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Burns, APS argue to judge over opening utility’s books

(Deposit Photos/Tasha Tuvango)

(Deposit Photos/Tasha Tuvango)

The question of whether utility regulator Bob Burns gets to grill the top executive at Arizona Public Service and review the company’s political spending could turn on what a judge decides is the meaning of the word “and.”

What is clear is the Arizona Constitution spells out that “the Corporation Commission, and the several members thereof” have the power to “inspect and investigate” the books, methods and affairs of any corporation whose stock is sold in Arizona. That same section says that power extends “to enforce the attendance of witnesses and the production of evidence by subpoena.”

On Tuesday, Matthew Price, an attorney for APS, urged Maricopa County Superior Court Judge Daniel Kiley to read that as applying solely to the commission as a whole — at least by majority vote — and not

Bob Burns (Photo by Howard Fischer, Capitol Media Services)

Bob Burns (Photo by Howard Fischer, Capitol Media Services)

any individual commissioner. He said if the crafters of the Arizona Constitution wanted to empower individual commissioners, they would have used the word “or.”

But Bill Richards, who represents Burns, said that interpretation makes no sense.

He said if the constitutional right to demand records and issue subpoenas referred only to the entire commission, then there would be no need for the language mentioning the individual commissioners. And Richards said that’s not the way constitutional provisions are read.

What Kiley decides could do more than set precedent for whether any of the five individual commissioners have the right to ask questions that, as in this case, the other four have blocked after concluding they are irrelevant.

If the judge rules Burns does have that individual right, that would open the door for him to argue that his being denied that right voids the 4-1 vote earlier by the commission which allowed APS to get another $7 million a month from customers, including a 4.5 percent rate increase for residential customers.

Commission attorney Tim LaSota told Kiley that, if for no other reason than that, he should throw Burns’ lawsuit out of court. He said the vote has occurred, the rate hike was approved, and that Burns had his chance to object but was outvoted.

“It is majority rule,” LaSota said. “That is the end of the story, now and forever.”

What Burns is after are any records of spending by APS and parent Pinnacle West Capital Corp. on political races, lobbying and public relations.

He is particularly interested in finding out if the companies were the source of $3.2 million in spending by anonymous sources in the 2014 election to help secure the election of Republicans Tom Forese and Doug Little to the utility regulatory panel. A company spokesman will neither confirm nor deny its role in the race.

The company already has admitted it put another $4.2 million into last year’s campaign to defeat the two Democrats who were running.

Richardson told Kiley all that is crucial to why Burns wants his rights as an individual commissioner affirmed.

“They secured potentially the allegiance of a majority, with one extra vote to spare,” he said. “And that majority would have literally millions of reasons to prefer and favor APS over its customers.”

What Burns wants, Richardson said, is to look at whether the rate hike was justified. That includes whether Pinnacle West, which gets all of its money from the utility’s profits, is using dollars from customers who have no choice from whom they buy their power for things Burns contends they should not have to pay for, like political donations, lobbying and public relations.

Richardson told Kiley that the political spending of APS to elect candidates of their choice makes it all the more important that Burns gets to ask his questions.

“Having used their superior financial resources to capture the commission majority, the APS majorities have nothing to worry about the lone commissioner they didn’t capture whenever they seek a large rate increase like they did this past year,” he said. “The commissioners that owe APS something can simply, by majority vote, cut him off from any investigation that he wants to do, no matter how relevant the issues are.”

LaSota derided the whole contention.

“This business about regulatory capture, owning people, is pure fantasy that only exists in the plaintiff’s mind,” he told the judge. “It is detached from reality and, frankly, I think some of the comments have been way out of line in terms of the aspersions cast on the commission and the individual members.”

And LaSota said it’s not like the commission simply rubber stamped the APS rate hike. He said the final deal, which was for less than the utility sought, was agreed to by 29 of the 39 parties to the case, including the solar industry and the Residential Utility Consumer Office.

Price, for his part, told Kiley there are other reasons to reject Burns’ contention that he has a constitutional right as a member of the commission to demand documents from APS and Pinnacle West and to question CEO Don Brandt under oath. He said that would set a bad precedent.

“If he’s right about his theory, then a single commissioner would have the power to subpoena records and documents from any public company doing business in Arizona, even against the will of the commission as a whole, Apple, Google, you name it, and take it upon himself to act as an attorney general to investigate compliance with laws the commission has nothing to do with promulgating,” Price said.

Kiley gave no indication when he will rule.

 

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