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Commissioner Andy Tobin speaks with reporters after being sworn in as the state’s latest utility regulator at the Arizona Corporation Commission in Tucson on Tuesday, Feb. 2, 2016. (AP Photo/Ryan Van Velzer)
Gov. Doug Ducey on Thursday tapped former Republican congressional contender Lea Marquez Peterson to the agency that decides how much utilities can charge their customers.
The announcement came just moments after Ducey announced that Andy Tobin, currently serving on the Arizona Corporation Commission, will leave that agency to become the head of the state Department of Administration. That is the agency that handles internal matters for the state, like payroll and managing office space.
Marquez Peterson, who formerly was president of the Tucson Hispanic Chamber of Commerce, will fill out the balance of Tobin’s term, which runs through 2020.
The announcement comes at a particularly critical time at the commission, which is looking at whether Arizona Public Service, the state’s largest electric utility, is earning too much, particularly after the regulators gave the go ahead in 2017 for the company to collect another $95 million from customers.
Commissioners voted earlier this month not to reopen that rate case. In fact on Thursday, just hours after Tobin resigned, the commission voted to push ahead with a plan to have APS file a new rate case, using 2018 as the test year, to determine if the charges being imposed are too high and should be scaled back.
That followed disclosure a month ago that Pinnacle West Capital Corp., the parent company of APS, reported profits in the first three months of 2019 of $17.9 million, versus $3.2 million for the same period a year ago.
Pinnacle West gave Marquez Peterson $2,500 in the Republican primary last year. Marquez Peterson’s congressional campaign also was the beneficiary of $5,000 from David Hutchens, chief executive of Tucson Electric Power, and $350 from TEP lobbyist Steve Eddy.
Lea Marquez Peterson at the inauguration of Gov. Doug Ducey on Jan. 7, 2019.
But she told Capitol Media Services those donations are different than the money that APS funneled into commission races in 2014 and 2016 to help elect regulators of their choice.
“That was an entirely different race, a different position, representing a district in southern Arizona,” Marquez Peterson said. “So I consider that completely separate from a role at the Arizona Corporation Commission.”
“I had many different citizens and businesses and others support me in my race for Congress,” she said. “And I don’t think that made be beholden to anyone in particular.”
The Tucson Hispanic Chamber, under her leadership, took a position last year against an initiative that would have required utilities like APS and TEP to generate half of their electricity from renewable sources. But Marquez Peterson, noting other business groups also opposed the measure, said that does not necessarily align her with the interests of the utilities.
“The reason … was the dramatic impact it would have on the cost for small business to do business in the state of Arizona,” she said, calling the renewable energy goal “too fast of an increase and too short of a time period.”
The defeat of that measure kept in place the current commission-established standards that require regulated utilities to generate 15 percent of their electricity from renewable sources by 2025.
Marquez Peterson said she has taken no position on the question of whether APS is earning too much.
Ducey has proven himself an ally of APS.
Last year the governor signed legislation, crafted by APS, to protect utilities if voters had approved the initiative.
Strictly speaking, the measure Ducey signed would not have overruled the constitutional amendment in the initiative which would have directed the commission to enact rules with a new energy mandate.
But the law, designed to take effect before the November vote, spelled out that the “exclusive remedy” for violating any constitution provision dealing with how electricity must be generated would be a fine that could be as little as $100.
Ducey’s signature came over the objections of Sierra Club lobbyist Sandy Barh who said the measure was designed to allow utilities to ignore the renewable energy mandate because it would be cheaper to simply pay the fines.
Daniel Scarpinato, who is now Ducey’s chief of staff, acknowledged as much at the time, saying his boss wants to protect Arizonans from higher electric bills, exactly the claim made by APS.
Tobin, a former speaker of the House, was himself named to the commission by Ducey in 2015. He won election to a four-year term the following year in a campaign in which APS openly spent $4 million to ensure the commission remained an all-Republican affair.
