“Unnecessary, Economically Infeasible or Unworkable”

By San Tan Times Staff

With a 3 year improvement plan submitted from EPCOR to the ACC, Johnson Utilties submitted a docket on July 18, 2019 detailing their criticism and disagreement with the improvement plan. The Improvement plan is a 68 point improvement plan that highlights specific projects. In all, Johnson Utilities disagrees with 60 of the 68 proposed projects. The following is the company detailing their criticism, in their own words, that were submitted to the ACC.

“The Company’s criticisms of the three-year capital improvement plans fall into the following categories: (a) projects which are actually operation and maintenance items which do not belong in a capital improvement plan (totaling $2,665,000), (b) projects that will be funded by the developer and not Johnson Utilities (totaling $8,000,000); (c) projects that have already been completed (or are being completed this month) which have presumably been funded and, therefore, do not belong in the three-year capital improvement plan (totaling $2,2l5,000), (d) projects which Johnson Utilities opposes because they are unnecessary, economically infeasible or unworkable (totaling $4,350,000), (e) planned wells which will not be needed (or which have not been shown to be needed) to meet demand over the next three years (totaling $17,900,000); (f) projects which appear to be duplicated within the capital improvement plan, overstating the budget (totaling $5,050,000), (g) projects that are necessary but which have estimated costs that are believed by Johnson Utilities to be much too high (totaling $33,287,500), (h) water storage that is not needed to meet demand over the next three years (totaling $2,000,000), and (i) projects for which Johnson Utilities does not have enough information to determine whether the project is necessary (totaling $12,685,000).l Thus, out of the estimated costs totaling $l29,480,000, the cost of the three-year capital improvement plan may be overstated by more than $73,000,000.”

“Admittedly, there is much about the three-year capital improvement plan that Johnson Utilities does not understand. The point of these comments is not to advocate for a specific capital improvement budget, but rather to show that there are significant unresolved questions with the proposed three-year capital improvement plan which cannot be addressed with simple tweaks at the edges. This capital improvement plan is critical to Johnson Utilities and the parties should invest the additional time to produce a sound plan before it is approved by the Commission. Since the capital improvement plan was filed, the Company has sought an opportunity to work collaboratively with Staff and EPCOR to reach agreement on the plan, but that opportunity has not yet materialized. Johnson Utilities is still seeking an opportunity to address what are legitimate questions and concerns regarding the capital improvement plan before the Arizona Corporation Commission votes on that plan. Thus, Johnson Utilities renews the request it made on July 8, 2019 for a limited amount of additional time for the Company, Staff and EPCOR to meet in good faith to attempt to reach consensus on the capital improvement plan. Such an agreement on the capital improvement plan would be in the public interest.”

The Utility would like to meet “in good faith” after filling a lawsuit against EPCOR on May 31, 2019 and filling a restraining order against the Arizona Corporation Commission on July 11. Additionally it was made public that Johnson Utilities is calling Hunt Management employees to perform non-utility work during normal work hours causing employee availability problems for EPCOR.

View the full docket.