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Utility regulators, APS boss spend all day in a verbal joust

Don Brandt, center, CEO of Arizona Public Service and its parent company, Pinnacle West Capital Corp., appears before the Arizona Corporation Commission in Phoenix, Wednesday, Sept. 4, 2019. (AP Photo/Tom Tingle, Pool)

Don Brandt, center, CEO of Arizona Public Service and its parent company, Pinnacle West Capital Corp., appears before the Arizona Corporation Commission in Phoenix, Wednesday, Sept. 4, 2019. (AP Photo/Tom Tingle, Pool)

After more than five years as one of the most influential behind-the-scenes players in Arizona politics, Don Brandt took center stage at the Arizona Corporation Commission on September 4 to answer questions about shut offs and political spending, among other topics.

The five commissioners took turns asking the APS and Pinnacle West CEO questions about the death of Stephanie Pullman and APS’s involvement with her disconnections, the company’s political spending dating back to 2013, and follow-up questions based on answers Brandt provided in writing before his hearing.

Things kicked off pretty quickly with Corporation Commission general counsel Robin Mitchell asking to avoid using Pullman’s name as a request from her family, so her case was further referred to as “the incident.”

Brandt answered some questions in a room filled with media, staff, lawyers, and a handful of protesters; and deferred some questions to his underlings. Following are summaries of some of the collateral subjects that were part of the daylong hearing.

Door Hangers

One of only a handful of topics all five commissioners agreed on was the company’s reasoning for not having any personal connection with customers during the process of delivering a door hanger to warn of a potential shut off.

Spearheaded by Commissioner Boyd Dunn’s questioning of Brandt, which was then deferred to Daniel Froetscher, APS’s executive vice president of operation, of why APS did not have any in-person contact with customers when delivering a door hanger on the premise.

Dunn was visibly annoyed by Froetscher’s responses, who acknowledged that nobody made contact with Pullman when delivering her door hanger. Froetscher said the reason for this is because of incidents that he said occurred while he did the job of contacting customers 35 years ago.

Now a third party contracting firm is in charge of delivering the door hangers without knocking or ringing the doorbell to confirm the message was received.

“A lot of us in the summer are not using the front door,” Dunn said, pointing out during the hot months of the year some opt to use the garage instead. 

Froetscher said there are no attempts to post notices on garages or other doors in addition to the front door. 

Froetscher said delivering the message is “not always well-received” and he personally had dogs unleashed on him, he was verbally threatened and one time someone pulled a weapon on him while delivering hangers. 

Dunn wasn’t impressed. 

“Really, in Sun City West you have that concern?” Dunn said, referring to the community where Pullman lived. 

Froestcher said it’s a system-wide policy, with APS serving customers in 11 of the state’s 15 counties.

Other commissioners have previously spoken out on not liking Brandt’s answer to not having any personal contact, but Sandra Kennedy was the only other commissioner to reiterate that concern. 

She asked Brandt how delivering a door hanger can be considered personal contact without any actual personal contact. Brandt deflected at first, then began to raise his voice at the commissioner saying he never said it was personal contact before eventually rolling his eyes at her line of questioning. 

FBI 

Bill Maledon, APS and Brandt’s attorney, dropped a bombshell when he told commissioners, in response to Kennedy’s questions, that the FBI investigation into APS’s 2014 political spending is ongoing, but the company expects it to wrap up soon. 

The investigation, commonly referred to as “Operation High Grid,” contributed to the indictment of former-Commissioner Gary Pierce, his wife Sherry, lobbyist Jim Norton and utility owner George Johnson in an alleged bribery scheme with the moniker of “Operation Ghost Lobby.” 

Gary Pierce confirmed to Capitol Media Services in a 2016 interview that FBI agents questioned him about the 2014 election, a race in which his son, Justin, was running for secretary of state. 

After 14 days of trial spread across five weeks in the Ghost Lobby case, there was a hung jury and the case was eventually dropped by federal prosecutors.

Still, the ongoing investigation is not going to necessarily stop the company from spending on campaigns in the future. 

Burns asked incoming CEO Jeff Guldner if he would promise that political spending on utility regulators would come to an end. Guldner said he is not currently CEO, and that he could not make that promise. He did promise to come back when he is CEO to answer questions. 

That’s a far cry from what Guldner said in 2013, when he claimed to The Arizona Republic that the company did not meddle in any effort to get commissioners elected, which was proven to be untrue. 

“We don’t tell employees who to vote for or try to influence elections. If you do that and are wrong, you have to live with it for four to eight years,” he said at the time.

Dunn also expressed his distaste of independent expenditures, including the ones that contributed to his 2016 election. He said that while the commission does not have any control over corporate spending, there’s nothing illegal about corporations spending money how they want, even to elect regulators.

“Because it is legal it does not make it right,” he said. 

No Answers

Brandt spent roughly as much time in silence as he did speaking, but even when he responded to commissioners he often deferred to other executives or refused to answer on the advice of his attorney. 

This mostly came about when Kennedy was asking him – and only him – questions. She made it very clear she did not want to hear from anyone but Brandt. 

On several occasions Brandt claimed to not know the answers to questions and tried to defer to other APS employees or his attorney. But Kennedy was relentless in saying she only wants to hear from Brandt. 

“That’s why you’re here,” she said numerous times.

Burns opened up the questioning, but none were directed at Brandt. Dunn followed suit, but Brandt deferred all answers, so when it was Kennedy’s turn it had been more than an hour before the outgoing CEO had spoken.

Brandt’s attorney, Bill Maledon, claimed he thought Kennedy’s questions crossed the line, were unfair, or they did not have to legally respond; and in one instance directed responses at Burns, who is chairman of the commission, to complain about Kennedy.

Burns put his full support behind his colleague, reminding the lawyers that regulators are entitled to ask questions and saying he wouldn’t force Kennedy to limit the scope of her questions. 

Kennedy and Brandt bickered over customer deaths, with Brandt denying any “direct ties” to the deaths. 

They also bickered over company lobbyist Jessica Pacheco’s involvement in political spending and subsequent promotions, but Brandt’s attorney said they aren’t required to answer those questions, and political spending to defeat Prop 127, a ballot measure to make use of renewable energy stricter. Brandt said lots of utilities, and even some regulators, opposed it. 

Unsatisfied

Kennedy and Brandt also got into it over APS’s poor J.D. Power customer satisfaction ratings, though Brandt claims he sees “overwhelmingly positive” feedback. 

“The kudos thrown at me is embarrassing,” he said, which Kennedy found hard to believe. 

“In my circle, that’s not what I hear,” she said.

The 2019 J.D. Power ranking listed APS dead last among the 13 biggest utility providers in the West region. Arizona’s Salt River Project, which is not regulated by the commission, was ranked at the top.

When the day was wrapping up and the final commissioner, Lea Marquez Peterson, began her questioning, she wanted to clarify from Brandt and APS why they opt not to use J.D. Power as its source for customer satisfaction. 

Brandt said it was because APS uses its own system it created, which cannot be compared to any other utility because no other utility uses this system.

Howard Fischer of Capitol Media Services contributed to this report.

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