Thu, April 02

Regulator insists APS records key to whether commissioners should be allowed to vote on rate cases

PHOENIX -- State utility regulator Bob Burns wants a quick ruling on his bid to get records from Arizona Public Service to see if two of his colleagues should be barred from voting on the company's latest rate hike request.

William Richards, attorney for Bob Burns, said his client needs to know -- and soon -- whether Maricopa County Superior Court Judge James Blomo will grant his demand that APS and parent company Pinnacle West Capital Corp. disclose the money it spent in 2014 to try to affect the outcome of the Arizona Corporation Commission race. Burns also has issued subpoenas for information on donations, advertising and marketing.

The companies at first sued to block the move and then withdrew their objections, a move that resulted in Burns' colleagues refusing to continue to pay his legal fees. Undeterred, Burns filed his own lawsuit arguing he has a constitutional right to the information.

Mary O'Grady, attorney for the companies, responded by asking Blomo to dismiss the case. If nothing else, she said, the question of the validity of Burns' subpoena should be determined by the full commission.

Richards sniffed at that suggestion, saying that would "leave the issue to the very ACC commissioners whose disqualification may be required if the subpoenaed information is provided.''

But the bigger issue is whether Tom Forese and Doug Little, the two Republican commissioners elected in 2014 with the help of anonymous donations -- donations Burns believes came from Pinnacle West -- should be able to vote on the pending settlement.

Richards said the subpoenas and testimony Burns also is demanding from company executives will disclose whether the company engaged in any direct or indirect coordination with other commissioners' campaigns.

"And it will allow Commissioner Burns to exercise his constitutional duty to protect Arizona consumers and determine whether evidence mandating disqualification of any other commissioners exists before they vote on APS' rate request,'' the legal papers read.

Both Forese and Little repeatedly have denied they know anything about the ultimate source of the $3.2 million put into that race by the Free Enterprise Club and Save Our State Now. Both groups say their legal status as "social welfare'' organizations exempts them from Arizona laws compelling them to disclose their donors.

And Forese, now chairman of the five-member commission, told Capitol Media Services on Tuesday he knows of no legal reason that either he or Little would have to recuse themselves from any role in the pending APS rate case, even if it ultimately was shown that the utility was behind any of the cash.

But Burns is not just raising questions about Forese and Little.

He also noted APS publicly disclosed it put $4.2 million into last year's race in its bid to elect all three Republican contenders: Andy Tobin, Boyd Dunn -- and Burns himself.

"This publicly disclosed spending could equally justify disqualification ... particularly if the investigation reveals any evidence of even indirect coordination between APS/Pinnacle West operatives and their campaigns,'' his attorney wrote.

Forese said if that's true, then Burns himself should be disqualified because he was the beneficiary of some APS spending.

Burns, in his own legal filings, suggested APS purposely spent money on his behalf, "hoping to spark negative voter suspicions of hypocrisy'' of him benefiting from utility cash even as he was going after company records. Anyway, he said, it was more designed to prevent the election of Democrats Tom Chabin and Bill Mundell, people Burns said would have voted with him to enforce the APS subpoenas.

The more immediate issue is whether Blomo can rule on the legality of the subpoenas before the commission is slated to vote on the settlement APS negotiated with several participants in the rate case, potentially giving Burns a reason to argue Forese and Little should not be allowed to vote on the deal.

Forese dismissed Burns' latest filings as "a broken record strategy.''

"Instead of the focus being on how to best balance the scales on this rate case, he is ideologically and laser focused on injecting past politics into this process,'' he said.

In that pending rate case, APS had originally sought an $11 a month across-the-board increase. And it would have imposed significant new charges on customers who have installed rooftop solar to generate some of their own power.

The final deal "grandfathers'' existing solar customers, with various rate options for new solar users. And that rate hike has been trimmed to $6 a month.

That still leaves the unresolved question of the subpoenas.

O'Grady, in her own legal filings, told Blomo that Burns wants "public disclosure of information that now state law or commission rule requires a public service corporation or any other corporation to produce.''

Burns, however, contends individual commissioners have "broad investigatory powers, including subpoena and deposition powers'' which he said are necessary to fulfill their duties in setting utility rates and makes rules.

Anyway, he said, APS is effectively the only source of Pinnacle West revenues. And with that company having a targeted annual dividend growth of 5 percent, Burns said he needs to find out how much of what both APS and Pinnacle West are spending on political contributions, marketing, charitable contributions and lobbying to see how much of those expenses are effectively being covered through higher rates on utility customers.

On Twitter: @azcapmedia

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