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Arizona Supreme Court agrees to hear case of utility taken over by regulators

Arizona Supreme Court agrees to hear case of utility taken over by regulators

  • Updated

PHOENIX — The owners of Johnson Utilities will get a chance to argue that the takeover of the firm’s management by state regulators was illegal. The company serves about 35,000 customers in the Florence, Queen Creek and San Tan Valley areas.

In an order this week, the Arizona Supreme Court agreed to review a lower court ruling that concluded the Arizona Corporation Commission was within its power when it handed the day-to-day operations over to EPCOR, another utility, last year. The other company is still running Johnson Utilities.

Wednesday’s order does not mean that George Johnson and family members will regain control. But it does give him the best chance so far, as he and his company have been rebuffed in prior legal fights.

Potentially more significant, it sets the stage for the state’s high court to decide how much power regulators have to wrest control of an operating utility from its current owners, and over their objections.

The commission order followed a 14-day hearing last year which dealt with issues in operation of the utility, including low water pressure and leaking sewage.

Tied to that were questions of billing practices and whether the company was spending the money necessary to ensure safe and reliable operation.

That order allows Johnson Utilities to regain control of the water and wastewater company only after showing it “would not present an unreasonable risk of service.”

Attorneys for Johnson Utilities sued, contending only a court has the power to give control of the company to someone else, even on an interim basis.

Earlier this year, the Court of Appeals rejected that claim.

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