PHOENIX — A judge on Wednesday rejected a bid by Arizona Public Service to let the Arizona Corporation Commission vote on the company’s rate hike request before he considers claims by one utility regulator that he has a right to question company executives about their political influence over the panel.
Utility attorney Mary O’Grady told Maricopa County Superior Court Judge Daniel Kiley that he cannot consider the legal bid by Bob Burns to subpoena APS officials until the pending rate case is completed. She said only after the commission acts on — and presumably approves — the deal in place involving 29 different parties can Burns contend he has a right to subpoena top utility officials.
But that would undermine Burns’ efforts to discover whether the utility, through its political spending on behalf of other commissioners, has improperly influenced them now that they are weighing how much more money to allow APS to collect from its customers.
Potentially more significant, it would keep Burns from discovering whether the other commissioners have conflicts of interest because of APS financial support, support that could preclude them from considering higher APS rates in the first place. The other commissioners have denied they have any conflict.
Bill Richards, the attorney for Burns, told Capitol Media Services that what O’Grady sought would make what Burns is trying to do meaningless.
“The harm that’s being done right now is that commissioner Burns is not being allowed to investigate something he has a right to investigate, the public has a right to know about,” all in connection with whether APS improperly influenced sitting commissioners, Richards said. He said putting off that legal question until after the rate case is complete means the harm already has been done.
“Now people are being charged if there’s a rate increase that’s been approved,” he explained.
“Now you’re sort of battling all that after the fact,” Richards continued. “It’s a little bit difficult to put the genie back in the bottle at that point.”
Kiley rebuffed O’Grady’s bid for delay.
The judge said the only reason he put Burns’ lawsuit seeking subpoenas on hold in May was to give the full commission a chance to consider his request. Kiley said once the other commissioners voted last month to block those subpoenas, there is no longer any reason to keep Burns from pursuing his lawsuit.
Kiley’s ruling comes as Burns is seeking to widen the case.
His original lawsuit sought only to compel officials from APS and parent company Pinnacle West Capital Corp. to provide documents and answer questions about their political, lobbying and charitable spending.
Now Burns wants to add the other four commissioners as defendants and get Kiley to rule that he has the right to call and question witnesses in the pending APS rate case — the case O’Grady wants resolved first — no matter what the other commissioners say.
Central to the issue are questions about who put $3.2 million into the 2014 race to help secure the election of Republicans Tom Forese and Doug Little.
The two organizations that did independent expenditures on their behalf contend their status as “social welfare” organizations under federal tax law means they need not disclose their donors.
APS officials will not confirm nor deny they were behind any of that money. So Burns wants to question them, under oath, about whether they used ratepayer-generated funds “to capture the allegiance or influence the actions or attitudes of commissioners or candidates,” with the ultimate goal of the utility to “unreasonably and improperly increase the cost of utility services to APS’s customers.”
In his latest pleadings, Burns said his concerns are more than pure speculation.
He pointed out that Pinnacle West, in a disclosure to the Securities and Exchange Commission, acknowledged it has received federal grand jury subpoenas that “seek information principally pertaining to the 2014 statewide general election races in Arizona for secretary of state and for positions on the ACC.” And those subpoenas seek records involving “certain Pinnacle West officers and employees,” including CEO Don Brandt.
Richards said Burns is entitled to ask questions, as just the risk of APS being pulled into a criminal investigation “creates material risks of economic instability” for the utility.
“Such disruptions can include the devotion of substantial executive time, worry and resources defending against a criminal investigation, or the disruptions that would obviously occur in management should such investigation result in criminal prosecution, and especially conviction, of any shared APS or Pinnacle West executives,” Richards wrote.
That leaves the legal question for Kiley: Can Burns issue — and enforce — his subpoenas.
Richards wants the judge to rule the subpoenas are “appropriate and lawful.”
He also wants the judge to say that Burns is not required to get authorization from any other commissioners or the panel as a whole.