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Johnson Utility customers will not face immediate rate hike after pending sale

Johnson Utilities
Posted at 4:32 PM, Jan 27, 2021
and last updated 2021-01-27 20:16:57-05

SAN TAN VALLEY, AZ — Officials with the Arizona Corporation Commission and the Arizona Department of Environmental Quality have announced a series of settlements to address historic Johnson Utilities water and wastewater violations.

Johnson Utilities is a private utility company serving 62,000 water and 40,000 wastewater customers in Pinal County.

The news comes as EPCOR comes one step closer to becoming the new owners who will replace Johnson Utilities.

EPCOR was appointed as interim manager over Johnson Utilities after years of complaints from residents, and a long list of fines and violations from ADEQ. From raw sewage spills in neighborhoods, to bad odors, fluctuating water pressure, a big discrepancy in billing, and poor customer service, hundreds of residents have spoken out against the company during public meetings held over the last few years.

The settlement agreements reached between ADEQ and the ACC are conditioned on EPCOR's purchase of Johnson Utilities and include the following key elements:

-EPCOR and Johnson Utilities must contribute 30 percent, in no event greater than $21 Million of the cost of a new wastewater treatment facility within the Johnson Utilities Service area, with that contribution not to be passed on to utility customers.

-$10.3 Million dollars of eligible prior equipment expenses will be written-off by the utility and will not be included in the pending or future rate cases. This equates to roughly $22 Million that will not be paid by ratepayers over the life of the equipment.

-Land valued at about $15 Million will be contributed to EPCOR by Johnson Utilities and will not increase utility customer rates. Some portions of this land may be used to locate and or generate revenue for a new wastewater treatment plant.

-EPCOR will bring Johnson Utilities drinking water and wastewater facilities into compliance with all Arizona environmental regulations through a return to compliance plan.

Many in San Tan Valley are celebrating this pending sale calling it a new beginning for Pinal County, which is one of the fastest-growing communities in the nation right now.

Tisha Castillo, a Johnson Utilities customer said their utility company had cast a black cloud over the community and was relieved to hear they could finally move forward and look forward to growth in the area.

Pinal County Supervisor Mike Goodman said he fought so that customers would not have to pick up the bill for costs associated with improving infrastructure that still needs updated.

Customer Michael Cohen said, "it would have been unfair, unjust, and it would have been highway robbery."

Supervisor Goodman felt customers had paid for the improvements that needed to be made through their bills two to three times over. He questioned how Johnson Utilities had spent that money.

Lea Marquez Peterson, chairwoman of the Arizona Corporation Commission said she felt moving past Johnson Utilities was long overdue for residents in Pinal County.

"We're back in the business of economic development and growth. San Tan Valley residents can be assured health and safety is top of mind for us here at the Arizona Corporation Commission," added Marquez Peterson.

ABC15 has reached out to Johnson Utilities and EPCOR for a statement on this settlement agreement and will post their full statements here when we receive them.