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Former utility regulator calls on commissioner to stay clear of net metering vote

Corporation Commissioner Gary Pierce and former Corporation Commissioner Sandra Kennedy (File photos)

Corporation Commissioner Gary Pierce and former Corporation Commissioner Sandra Kennedy (File photos)

Former Arizona Corporation Commissioner Sandra Kennedy today called on Commissioner Gary Pierce to recuse himself from an upcoming vote on subsidies for rooftop solar panels, saying his ties to the energy company involved in the issue create a conflict of interest.

In a letter, Kennedy said numerous factors led her to believe that Pierce, a Republican, must not participate in a vote that could dramatically change the state’s net metering incentives for residential solar. Kennedy, a Democrat, lost her seat on the commission during last year’s election and will be running again in 2014.

Kennedy said in her letter that she believes Pierce has multiple connections to Arizona Public Service, vis-à-vis his 2012 corporation commission campaign, his son’s 2014 secretary of state campaign and business and political ties to a consultant who has worked with the utility.

“I find this chain of reported events deeply troubling. It sets a dangerous precedent for the Arizona Corporation Commission,’’ she wrote.

Late Wednesday, Pierce responded to Kennedy, saying he has a clear conscience on the issue and that he will not recuse himself.  Pierce called her accusations “scurrilous and unwarranted.”

At the center of Kennedy’s claims are media reports about the role an Arizona Public Service lobbyist played in organizing a fundraiser for Pierce’s son, Rep. Justin Pierce, a Mesa Republican who is running for secretary of state.

Wil Cardon, one of Justin Pierce’s Republican opponents, has accused the father and son of using Gary Pierce’s position as a corporation commissioner to gain support for Justin Pierce from groups with business before the Corporation Commission. Both Gary and Justin Pierce have denied the allegations.

Alan Heywood, Justin Pierce’s campaign consultant and spokesman, attempted to hide his involvement in coordinating a fundraiser with APS’s top lobbyist. He initially denied that the campaign played any role in planning the Oct. 16 fundraiser at the Phoenix Country Club and insisted he didn’t know why Arizona Public Service Director of Government Affairs Jessica Pacheco reserved the room on her country club membership.

The fundraiser marked the launch of the younger Pierce’s statewide campaign.

“I have no idea because I wasn’t involved with it. My only understanding is that, you know, we were having a fundraiser there and we went and did it,” he said in an Oct. 24 interview. He also told the Arizona Capitol Times that he didn’t think anybody from Pierce’s campaign coordinated with Pacheco.

But after APS said Pacheco did so at Heywood’s request, Heywood admitted that he might have spoken with her, though he maintained that he did not remember asking her to secure the space.

“If you want the truth… I don’t actually remember how it happened, but if it helps to put this to an end then, OK, I asked her to do it,” he told the Capitol Times in an Oct. 28 interview.

Heywood rejected any insinuation that anything inappropriate was done, and vigorously defended Pacheco’s involvement in Justin Pierce’s campaign, insisting it wasn’t unethical for her to set up the fundraiser because she didn’t pay for it. Instead, he said the campaign was directly billed the roughly $300 cost of the event.

Justin Pierce has since said he will use the state’s publicly financed campaign system, which means foregoing large contributions from APS employees. Outside independent expenditure committees, however, can still get involved in campaigning for him.

Pierce’s camp flatly denied any suggestion that he sought to capitalize on his father’s position as a regulator to get support from individuals and companies that do business with the Corporation Commission. His camp also shot back at Cardon, calling the insinuation “false and inaccurate” and said this was all part of the businessman’s “dirty campaign tricks and tactics.”

Kennedy told the Capitol Times that, after reading reports of APS’ possible involvement in raising campaign cash for Pierce’s son, she began thinking back to her time on the commission, and she reevaluated how she viewed the relationship between Pierce and APS’ lobbyists.

“I was very surprised to read those things. I guess that’s what made me start looking at some of the things that occurred,” Kennedy said, claiming that, “APS’ lobbyists would come and spend an awful lot of time in Commissioner Pierce’s office. We shared a wing of the office, so I would see who would come and go. They could have been there talking about their issues, but they weren’t there talking to me about those issues. Just an awful lot of time.”

In addition to what she described as conspicuous interactions between APS and Gary Pierce, Kennedy also cited his connection to Heywood, whom she believes may be working for APS. Heywood ran the campaigns of all five corporation commissioners.

In October, Heywood said he was unsure if he or any of his companies were doing work for APS, but he insisted that he was not doing any political work for the utility and had not spoken to “the vast majority” of the commissioners about issues important to APS.

An APS spokesman said in October that Heywood was not a consultant.

On his financial disclosure statement, Gary Pierce lists himself as a marketing consultant for Heywood’s company Americopy.

The issue before the Corporation Commission is solar net metering, a system that allows individuals to install rooftop solar panels to offset their energy consumption and to sell any excess energy back to APS. This is causing a cost shift, APS has argued, because the net metering customers avoid some infrastructure and maintenance costs, which they say have to be picked up by non-solar customers.

Neither Pierce nor Heywood returned phone calls seeking comment on Kennedy’s letter.

Sandra Kennedy’s letter


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