APS parent company launches $1M campaign to support Corp Comm Republicans

Rachel Leingang//October 24, 2016

APS parent company launches $1M campaign to support Corp Comm Republicans

Rachel Leingang//October 24, 2016

Vector hand gives money bag to another hand.

The parent company of the state’s largest electric utility entered the Arizona Corporation Commission race, funding an outside group to support three Republican candidates for the regulatory body.

The Arizona Coalition for Reliable Electricity, an independent expenditure committee filed with the Secretary of State’s office on Oct. 21, will report receiving $1 million from Pinnacle West Capital Corp., the parent company of Arizona Public Service, the IE’s spokesman, Matthew Benson, told the Arizona Capitol Times.

Benson said the group will be spending money to help elect GOP candidates Bob Burns, Boyd Dunn and Andy Tobin.

The move marks a departure from Corp Comm conventions. In the past, regulated entities didn’t spend on commission elections. In 2014, more than $3 million in anonymous spending poured into the commission race to support then-candidates, now-commissioners Doug Little and Tom Forese. Many speculate the money came from APS or Pinnacle West, though the companies have not confirmed or denied any involvement.

The Arizona Coalition for Reliable Electricity is filed with the Secretary of State as a standard IE committee, meaning it will have to disclose the source of both income and expenditures. The 2014 spending was done primarily by two 501(c)(4) non-profits, which are not required to disclose the sources of their funding.

The Federal Bureau of Investigations confirmed in June that is investigating the financing of “certain statewide races in the 2014 election cycle.” Pinnacle West received two grand jury subpoenas related to the investigation, it said in an August filing.

The 2014 spending has been a focal point of this year’s campaign, particularly for Burns and Democrats Bill Mundell and Tom Chabin. Burns has been working for the past year and half to try to force APS and Pinnacle West to disclose any spending on the 2014 race. The utility sued Burns over subpoenas he issued calling for disclosure.

So far in the 2016 election, Save Our AZ Solar, an IE group backed by SolarCity, has spent more than $1 million to support Burns and Mundell through mailers and digital ads. SolarCity also about $2 million to back a since-abandoned ballot measure that would have protected solar net metering.

The Arizona Association of Realtors’ independent expenditure committee is also spending on the ACC race to back Burns, Dunn and Tobin, and has so far spent about $200,000.

In a statement, Pinnacle West said the spending by SolarCity has forced its hand, and the utility parent company’s involvement in the race is in response to the solar company’s electioneering.

Pinnacle West noted that SolarCity has “broken its written promise to stay out of ACC elections” and is now spending money to “protect its narrow interests.”

The move into election spending comes after APS and Pinnacle West CEO Don Brandt sent out an email to the company’s employees saying he would be voting for Burns, Dunn and Tobin. Brandt noted in his email that he knew his plan to vote for Burns was a surprise.

“We’ve certainly had our disagreements. But these three candidates would be far better for Arizona, for electricity customers, and for our ability to provide safe, reliable and affordable service while running our business well and earning a fair return for our shareholders,” Brandt wrote.

Benson said the Arizona Coalition for Reliable Electricity is spending on the election as a direct reaction to solar interests’ spending. He said Pinnacle West hadn’t intended to get involved in the Corp Comm race.

“If SolarCity going to spend millions of dollars to influence the Corporation Commission, Pinnacle West has an obligation … to make sure its interests are protected as well,” he said.

Benson said the committee believes energy isn’t a partisan issue, and the state needs a mix of reliable, affordable energy sources, including solar. The first influx of funds will be from Pinnacle West, but the group would be happy to receive money from any other parties to help its efforts, he said.

In its statement, Pinnacle West said it doesn’t think the two Democrats, Mundell and Chabin, could be impartial commissioners.

“All we have ever asked from ACC Commissioners is that they study the issues, consider the facts, weigh the long-term impacts on all stakeholders and decide fairly. Based on the steady flow of misleading anti-APS rhetoric from the candidates funded by SolarCity, it’s difficult to believe they could regulate APS or any utility impartially,” the statement says.

SolarCity’s director of public affairs, Will Craven, noted recent polling from Lincoln Strategies that showed voters most wanted the elected Corporation Commissioners to eliminate corruption and conflicts of interest.

“With all the scandal surrounding APS, it’s not surprising that they’re nervous,” Craven said.

Mundell and Chabin said in a statement that they aren’t surprised APS would be spending on the commission elections, despite the FBI’s investigation.

“Don Brandt and APS don’t want independent, objective commissioners. … He has created a culture of corruption at APS and the Corporation Commission,” Mundell said.

Chabin noted that APS is a regulated monopoly, meaning customers don’t have an option to get energy elsewhere.

“Every APS customer should be aware that a portion of the electricity bill they pay every month is going to be used by APS to elect hand-picked commissioners who will be puppets for the big utility companies,” Chabin said.

Kris Mayes, the chairman of Save Our AZ Solar, said she thinks APS is “desperate to defeat candidates who are pro-consumer and pro-solar,” like Mundell and Burns.

“APS has been attempting for the last year to undermine the ability of Arizonans to go solar, and this is just another example of that,” she said.

She said the fact that APS chose to disclose its spending is interesting and could mean they learned some lessons from any previous involvement in commission elections.

“It doesn’t make it any better. … I think every customer in APS’s service territory has a right to be outraged about this,” Mayes said.