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APS acts to quell concerns over consumer rate hike letter

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Arizona Public Service sought to quickly quash concerns last week that a letter submitted as a part of its request for a rate increase gave the appearance that dozens of government officials and nonprofit groups supported raising customers’ utility bills.

The utility company sent lawmakers talking points that claimed the media was drumming up a controversy at the request of solar surrogates and gave lawmakers suggestions on what to say if asked about the letter.

Though the letter itself simply advocates for a thoughtful process and limited outside rhetoric, some elected officials who signed the letter told Arizona Capitol Times that, by submitting it to the Arizona Corporation Commission docket for their requested rate hike, APS could give the impression the signers support a rate increase.

On May 24, a week before APS filed its request asking for an 8 percent monthly bill increase and a major change in rate design, the utility submitted the letter, which was signed by about 130 elected officials, nonprofits and chambers of commerce. The letter was also submitted by APS to a proceeding focused on the value and costs of solar energy.

Sen. Lynne Pancrazi, D-Yuma, said she would never have signed the letter if she’d known it would be submitted by APS as a part of the docket for their requested rate increase, which she doesn’t support. She blamed herself for not questioning APS lobbyist Chad Guzman about how the utility company intended to use it.

“I guess I just didn’t understand, or I didn’t ask the right questions,” Pancrazi told the Capitol Times on June 2. “It’s as much my fault as it is his.”

The letter itself doesn’t say much: It calls on Arizona Corporation Commission Chairman Doug Little and the commission to “thoughtfully consider” the proposals for changes to rates from utilities. Utilities are an important part of Arizona’s economy, the letter notes, and they do a good job helping communities and providing critical infrastructure.

“Like the Commission, utilities also are established energy and energy policy experts. Serious issues have been identified, like modernizing rates,” the letter says. “The Commission has always been above the fray providing serious consideration to critical matters facing our State. Unfortunately, rhetoric – not facts – has begun to cloud this complicated and important conversation.”

The utility is asking for an 8-percent increase to residential customers’ bills and adding demand charges to its rates, a controversial method of assessing rates based on peak usage during peak times. Critics say demand charges are confusing and punitive.

The eight state lawmakers who signed the APS letter are Democratic Sens. Robert Meza, Catherine Miranda and Pancrazi, and Reps. Richard Andrade and Ceci Velasquez; Republican Reps. Brenda Barton and Vince Leach and Sen. David Farnsworth.

Calls to Barton, Leach, Miranda and Velasquez weren’t returned.

Pancrazi described the information Guzman presented her in asking her to sign the letter as a “half-truth.”

“I wasn’t aware that it was for the rate hike. If I had known it was for the rate hike, I would not have signed off on it,” she said. “If I had known it was for an 8 percent rate hike, which now I do know, I would certainly not have signed on to this.”

Maricopa County Supervisor Steve Gallardo, who said he signed the letter about a month ago, told the Capitol Times on June 2 that APS was “disingenuous” in asking him to sign the letter. Though it doesn’t explicitly call for a rate hike, he said the appearance of submitting the letter to the rate increase docket clearly makes it seem as though those who signed it support APS proposed rate changes.

APS approached Gallardo more than a month ago and asked him to sign a letter, which he said called for a fair hearing.

“So, they took everyone’s letter, and they took our name and signature, and they put it on this other long one, and they attached it to the rate increase,” Gallardo said. “Not once have they asked for my support of the rate increase.”

He said the letter itself is innocent enough and doesn’t advocate for a position in the fight between APS and rooftop solar, and had the solar industry asked him to sign a similar letter, he would have. But Gallardo was furious that the letter was submitted as a part of the rate case docket, and said APS did not tell him that’s how it intended to use the letter he signed.

“I would never get involved in a utility, in a Corporation Commission hearing,” Gallardo said. “Don’t give the impression that I’m supporting a rate increase when I don’t. (APS) never mentioned it.”

Some signers of the letter had no problem with it, saying it simply advocates for a fair process focused on facts.

Meza said he signed the letter because he supports giving APS “an opportunity for a hearing. It needs to be addressed, either yay or nay.” He said the Corporation Commission is the appropriate venue for an open discussion, where the subject of a rate increase can be analyzed and questioned.

“I think that’s why the Arizona Corporation Commission was set up, to do that,” Meza said. “And also, what it does is it brings transparency to the whole situation.”

Maricopa County Supervisor Andy Kunasek said he hopes that corporation commissioners don’t read into his signature as a sign of some blind support for the rate increase. Though he didn’t know the letter would be submitted as a part of the request for a rate increase, he said he doesn’t object to APS’s actions.

“That’s their job, to objectively weigh all of the facts,” Kunasek said of the commissioners. “My bigger fear is the politicization on the solar side.”

The letter sent to the Corporation Commission by APS didn’t even mention rate increases, Andrade said in a written statement. He said he wouldn’t “condone any action that would negatively impact working families and especially low-income families.” All parties involved with the rate proposals at the Corporation Commission should move forward and focus on facts, not “deceiving rhetoric,” Andrade said in the statement.

He told the Capitol Times he was upset and surprised the letter was submitted by APS as part of the rate case docket. He said he was concerned about the appearance of where the utility submitted the letter.

But, he noted, the letter itself doesn’t condone any rate increases. He clarified the “deceiving rhetoric” was coming from SolarCity and other groups that say APS wants to kill solar, which he said he doesn’t believe is true.

Andrade said he wants the parties at the commission to listen to the public weigh in on the rate case and be transparent about the process, and that’s why he signed it.

“The two groups need to come together, settle their differences and find some common ground,” Andrade said.

After the Capitol Times began calling signers of the letter on June 2, APS started doing the same, to respond to what APS Vice President, State and Local Affairs Jessica Pacheco said appeared to be “misinformation” circulating about the letter.

An email from Arizona Public Service lobbyist Chad Guzman to Sen. Lynne Pancrazi shows talking points the utility sent out to lawmakers about a letter.

An email from Arizona Public Service lobbyist Chad Guzman to Sen. Lynne Pancrazi shows talking points the utility sent out to lawmakers about a letter.

The letter isn’t advocating for the rate case or against it, she said.

“Just as it’s written in the letter, we want the commission, and I believe the signators of the letter want the commission, to weigh out thoughtfully the different proposals they have in front of them and… make the best decision for Arizona,” Pacheco said.

She said her team spoke with the lawmakers who signed the letter, and all were fine with signing it and with it being submitted as part of the rate case. She specifically said APS spoke with Pancrazi and Gallardo after each spoke with Capitol Times about the letter, and that both of them understood what the letter said and agreed with it.

She encouraged the Capitol Times to contact the elected officials again to clear up any misunderstandings.

“What we’re actually trying to avoid is exactly this sort of rhetoric, distraction and noise that takes away from the very important policy conversations and policy positions that the ACC is debating and having,” she said.

Gallardo declined to speak again with the Capitol Times, but said through a spokesman that he supports an open process of reviewing the case before Corporation Commission. He also reiterated that he does not support APS’s proposed rate increase.

On June 6, Pancrazi said she had not spoken with APS because she was “too angry.” Pancrazi provided the Capitol Times with APS’s talking points concerning the letter, which Guzman sent to her June 3. The talking points state there is a “manufactured controversy” over the letter, which is “exactly the kind of distracting rhetoric the letter warns about and urges the commission to see past.”

Additionally, the talking points allege “SolarCity and their surrogates” directed the media to call those who signed the letter to “create drama that doesn’t exist.” The Capitol Times did not speak to anyone from SolarCity, its “surrogates” or anyone affiliated with the solar company or the solar industry about the letter before calling lawmakers about it.

Pancrazi said any assertion that she’d spoken with APS about the letter, and that she was fine having her name attached to it, is “baloney.”

“They’re trying to put lipstick on a pig. Period,” she said.

3 comments

  1. The lawmakers probably didn’t do any harm: has the ACC in recent times ever decided a case against the utilities and for the solar energy advocates? Ideally, the sneakiness of APS should draw a reprimand from the ACC and create a more critical atmosphere in the commission regarding APS’ other claims. It’s in ACC’s power to come off as local heroes or appear completely in the service of the utility shareholders. BTW, while watching the Weather Channel the other night, I learned that several states in the Midwest, exploiting the region’s high winds, are on the verge of producing and consuming more sustainable wind power than conventional fossil-fuel or nuclear-generated energy. If they can do that with wind, why can’t we with our solar radiation?

  2. I just got through attending a two-day conference on the pros and cons of electrical demand charges—and there were plenty of both. Interestingly, although the ACC legal team was well represented—and very much there to learn more—there were NO commissioners there, nor any of their assistants as far as I know. Also, no non-legal staff.

    The use of Demand Charges are somewhat complex, and new as a residential rate-setting tool. These charges are not “obviously” good or bad. They need to be understood so they can be intelligently discussed. Too bad our commissioners didn’t see the need to learn more about the concept.

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