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APS admits spending millions in 2014 election of energy regulators

APS solar cover companies

The state’s largest electric utility admitted late Friday that it gave $10.7 million to organizations that spent heavily in the 2014 race for the Arizona Corporation Commission, which regulates energy companies.

In a formal filing with the commission, Barbara Lockwood, a vice president of Arizona Public Service, said nothing in state law requires her company to divulge the information.

But Lockwood said the company has “hope of putting the past behind us.”

APS and Pinnacle West, its parent company, for years fought efforts by regulator Bob Burns to force disclosure of spending in 2014. And they won in court when a judge said that Burns, by himself, had only limited authority to issue and enforce subpoenas.

All that changed, however, with the election this past November of Democrat Sandra Kennedy. Republican Boyd Dunn, who was not elected until 2016, also agreed to seek the information.

That gave the trio a working majority on this issue on the five-member panel, and it raised 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 – together reported spending $3.2 million to secure the election of Republicans Tom Forese and Doug Little.

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

That, however, is not all of it. The company 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 included $50,000 to the Republican Governor’s 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 $10.7 million number surprised some of the regulators.

“Wow!” said 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 with the money they are spending.

Since the 2014 race, Pinnacle West has agreed to disclose what it gives to others who are spending money on campaigns. But that disclosure does 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 the 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 a reasonable rate of return is on a corporation’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 U.S. Department of Energy. Forese lost his re-election bid last year.

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