ACC To Be Told Of The Takeover Of Public Utilities By Arizona’s Large Law Firms

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This Wednesday, March 22, at 10 a.m., 1200 West Washington Street in Phoenix, the Arizona Corporation Commission (ACC) will be holding an Open Meeting for Public Comment regarding the settlement in the Arizona Public Service Company (APS) rate case.

The agreement includes a rate hike of $6 per month for the average customer. APS filed its rate case in June. Thirty of the 40 parties, including Corporation Commission Staff and the Residential Utility Consumer Office (RUCO) agreed to the settlement terms .The agreement still requires a vote by the Commissioners. A vote will take place after public comment hearings and hearings before an Administrative Law Judge allowing stakeholders and interveners to weigh in on the settlement terms.

Arizona attorney, Jack Levine, who has worked over the years to educate the public on how excessive legal bills are causing a significant increase in electric and water bills, is expected to address the commissioners during the Call to the Public portion of the meeting.

On Monday, Levine released his address to the Commission in advance of the meeting:

Over a long period of time, two of Arizona’s largest law firms, Snell & Wilmer, and Jennings, Strouss & Salmon, have gradually taken over control of our state’s two largest public utilities, APS and SRP.  They have done this by placing their firm members, former firm members and relatives on their governing boards and executive offices, while at the same time serving as the attorneys and legal counsel for their respective public utility clients. During the time that these law firms were taking control of their public utility clients, two members of the Jennings, Strouss & Salmon law firm, Clarence J. Duncan and Gary L. Stuart, served consecutively as the State Bar’s Chief Ethics Counsel.

When a law firm controls a public utility’s governing board and executive offices, this results in the creation of a “captive client” who is powerless to make independent decisions concerning what law firm should represent them, what legal services they require and, most importantly for the utilities ratepayers, the size of the law firm’s legal bills. Not only is this an egregious ethical violation, but there is concern that excessive legal fees paid to these two law firms over the many years that these arrangements have existed may have amounted to billions of dollars. These payments have been largely buried in the utilities financial statements by the placement of these payments in the large multi-million construction and maintenance projects undertaken by the utilities.

Because of the potential control that the large law firms have as a voting bloc over the election of members to the State Bar’s Board of Governors, who oversee the State Bar’s staff, the Board of Governors and the State Bar staff have been reluctant to take action against the egregious ethical violations of these two large law firms in taking away their public utility clients’ essential right to control their legal affairs and how much they’re required to pay for legal services.

The Arizona Corporation Commission is the only hope that Arizona ratepayers have for protection against the predatory practices of these large law firms, whose excessive legal bills are causing a significant increase in our electric and water bills.

The public can file comments on line at www.azcc.gov and clicking Utilities Division. You can read the entire settlement agreement by going to eDocket and entering docket number E-01345A-16-0036.

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