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COCHISE COUNTY - As the ongoing struggle between John McLain - owner of seven local water companies - and the Arizona Corporation Commission continues, there will be a preliminary hearing on the commission's efforts to appoint an interim manager.
Attorney Jason Gellman of the commission will appear in Tucson before Judge Eileen Hollowell at the hearing, scheduled for 1:30 p.m. April 8 at U.S. Bankruptcy Court, 110 S. Church Ave., La Placita Monterrey Building, video courtroom 5-230.
If the court chooses to grant the commission's request for stay relief, it means the commission will be able to move forward with its plan to appoint an interim manager to run McLain's water companies.
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McLain was handed a blow by the commission last September when, after hearing a long list of noncompliance violations cited by Gellman, commissioners voted to appoint an interim operator to run his water companies.
The decision is considered one of the most drastic measures the commission takes against a public utility.
Within weeks of the commission's decision, McLain filed bankruptcy, a move that protected his companies from the interim manager appointment.
On Feb. 18, Gellman filed a motion to lift the U.S. Bankruptcy Court stay, an action that - if approved - would allow the commission to follow through with its decision to strip McLain's control of the companies.
Because of the types of noncompliance violations, the commission and Arizona Department of Environmental Quality are concerned about the health and well being of McLain's customers and want to appoint the interim manager as quickly as possible, the reason for Gellman's motion for stay relief.
According to court documents, ADEQ engineer John Chelus - who performed physical inspections on three of McLain's water companies and reviewed the service history of all seven utilities - found multiple violations.
"In my professional opinion, the water production, storage and distribution capabilities of the companies are not sufficient to meet the service needs of its customers," Chelus wrote in the court document. "The problems for the companies appear to have been ongoing for more than 10 years."
Chelus added that McLain has been unable to develop an appropriate plan for alleviating any of the problems with the systems of the companies.
After stating that all McLain's water systems are in noncompliance with the ADEQ water quality standards and state regulations, he recommended the interim manager be appointed to take over operation of the seven utilities.
He cited McLain's failure to provide adequate water service as a danger to public health and safety.
The commission wants to appoint Southwestern Utility Management Inc., owned by company President Ezra H. Lewis, as interim manager.
Familiar with the company and its owners, Chelus states, "I believe Southwestern possesses sufficient technical capability to plan and take the necessary steps to correct the companies' water production problems (if a solution is possible)."
Chelus also recommended the manager to explore all possible opportunities to ensure safe, adequate and reasonable water service for all the companies, including purchase of the assets of the companies by a fit and proper entity or entities.
TheSilverRose wrote on Jun 27, 2009 10:22 PM:
Thank You! "