The Town of Queen Creek has been on a systematic path over the last two years to take over Johnson Utilities service area near its borders by any means necessary, including through dubious business practices, misleading regulators and customers, and now outright poaching. Are these underhanded ploys a road to annexation?
As San Tan Valley commercial development grows, Queen Creek has made no secret of its interest in annexing the area despite the residents, opposition. However, the Town would need to acquire the right from Johnson Utilities to provide residents with water and wastewater services for a successful annexation, and the Town has no qualms about using underhanded tactics to do so.
In Court papers filed with the Maricopa County Superior Court in December of 2018, Johnson Utilities claims Queen Creek fraudulently approached it, and entered negotiations for a potential purchase in 2017, solely for the purpose of obtaining confidential business information. The Town has since used those private details in its years long attempt to devalue the company in the hopes of a condemnation action that would be far less expensive than an outright purchase.
After negotiations ended, the Town sought to hasten the devaluation of the Johnson Utilities by interfering with its business and operation, often utilizing misrepresentations of facts to its own benefit.
QUEEN CREEK INTERFERENCE WITH JOHNSON UTILITIES
- In 2018, the Town encouraged Johnson Utilities customers to ask the Arizona Corporation Commission to install an Interim Manager to operate Johnson Utilities. It then applied to be the Interim Manager, but the Arizona Corporation Commission denied the application citing, among other things, the obvious conflict of interest.
- The Town then pushed for an interconnect of services with the Company, citing unsubstantiated claims that the interconnect was necessary to service Johnson Utilities customers during the summer surge. In reality, an interconnect would allow Queen Creek to take over a revenue generating component of Johnson Utilities operations as well as allow it to begin servicing the area. In the meantime, the Town never came forward with any evidence that it had the ability to provide service to these additional customers.
- The Town held closed door private meetings encouraging land owners in an undeveloped Johnson service area to appeal to the ACC to remove them from the Johnson Utilities service area in favor of Queen Creek service. They also encouraged the Commission to delete a portion of the Company's Certificate of Convenience and Necessity (CC&N). The Town tried to become a party to the case, but the Commission disputed the claim that the Town was "representing the citizens in and outside its municipal boundaries" and denied the request. This did not deter the City from intervening.
- When the Town realized that the CC&N deletion procedure would require due process and time, Queen Creek - not the landowners - requested that the process be fast tracked to allow the Town to quickly take over service. The Commission denied the fast track, citing that all utility owners are afforded a fair process that will not be accelerated to accommodate impatience.
TOWN IS USING THE LEGISLATURE TO DO ITS DIRTY WORK
When the Commission denied fast track, Queen Creek decided to seek a change to state law that would allow them to take over Johnson service area by sidestepping the Commission, due process of law, and its own citizens.
The Town, with the sponsorship of Rep. T. J. Shope (R, San Tan Valley) introduced HB 2615, a bill that would allow the Town to sidestep current law in acquiring Johnson Utilities by eliminating the requirement that the Town obtain voter approval, but that would also circumvent the Corporation Commission's legal process as well.
Other private water companies, including Johnson Utilities' Interim Manager EPCOR, opposed the bill stating that there is already a process for CC&N deletions and municipal water company acquisition, and that this bill was just a "solution in search of a problem". The fact that those processes were not to the liking of Queen Creek was not sufficient reason to make statutory changes that protected utility ownership and rate payers.
Why is the Town of Queen Creek so bent on Johnson Utilities? There is an interim manager in place that is working hand in hand with Johnson Utilities ownership to continue the capital improvements and additional capacity that is the culmination of plans and investments made by Johnson Utilities prior to Arizona Corporation Commission involvement. The Town should let the citizens of San Tan Valley manage their own affairs and focus their attentions back on their own residents.BLOG COMMENTS POWERED BY DISQUS