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ACC Gives APS Rate Increase

Sedona AZ (August 17, 2017) – The following is a letter to the SedonaEye.com editor:

ACC Gives APS a Rate Increase
Information & Perspective by Warren Woodward
Sedona, Arizona ~ August 17, 2017

          At their Open Meeting last Tuesday, the Arizona Corporation Commission (ACC) commissioners voted 4 to 1 to give APS a rate increase of about 4.5% on residential customers’ rates. Since all the commissioners were elected with major APS money spent on their campaigns, their votes were to be expected.

The ACC is tasked with the responsibility to protect AZ ratepayers by weighing the costs and benefits of all state utility requests.

The lone No vote was from commissioner Robert Burns. Burns has been in dispute, and Superior Court, with the other commissioners and APS over alleged money spent by APS two elections ago to get commissioners Little & Forese elected. As a commissioner, Burns has the legal right to examine APS’s books but he has been stonewalled for about 2 years.

Burns contends that because of APS’s influence, those two commissioners should have recused themselves. He wants the rate case done over. The issue hangs with the Superior Court judge hearing the case. You can read more about that here: http://azcapitoltimes.com/news/2017/08/15/arizona-corporation-commission-approves-aps-rate-hike/

I was of course at the meeting but I did not say much for 2 reasons. 1) Chairman Forsese said at the outset that the commissioners had read everything filed and so Intervenors should not just regurgitate everything we’ve already written. That of course did not stop others, and especially APS, from repeating their tired propaganda. 2) Since “smart” meters will be taken up at a separate meeting (at an as yet undetermined date) I didn’t have much to say anyway.

I did speak to the issue of forcing new customers on to demand/TOU rates for 90 days. I told the commissioners they had the constitutional and statutory authority to set rates but not to force people on rates. I told them by denying customers rates available to other customers they were discriminating (per A.R.S. § 40-334). I told them mandatory demand/TOU rates hurt those who can least afford it. I told them I never thought I’d see the day when Republicans engaged in social engineering like this. But they could not be swayed by shaming or by the law. They don’t care. It was clear their job was to rubber stamp the Settlement Agreement and give APS what it wanted.

ACC Commissioner Bob Burns

The meeting was like a “show trial.” It was a total farce. Despite Chairman Forese’s statement that the commissioners had read everything, commissioner (and former judge!) Dunn had to have APS’s rate transition period explained to him about 8 times. He also introduced some amendment about “bio-fuel” that even all the other commissioners were against because it was totally out of place in the rate case and already had its own docket. In short, poor Dunn was at sea.

Commissioner Little gushed how amazing the Settlement Agreement was because RUCO, the residential ratepayer advocate, had signed on to it. I guess Little missed the part in my testimony where I pointed out that RUCO does not represent residential ratepayers — even though they are supposed to — because 1) of the hundreds of public comments submitted to the docket, not one favored a rate increase or change to basic service charges. 2) No residential ratepayers expressed an interest in discriminating against new customers for 90 days. And 3) the head of RUCO admitted under oath that RUCO had not done any surveys whatsoever to determine what residential ratepayers actually wanted.

I could go on. There was so much self-congratulatory nonsense about how hard ACC Staff and the Administrative Law Judge had “worked” that I found myself looking for a barf bag. I rolled my eyes so much I practically got dizzy.

I wasn’t alone in my feelings about the meeting. Other Intervenors who were against the Settlement Agreement felt the same disgust.

As per usual after a day spent in the corrupt atmosphere of the ACC, when I got home I felt so psychically soiled I didn’t even want to keep wearing the same clothes I had on.

PS – Residents of Sun City and Sun City West: Despite all the many comments you made to the docket, your Intervenors sold you out and were in favor of the rate increase and Settlement Agreement. Time to trow da bums out.

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  1. Regulator sues to void rate increase says:

    Regulator sues to void rate increase approved for utility.

    By: Howard Fisher, Capitol Media Services, August 22, 2017, 4:40 pm

    Calling the process illegal, a utility regulator is asking the Arizona Supreme Court to void last week’s vote giving the state’s largest electric utility permission to immediately charge its customers an extra $7 a month.

    Bob Burns, on the losing end of the 4-1 vote for the rate hike, claims the process followed by his colleagues did not comply with statutory and constitutional requirements for a full airing of all the relevant issues. Specifically, Burns contends he was denied the opportunity to determine what influence that campaign contributions by Arizona Public Service had on the others and whether that tainted their vote.

    What all that means, he said is the high court must immediately void the rate increase as a violation of his rights and the constitutional duties of the other commissioners.

    Attorney Bill Richards, who is representing Burns, also wants the court to force the other commissioners to cooperate with his client’s investigation and to inform APS, parent company Pinnacle West Capital Corp., and CEO Don Brandt “that they are not excused from providing the information and testimony Commissioner Burns requires to address the bias and disqualification issues in the APS rate case.”

    Burns conceded there is no precedent for the legal relief he is seeking. But he told Capitol Media Services that the current political situation forces creation of one.

    “There hasn’t been interference or participation or whatever the proper term is of utilities in elections at the rate that APS decided to get into them up to this point,” he said.

    That includes the company’s admission it spent $4.2 million last year to elect a commission of its liking and questions about how much of $3.2 million filtered through “dark money” organizations that refuse to disclose their donors spent in the 2014 campaign came from the utility.

    The company has agreed to voluntarily disclose future spending — but not until months after the election is over.

    “So what good is that,” Burns asked. “We need to put some kind of transparency into the money the utility is spending.”

    He said this lawsuit — and any precedent set — is critical to providing voters and ratepayers information on how much utilities are spending to elect the people who regulate them.

    “As long as we have one person on the commission that believes it is necessary, and if the court agrees that one person has the authority to open up the books, we have a reporting system,” Burns said.

    There was no immediate response from commission Chairman Tom Forese. But APS spokesman Jim McDonald said the company will oppose what Burns is trying to get the court to do.

    Hanging in the balance is whether APS gets to keep the additional $7 million a month that it started collecting from customers this past Saturday.

    That rate hike followed the 4-1 vote by the commission approving an agreement involving APS, the commission’s own staff, the Residential Utility Consumer Office and most of the groups and individuals who had interceded in the case. That list includes companies that sell or lease solar panels to homeowners and businesses to generate their own electricity after the final deal blunted the financial impact on those customers.

    McDonald said the rate review, the company’s first in five years, is “a win for customers and will lead to many benefits.”

    Burns, however, said that the commission’s staff at one time concluded the company had shown no financial need to boost its income. But the larger issue, he said, is whether the other commissioners were beholden to APS.

    He pointed out that two groups spent $3.2 million in 2014 to elect Republicans Forese and Doug Little to the panel. Those groups have refused to disclose their donors, claiming their status under federal tax law as “social welfare organizations” allows them to keep it secret.

    Company officials will neither confirm or deny they are the source of those dollars. But Pinnacle West in a 2015 statement to shareholders, all but admitted it played a financial role in that race, saying that spending by solar leasing companies on behalf of “anti-APS” Democrat candidates caused the firm to “reevaluate” how it would protect what it said were its interests and those of its customers and shareholders in the political process.

    It was trying to get to the bottom of that 2014 spending Burns said, that led him to subpoena Brandt and company documents — the subpoenas that the other four commissioners quashed.

    Richards said that means the vote to let APS increase its rates took place before Burns had a chance to ascertain how much customer money APS and Pinnacle West spent to get a commission of its choosing, and how all that may have played out in the who voted for the rate increase.

    There is some legal basis for Burns to ask the Supreme Court to conclude that his rights as a utility regulator were violated, undermining the commission vote.

    In a 2016 formal opinion, Attorney General Mark Brnovich said Arizona law says individual commissioners and their employees may “at any time, inspect the accounts, books, papers and documents” of any regulated utility.

    Brnovich also said commissioners may examine utility company officers and employees under oath. And the scope of inquiry, he said, can include political contributions, charitable contributions and lobbying expenses.

    In rejecting Burns’ demand to question company executives and review their books to look for political donations, the other commissioners cited the “rule of necessity.”

    In essence, that rule says panel members with a conflict of interest need not recuse themselves if doing so would leave less than a quorum. That’s what would happen if four of the five commissioners — excluding Burns — were disqualified.

    But Richards charged that’s essentially putting the legal cart before the horse.

    He said it is Burns’ investigation that will determine if there are conflicts. And Richards said it might be that just two of the commissioners would be disqualified, still leaving a quorum.

    And there’s something else.

    Richards said the other commissioners cannot invoke the rule of necessity to block further investigation into the question of whether they have conflicts in the first place.

    “Arizona law entitles consumers and intervenors in the APS rate case to know all the facts about commissioner bias, even if were ultimately excused,” Richards said.


  2. Eddie Maddock says:

    Thanks, Warren, for continued updates and, in this case, maybe a ray of sunshine at the end of the tunnel.

    Wouldn’t it be wonderful if all state agencies, laws, statutes and other means of regulation including those pertaining to incorporated cities and towns were so prudently investigated? Good points listed in above report, many of which could easily apply to questionable ongoing practices relating to municipalities’ functions and restrictions. Transparency – a catchy little word, huh?

    Keep us posted.

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