Arizona Eagletarian

Arizona Eagletarian

Sunday, January 31, 2016

AZ Utility Regulator demands APS' financial data access

The book may be closed on Susan Bitter Smith, who resigned after being taken to court over her conflicts of interest, but the saga regarding Arizona Public Service, the largest IOU (investor-owned utility) in the state, continues.

Of course, Trash Burner Bob Stump was caught counting his chickens before they hatched last week but that's not the latest development. In the ongoing controversy over Dark Money spending in prior elections for Corporation Commissioner positions, Commissioner Bob Burns has now demanded disclosure of APS' election spending.

The panel of five commissioners is charged with the responsibility to protect captive ratepayers of investor-owned monopoly utilities. Bob Burns, elected to a four-year term in 2012, is the only remaining commissioner willing to challenge APS to disclose its election spending. He is up for re-election this year.

In November 2015, Burns requested APS voluntarily disclose the information. On December 30, CEO Don Brandt refused, in a letter stating that disclosure would "impinge on APS's 'First Amendment rights.'"

On Thursday, Burns wrote to Brandt demanding disclosure pursuant to A.R.S. § 40-241. The Yellow Sheet reported on Friday,
Burns said his demand letter to APS yesterday is just another step in his efforts to force disclosure of the utility’s spending habits. “We tried to be polite and got no response, so we had to go this route,” he told our reporter. In his letter, Burns said he is “concerned about the lack of transparency for all of APS’s below-the-line expenditures.”
Corp Comm spokeswoman Angie Holdsworth clarified that Burns is referring to “expenses that are not classified as ‘operating expenses’ that would not be recoverable from ratepayers.” Examples would include interest payments on a loan or charitable giving. Burns said he wants to make sure APS isn’t using funds that are supposed to go toward providing electricity to pay for other things, like political contributions and charitable donations. He said he’s trying to delineate exactly how APS and Pinnacle West are different, since they appear to share many of the same personnel.
“I’ve had this concern for some time about some of the expenditures and how they’re labeled,” Burns told our reporter. For example, he said he often sees APS headlining events, like sporting events, as a major donor. But he doesn’t think labeling APS as the donor makes sense. “It’s my belief that that shouldn’t say APS. It should say Pinnacle West and [the money] should be [from] Pinnacle West. APS is supposed to be the service arm of this system. They’re supposed to be providing power,” he said.
If the utility is using money for “good corporate citizenship,” such as through donations or sponsorships, that money should be coming from the rate of return that investors get, not from ratepayer funds designated to pay for operational costs. “The people that are paying their rates, writing checks to APS and have no choice in the matter, they see these big ads on billboards and stadiums, and I’m sure many of them don’t even realize that a number of these high-dollar events are being sponsored in part by what should be Pinnacle West,” Burns said.
He added that he’ll wait and see for the response to his letter, but if APS refuses to detail its expenditures, he believes the company would be breaking the law. “This is a state statute. This is a law. I think if they just come out and say no without any explanation, they would be in violation of the law,” he said
Burns seems to expect Brandt to extend this game of chicken.

Arizona Republic coverage this week can be viewed here and here. The second link is about a 16-page response from former Commissioners Bill Mundell and Renz Jennings filed on Friday supporting Burns plan to compel disclosure. Quoting from the 2010 Citizens United decision, the response says, in part,
The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages. (emphasis added by Mundell/Jennings)
It may also be helpful to note that former Arizona Supreme Court Chief Justice Thomas Zlaket, on September 17, 2015, filed a letter on behalf of The Alliance for Solar Choice (TASC) also in support of Corp Comm authority to compel disclosure of election spending by APS as well as PinWest.

Burns' letter closes by saying his office would be in contact with Brandt's to arrange for a "mutually convenient series of dates for the conduct of this investigation."

Stay Tuned.

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