News Release

January Open Meeting Highlights

For Immediate Release | 1-15-20
Media Contact | Nicole Capone
Direct |  602-542-0713
E-Mail | NCapone@azcc.gov

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

New Mexico Woman Admits to Defrauding Investors

The Corporation Commission ordered Kerease Margita Gillman of New Mexico to pay $315,000 in restitution and $50,000 in administrative penalties for committing securities fraud in connection with her Arizona limited liability companies. 

The Corporation Commission found Mrs. Gillman sold 20 unregistered investment contracts to investors who purchased shares in three entities—2009, 2010 and 2011 Arizona Acquisitions, LLC. The Corporation Commission found that Mrs. Gillman purchased some tax liens but used most of the investor capital contributions to pay for personal expenses unrelated to the three investment entities. Additionally, Mrs. Gillman was found to have falsely represented that she would dissolve the three investment entities after five years and distribute the proceeds to investors. To date, none of the investors—most of whom who live in Arizona—have received any return on their investment.

In settling this matter, Mrs. Gillman admitted to the Commission’s 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://edock t.azcc.gov and entering docket number S-21082A-19-0222.

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 the company’s cash on hand is building up, as of January 10, a little over $11 million was on hand, an increase of almost $1.5 million from last month when EPCOR stated that Johnson was anticipating upcoming cash flow challenges.

A new well in the Promenade 2 region is being drilled. This well can produce 1,800 gallons of water per minute. EPCOR reports that the water in this well does not require treatment. Completion of this project is expected in late spring of 2020.

The Section 11 Aeration Basin 2 is filled and operational. A significant reduction in odors has been observed through hydrogen sulfide loggers located around the community and no odors have been reported in nine weeks.

Customer satisfaction surveys have been conducted regarding Johnson’s level of care. Results show significant improvements in customer satisfaction. As of December 2019, 70 percent of customers reported satisfaction with the level of service being received, which is a 16 percent increase since December 2018. EPCOR will continue to analyze customer responses on a monthly basis.

Johnson Utilities is developing a finance plan to assure funding for the company’s Capital Improvement Plan approved in Decision No. #77330. Ongoing refinements to this plan continue to be evaluated. EPCOR as the company’s interim manager is also preparing for its rate case with an August 31, 2019 test year to be filed by February 14, 2020.

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.

APS Gives Rate Comparison Tool Update and Discusses Political Spending

During the December Open Meeting, APS stated that reliance by customers on the company’s rate comparison tool is believed to have caused about 10,000 customers to be placed on less-than optimal rate plans and to remedy this mistake the company would credit customers for the amount they overpaid as a result. As of January 14, APS stated that it distributed more than 7,000 customers a refund check along with a letter explaining the reason for the refund. The remaining 3,000 customers should get their refund checks in the next week or so.

Regarding customer service enhancements, APS told Commissioners that it implemented an outbound calling campaign and are mailing letters and postcards to customers to make sure they are on the most economical rate plan. APS has two community events planned in Sun City and Yuma. APS advisors will be present to answer questions regarding billing and will assist customers in setting up low income payment plans.

APS is still working with the Brattle Group, who assessed the probable impact on customer bills as a result of their reliance on the results of APS’s rate comparison tool.

APS is planning to launch its new rate comparison tool within the next week, however Commissioners asked staff to issue an RFP (request for proposal) to confirm the accuracy of the tool. APS will pay for this third-party investigation, it was made clear that this charge will not be expensed to APS customers, but instead to APS shareholders.

To end the meeting, Commissioners questioned APS CEO Jeff Guldner regarding APS’s involvement in supporting political campaign expenditures and the company’s general polices regarding political participation in elections and political spending. Chairman Burns began with a single question, "Will you make a commitment here today that Pinnacle West Capital Corp., or any of its affiliated companies including Arizona Public Service Co., will not participate in any way, shape or form in the election of Corporation Commissioners, including both the primary and general election process, as long as you hold the position you now hold?"

In response, Guldner said, "Today as chairman and CEO of both APS and Pinnacle West, I can say that under my leadership, Pinnacle West and APS, and any of our affiliates, will neither directly nor indirectly participate in any election of any Corporation Commissioner through either financial or in-kind support."

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-19-0003.

A complete list of agenda items and a broadcast of the Commissioner’s January 14, 2020 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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