JOHNSON UTILITIES L.L.C., an Arizona limited liability company, Petitioner,
ARIZONA CORPORATION COMMISSION; TOM FORESE, BOB BURNS, ANDY TOBIN, BOYD W. DUNN, and JUSTIN OLSON, in their official capacities as members of the Arizona Corporation Commission, Respondents.
Special Action - Arizona Corporation Commission No.
WS-02987A-18-0050 The Honorable Sarah N. Harping,
Administrative Law Judge
Fredenberg Beams, LLC, Phoenix By Daniel E. Fredenberg,
Christian CM Beams Crockett Law Group, PLLC, Phoenix By
Jeffrey W. Crocket Co-Counsel for Petitioner
Arizona Corporation Commission, Phoenix By Andrew M. Kvesic,
Maureen A. Scott, P. Robyn Poole Counsel for Respondents
Peter B. Swann delivered the opinion of the court, in which
Presiding Judge Kenton D. Jones and Judge David D. Weinzweig
Johnson Utilities L.L.C. seeks special action relief from the
Arizona Corporation Commission's order appointing a
third-party interim manager to conduct Johnson Utilities'
operations. It argues that the Commission lacks authority to
interfere with the internal management of a public service
corporation, and therefore that the Commission lacked
jurisdiction to issue the interim management order.
We accept jurisdiction but deny relief. Both the
Commission's broad ratemaking power under Ariz. Const.
art. 15, § 3, and its statutorily delegated power to
determine a "just" remedy for
"inadequate" public-utility equipment, facilities,
or services under A.R.S. § 40-321(A), provide the
Commission with sufficient authority to impose an interim
manager under appropriate circumstances. It is for the
superior court, however, to decide whether the circumstances
in this case supported the Commission's authority to
issue the interim management order.
AND PROCEDURAL HISTORY
Johnson Utilities is a public service corporation that
provides water and wastewater services in Pinal and Maricopa
Counties. In March 2018, the Commission held a 14-day hearing
regarding the adequacy of Johnson Utilities' operations
and issued a decision finding several significant concerns
with its billing practices and financial management, as well
as with the condition of its equipment and facilities.
Finding it "just and reasonable and in the public
interest," the Commission appointed EPCOR Water Arizona
(another water utility provider in the area) to "conduct
the business and affairs" of Johnson Utilities as an
interim manager. The Commission further ordered that Johnson
Utilities may apply for termination of the interim management
appointment with EPCOR "upon a showing that [Johnson
Utilities'] services . . . are in all respects just,
reasonable, safe, proper, adequate, and sufficient and that
terminating the [appointment] would not present an
unreasonable risk of service."
Johnson Utilities filed several actions protesting the
Commission's order, including three unsuccessful requests
to enjoin its enforcement. Johnson Utilities also filed a
"Statutory Special Action" with the Arizona Supreme
Court, and that court issued an order declining jurisdiction
"without prejudice to refile in the court of
appeals." Johnson Utilities now petitions this court for
special action review.
We issued a brief order accepting jurisdiction and denying
relief on September 21, 2018, noting that an opinion would
follow. This is that opinion.
We accepted special action jurisdiction because Johnson
Utilities' petition presents a purely legal issue of
immediate statewide importance. See Ariz. Corp.