Rural San Tan Valley area residents were left in a lurch late last month when a water utility shut off a standpipe they used to fill water tanks and hydrate their families, pets and homes.
Johnson Utilities turned off a standpipe at Magma Road and Edwards Street on July 30 without permission from the Arizona Corporation Commission. The company claims the standpipe was repeatedly vandalized and the cost to bring it back online wasn’t tenable.
According to the Corporation Commission, more than 200 customers relied on water from the standpipe. The next-closest one is 13 miles away in Florence, and another sits 17 miles away in Apache Junction.
“We have 202 people in the middle of August who are not able to get water conveniently,” Chairman Susan Bitter Smith said Aug. 18.
A standpipe is a freestanding water pipe that pumps water, typically in more rural areas, which people can use to fill up water tanks. The Magma Road standpipe serves a population that has large rural lots, many times with horses, that current water lines don’t reach.
At an Aug. 18 meeting of the Corporation Commission, people who rely on the standpipe service said going elsewhere for water added hours to their daily water retrieval schedule, and having water hauled to them cost too much to be feasible. One woman said she has already had animals die from the lack of water.
Johnson Utilities, headed by developer George Johnson, was providing water to customers at $2.49 per 1,000 gallons at the standpipe location. The utility told commissioners it cut off access to individual customers and most water haulers because the standpipe was out of order.
On July 24, Johnson put out a notice that it would be ending standpipe service permanently on Aug. 5. But on July 30, the company told the Corporation Commission it suspended service early because of vandalism, according to commission staff.
However, Johnson still allowed one water hauler, Roadrunner Transit, to access water from the utility and deliver it to customers in the area at a cost of $12 per 1,000 gallons. Johnson told the commission Roadrunner was one of Johnson Utilities’ contractors and wasn’t accessing water from the standpipe. He “leaned on them” to get a good rate for water delivery, but they weren’t affiliated with Johnson Utilities.
“They’re (owned by) my son and daughter. They have nothing to do with Johnson Utilities,” Johnson said.
Johnson said other companies have been charging $30 for 1,000 gallons.
The commission’s legal staff said allowing only one water hauling company to access a water supply and requiring a lower rate of $12 could raise antitrust and price-fixing issues. After a water hauler buys water from Johnson Utilities, it’s up the hauler to set the price for customers since water haulers operate in an unregulated market, the legal staff said.
One water hauler, San Tan Water Company, filed a complaint with the commission after it wasn’t allowed to access water at the standpipe. The company’s owner, Nick Myers, told the commission the battle with Johnson Utilities cost him his business.
Myers posted his water hauling truck for sale on Craigslist.
San Tan Water Company sent a petition to the commission with 233 signatures and 38 letters from customers asking the commission to bring the standpipe facility back in order.
Johnson Utilities said it started laying pipe to extend water lines to the homes themselves, taking away the need for a standpipe in the future. But in the interim, the commission directed Johnson to allow other water hauling companies, though not individual customers, to have access to water at a different facility.
The commission staff also will send one of its engineers to the standpipe facility to see if it’s inoperable and the extent of repairs needed to bring it back online, and update the commissioners on the standpipe’s status at an Aug. 27 staff meeting.
Johnson said he could have the extended water lines completed in three or four months, and repairing the standpipe in the interim would take two or three months. The standpipe was offline due to vandalism earlier this year for about two months and last year as well, but the commission didn’t receive complaints then and people were able to find other places to get water, Johnson told the commissioners.
“We’re doing everything possible to be a damn good provider of water. … Please be fair with us,” he said.
Tim Horn, owner of Tim Horn Cutting Horses, said he relied solely on the standpipe because the well at his property had gone dry. He commended Johnson Utilities for trying to solve the water issue by extending water lines in the future.
“Our life out here revolves around water,” Horn said.
Other residents who used the standpipe wrote to the commission pleading for the service to become available again.
“I am asking that you help us to keep this standpipe open, so that we, as a community, can survive. We are only asking for what is right and humane,” San Tan Valley resident John Yeary wrote.
TARIFF IN QUESTION
The Arizona Administrative Code requires water companies like Johnson Utilities to get the Corporation Commission’s permission before it can “discontinue or abandon any service currently in use by the public.”
However, Johnson Utilities said it doesn’t have a tariff or set rate for standpipe service and the standpipe was never intended for residential customers, so it did not need the commission’s approval before making the decision to shut it off.
The utility says the facility began in 2003, during a construction boom time, to provide water for builders and developers to use on their sites. But over time, people who didn’t have water service at their homes started using the standpipe for potable water, though that was never Johnson Utilities’ intention.
“A cottage industry has arisen around the standpipe where water haulers fill tank trailers and tank trucks and deliver potable water to customers for charges that are simply exorbitant,” the utility’s attorney, Jeff Crockett, wrote in an Aug. 13 filing.
The company’s rates were last reset in 2010, and the decision didn’t mention a standpipe tariff, though the company had a standpipe tariff prior to the 2010 decision and asked for it to continue. Commission staff said discontinuing the standpipe tariff appears to be an unintentional staff error.
“I don’t have a (standpipe) tariff, and I’ll go to the Supreme Court to prove that,” Johnson told the commission Aug. 18.
Commissioner Tom Forese said quibbling and arguing between commission staff and the utility over the procedural issues wouldn’t solve the interim problem of a lack of water for San Tan area residents.
“We need to make sure that the people that don’t have water have water as soon as possible,” Forese said.
Janet Wagner, the assistant director of the commission’s legal division, said statutes say a utility can’t abandon a service that people are using, regardless of the standpipe tariff issue.
“There doesn’t seem to be any question that (Johnson Utilities has) been providing this service for a significant period of time, and I don’t think there’s any question that people rely on this service,” Wagner said.
Bitter Smith said Johnson Utilities should have had a conversation and filed a petition before removing equipment or shutting off the standpipe service. As a public service corporation, the water utility has extra obligations to keep service consistent, she said.
“This is a process problem that’s troubling to me,” Bitter Smith said.