Arizona Corporation Commission Bob Burns addressed the recent failure of his fellow commissioners to support transparency at the public hearing over a proposed rate hike for Arizona Public Service customers during a rate hearing in Phoenix.
Each commissioner was offered the opportunity to make an opening statement at the hearing. While the other commissioners offered little but platitudes, Burns laid out his case for APS to reveal the beneficiaries of their campaign contributions in the 2014 election, and the battle he is in with the four other commissioners, who hope to thwart his efforts.
The Arizona Corporation Commission (ACC) regulates Arizona Public Service’s (APS) retail electric rates. The company has a vested interest in promoting candidates that would be utility friendly commissioners.
In August 2016, Burns filed subpoenas for the production of records and information relating to a range of expenditures from 2011 through 2016 by APS and its parent company Pinnacle West Capital Corp. “The subpoenas requested information concerning marketing and advertising expenditures, charitable donations, lobbying expenses, contributions to 501(c)(3) and (c)(4) nonprofits and political contributions,” according to an APS report.
APS has fought Burns every step of the way including suing him. The Commission paid Burns’ legal fees. When APS dropped its lawsuit in February 2017, Burns “opened a new ACC docket to study and rectify problems with transparency and disclosure,” according to the APS report. “Burns set March 24, 2017 as a deadline for APS to produce all information previously requested through the subpoenas.”
On March 14, the commissioners, in a 3-1 vote, fired Burns’ attorney and left him without a lawyer in his fight against the powerful utility company.
At Wednesday’s rate hearing, Burns said that his fellow commissioners showed a “level of disrespect for a commission officer” that he believed was “egregious and something that you, as the public need to know. “
“This is your commission, and we’re here to represent you. You have five elected state-wide officers and we each have the same level of responsibility and the same authority,” said Burns as he explained that the Commission chair Tom Forese forced the vote against Burns at the March 14 meeting. “The other members of this commission sat in silence while the chairman did this so I guess they condone this type of behavior.”
“Why would this be going on? The only thing I can figure is that they do not support my subpoenas of APS and the reason I subpoenaed APS is because APS as reported in 2016 election cycle spent something like $10 million on the election process and in 2014 they spent at least $3.2 million in the Corporation Commission races. I believe that the public needs to know. It’s your right to know. Now, nobody’s saying that there was anything illegal, but I think the public has a right to know how that money was spent.”
Burns then stated that despite the fact that his fellow commissioners want to block transparency efforts; his attorney informed him “that he is prepared to see this through and is working pro bono so the case will continue.”
According to the Daily Journal, “Bill Richards, Burns’ attorney, has so far been paid more than $15,000 by the commission.” APS is controlled by the Snell and Wilmer law firm according to attorney Jack Levine. Levine has been trying to expose the “captive client” relationship between the Snell and Wilmer law firm. He has argued that the unique relationship has caused an increase in utility costs.
Burns referred to his fellow commissioners when he pointedly told the audience, “When you come up to speak, realize now that these are the people who get to decide how much APS charges you for your electricity, and I look forward to your comments.”
Burns then listened attentively while his fellow commissioners kept their eyes averted from the stream of rate payers expressing their opposition to the proposed $6 monthly rate increase.
On Thursday, March 23rd, at 10:00 a.m., Burns is hosting a workshop to consider developing new transparency and disclosure rules. According to the notice:
The workshop will address financial expenditures by regulated monopolies, interveners, and stakeholders who may appear before the Commission who could directly or indirectly benefit an ACC candidate, sitting Commissioner, or key Commission Staff.
The purpose of the workshop is to receive comments and evaluate how to improve transparency, and may include discussions regarding the campaign and charitable contributions of regulated monopolies, interveners, and stakeholders. It will also consider other areas of potential conflicts of interest such as the employment of family or friends linked to a company or stakeholder and to the Commissioners or Staff.
The workshop will include a presentation from the Deputy Executive Director of the Campaign Legal Center which is a Washington D.C. based non-profit which focuses government ethics and promoting reforms which protect citizens’ rights to participate in the democratic system. The public will be allowed and encouraged to make comment and participate in the discussion.
The workshop will be held in Hearing Room One of the Arizona Corporation Commission at 1200 W. Washington, Phoenix. It will be live-streamed at www.azcc.gov. The entire docket can be viewed at the Commission’s website www.azcc.gov by going to eDocket and entering docket number RU-00000A-17-0035.
“We need to make sure that we have the highest ethical standards here at the Commission and that existing and potential future loopholes are not exploited,” said Burns in a press release. “This is an opportunity for all of us to explore any transparency or disclosure weaknesses that would undermine, in reality or perception, the integrity of this Commission, future Commissions and Staff.”
On Friday, March 17, Pinnacle West issued a report only detailing the money it spent in the last two years on political activity.
The company advised that it would continue its political activities. “Many factors guide our political contribution decisions,” read the Political Activity report. “In general, we may support candidates and organizations that share an interest in public policy that furthers our business objectives and promotes our mission of creating a sustainable energy future for Arizona. The Company’s contribution decisions are based on what is in the best interests of Pinnacle West and not based on the personal preferences of our executives.” Report highlights include:
In 2016, Pinnacle West made the following contributions to political parties, political action committees, candidates for political office and other entities organized and operating under section 527 of the Internal Revenue Code:
|AZ GOP (Arizona Republican Party)||$175,000|
|AZ Democratic Party||$60,000|
|AZ GOP Victory (Arizona Republican Party)||$410,000|
|Let’s Grow Virginia PAC||$6,000|
|Common Good, VA PAC||$5,000|
|AZ House Victory PAC||$5,000|
|AZ Senate Victory PAC||$5,000|
|Morning in Nevada PAC||$2,500|
|National LT Governors Association||$10,000|
|Senate Republican Leadership Fund||$15,000|
In 2016, Pinnacle West made the following payments to trade associations that may have been used for lobbying-related or other political activities as reported to us by the trade associations. These amounts are not permitted to be deducted as ordinary and necessary business expenses under the Internal Revenue Code:
|American Legislative Exchange Council||$10,000|
|Edison Electric Institute||$132,150|
|Nuclear Energy Institute||$17,306|
|Arizona Tax Research Association||$10,617|
In 2016, Pinnacle West made the following payments to entities organized under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code which may have used some of the proceeds for independent political expenditures, including but not limited to ballot initiatives, or lobbying-related or political campaign activities, as permitted by law:1
|Arizona Cattle Feeders Association2||$400,000|
|Market Freedom Alliance||$4,130,500|
|Expect More Arizona||$100,000|
|Republican Governor’s Association||$75,000|
|Arizona Free Enterprise Club||$50,000|
In 2016, Pinnacle West made the following independent political expenditures either directly or in support of an independent expenditure political action committee sponsored by the Company:
|Arizona Coalition for Reliable Electricity||$4,175,000|
|Arizonans for Responsible Drug Policy||$10,000|
|Arizona Grassroots Action PAC||$550,000|
|Yes on Prop 493||$2,500|