APS admits spending $10.7 million in 2014 to elect two regulators of its choice

APS admits spending $10.7 million in 2014 to elect two regulators of its choice

PHOENIX — The state’s largest electric utility admitted late Friday that it spent $10.7 million in 2014 to elect two regulators of its choosing.

In a formal filing with the Arizona Corporation Commission, Barbara Lockwood, a vice president of Arizona Public Service, said nothing in state law requires her company to divulge the information. APS and its parent company, Pinnacle West Capital Corp., have fought prior subpoenas demanding the information, including by filing suit.

But Lockwood said the company has “hope of putting the past behind us.” She would not comment further.

That, however, is not the whole story.

APS and Pinnacle West for years fought efforts by Arizona Corporation Commissioner Bob Burns to force disclosure. They won in court when a judge said Burns, by himself, had only limited authority to issue and enforce subpoenas.

All that changed with the election this past November of Democrat Sandra Kennedy to the Corporation Commission.

She, along with Burns’ fellow Republican Boyd Dunn, who was not elected to the commission until 2016, also agreed to seek the information.

That gave the trio a working majority on the issue on the five-member panel, raising the likelihood that the commissioners could force the company to give up the documents.

The size of the spending admission surprised Burns.

Up until now, the only thing that was known was that two groups — the Arizona Free Enterprise Club and Save Our Future Now — had together reported spending $3.2 million to secure the election of Republicans Tom Forese and Doug Little to the panel of utility regulators.

The groups refused to disclose the source of their dollars, citing their status as “social welfare” organizations, which exempts them from some of the campaign finance laws that apply to others.

Until Friday, APS would neither confirm nor deny that any of that cash came from the utility or its parent company.

Friday’s filing shows that Pinnacle West gave nearly $5.9 million to the Free Enterprise Club in 2014. And it funneled another $3.5 million into Save Our Future Now, money the company says went to the commission race.

The company also reports giving nearly $1.4 million to the Arizona Cattle Feeders Association, money that a company spokeswoman said also was spent on the commission race.

Separately, Pinnacle West revealed it made political donations to other organizations in the 2014 campaign.

That includes $50,000 to the Republican Governors Association, which helped the first election of Gov. Doug Ducey; and $425,000 to the Republican Attorneys General Association, which in turn bought commercials to elect Republican Mark Brnovich.

That number surprised some of the utility regulators.

“Wow!” said Republican Commissioner Andy Tobin. “That takes me by surprise.”

Tobin said the disclosure — coming years after the election — underlines his desire to force regulated utilities to be more transparent about the money they spend.

Since the 2014 race, Pinnacle West has agreed to disclose what it gives to others who are spending money on campaigns. But that disclosure did not come until early the following year, after the election.

Burns said he would like to explore whether regulated utilities could be barred from spending money to elect their own regulators.

On one hand, he said, corporations do have the right to participate in the political process.

But he also pointed out that the commission has the authority to determine what is a reasonable rate of return on a utility’s investment.

And he said that Friday’s filing, which also disclosed what the company has been spending on lobbying, marketing, advertising and charitable contributions, could provide a basis for regulators to determine if the company is earning too much.

Little left the commission in 2017 to take a job in the Trump administration in the Department of Energy. Forese lost his re-election bid last year.

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