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23 October 2018News

Utility panel is on the right path to regaining trust

Arizona Republic – August 24, 2018
Your Turn
By Justin Olson, Guest columnist

I arrived at the Commission at a time of significant challenges—and I have been part of the solution.

Governor Ducey appointed me to fill a vacancy on the Corporation Commission in October of last year. At the time, a former Commissioner had recently been indicted for allegedly accepting a bribe. This indictment came just a few short years after a different Commissioner was compelled to resign due to a conflict of interest. These events created a crisis of confidence in the Commission.

When Governor Ducey asked me to serve on the Commission, he explained to me that the number one priority he had in filling this position was to ensure that the position was filled by someone who he was confident would serve with the highest standards of ethics and integrity. I was very honored and humbled that in these circumstances the Governor turned to me.

Given these challenges, the decision to accept this appointment was not one that I made lightly. But I recognized that if I could restore even a small amount of public confidence in the Commission then that is work worth pursuing.

I accepted the Governor’s appointment, and I went to work. Over the last nine months, my efforts to rebuild the public confidence in the Commission have centered around three principle efforts:

  • Proposing Commission rules to increase accountability and transparency,
  • Providing appropriate oversight of utilities to ensure that the public services provided are safe and reliable,
  • And, most importantly, advocating for utility rate reductions.

ACCOUNTABILITIY AND TRANSPARENCY

Together with my fellow Commissioners, I voted to enact Arizona’s first-ever Commissioner’s Code of Ethics. I offered amendments to the Code of Ethics to prohibit all candidates for the Commission from accepting campaign contributions from entities that the Commission regulates. This proposal reflected the policy that I had already adopted for my campaign.

Additionally, my amendments to the Code of Ethics would have prohibited Commissioners from receiving food, travel or any other benefit that is funded by entities regulated by the Commission. I have continued to advocate for these important reforms that promote accountability and transparency.

INCREASED OVERSIGHT

Upon arriving at the Commission, I immediately began investigating the policies that were enacted under the cloud of the alleged bribery. I had read the reports of the previous Commission adopting a policy to allow the indicted utility owner to recover his individual income tax expense from ratepayers, but I was entirely unaware of the lack of proper management at his utility.

In late February, my fellow Commissioners and I attended a public comment session in the Johnson Utilities service territory. It became immediately clear to me that nowhere had the public confidence suffered more than it had in this area. While the utility owner was allegedly bribing a former Commissioner, the utility’s customers suffered from water pressure outages, foul odors, sewer system overflows and poor water quality.

On March 8, I submitted a letter to the Commission’s docket requesting that the Commission staff prepare an Order to Show Cause concerning the appointment of an interim manager for Johnson Utilities. The Commission adopted this order which began an extensive fact finding process. We held 13 days of evidentiary hearings including 27 witnesses and over 200 exhibits. The process culminated this week with the Commission voting to install new management at this troubled utility.

It is my sincere hope that this vote will be the first step toward rebuilding a safe and reliable water and wastewater system for the residents of San Tan Valley.

RATE REDUCTIONS

None of these accomplishments would be complete, though, without efforts to increase the affordability of our public services. When I arrived at the Commission last year, I heard many frustrations expressed by ratepayers impacted by the APS and EPCOR rate cases that were voted on shortly before I took office. I recognized a need to increase the affordability of our public services.

Protecting the ratepayer is my most important responsibility, and I take it very seriously. With an MBA in finance and years of experience analyzing public budgets, I comb through each rate case to look for potential rate savings.

Together with my fellow Commissioners, we reversed the previous Commission’s policy that allowed utility owners to recover their individual income tax expense from ratepayers.

After the Republicans in Congress passed monumental tax reform, I led the Commission’s efforts to require utilities to reduce their rates and pass their income tax savings on to ratepayers. APS ratepayers will pay $119 million less in rates this year as a result of these efforts. Reductions have also been enacted for customers of TEP, Southwest Gas, Arizona Water, EPCOR and many other companies. The total ratepayer savings will exceed $188 million annually and will continue to grow.

Rates are lower today than they were the day that I took office. I am very proud of this accomplishment, and I will continue my efforts to protect the ratepayer as long as I serve in this capacity.