0.30 to 0.35 miles south of the data center sites.

The project will aid the state and southwest region in meeting the need for an adequate, economical and reliable supply of electric power. The project will also aid the state in preserving a safe and reliable electric transmission system.

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 L-00000D-19-0196-00183.

Johnson Utilities, Update from Interim Manager

During an update from Johnson Utilities, LLC, the company’s Interim Manager, EPCOR, informed the Arizona Corporation Commission that all outstanding checks to vendors and contractors have been released and paid as of Friday, November 1. At the Commission’s last Open Meeting on October 29, 2019, EPCOR had communicated to the Commission that some checks were not being released and paid by the company’s owners.

Johnson Utilities is developing a finance plan to support a Capital Improvement Plan approved in Decision No. #77330. The company is also preparing for its rate case with an August 31, 2019 test year to be filed by December 31, 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 WS-02987A-18-0050 and WS-02987A-15-0284.

Oak Creek Public Service, LLC, Rate Increase Approved

Arizona Corporation Commissioners approved on a 4-1 vote new rates for Oak Creek Public Service, LLC. The increased rates will allow the utility to provide necessary infrastructure upgrades to continue providing safe and reliable water service to its customer base.

Oak Creek Public Service, LLC is a Class E public service corporation and serves approximately 250 customers in a residential subdivision, known as Lower Oak Creek Estates, near Cottonwood, Arizona.

Corporation Commission staff proposed to increase the company’s annual revenues by $25,562, a 32.32 percent increase over test year revenue. The Commission's final decision will result in an operating income of $14,187 and an annual cash flow of $22,426, providing an operating margin of 13.56 percent. Median-use residential customers will see an average increase in monthly rates of approximately $4.92, a 25.53 percent increase from current rates.

The Arizona Corporation Commission declined to implement an Emergency Repair and Replacement Surcharge sought by the company because the adjusted revenue margin that the company will see from the new rate structure will provide adequate operating margin to complete needed repairs and replacements in a timely manner.

The accompanying financing application sought approval to secure financing to provide infrastructure improvements across the system. The company seeks to install a 65,000-gallon storage tank, 24 mainline valve replacements, customer meter replacements, galvanized pipe replacements and a transfer switch for a generator hook-up. Residential customer bills could see an average monthly increase of approximately $8.36 as a result of these infrastructure upgrades.

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 W-01577A-19-0050 and W-01577A-19-0123.

A complete list of agenda items and a broadcast of the Commissioner’s November Open Meeting is available on the Corporation Commission’s website: http://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 Corporation Commission is Arizona’s co-equal, fourth branch of government. 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 http://azcc.gov.

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