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Who says buying politicians won’t help APS?

(Photo by Ross D. Franklin/Associated Press)

In a huge win for the ratepayers, the Arizona Corporation Commission recently voted 3-2 to slash APS’s profitability from 10% to 8.7%, reject 75% of the executive cash bonuses, and deny APS from recovering $216 million spent at the Four Corners coal plant citing dishonesty and/or obvious wastefulness. 

But thanks to an insidious, under-the-radar change to the Arizona law, engineered by APS’s GOP friends in a party-line vote, it may be a short-lived victory for the ratepayers.  

APS repeatedly failed to scuttle the Champion complaint 

When the 2017 rate increase went into effect, all five regulators overseeing the utilities were either secretly or openly bankrolled by APS.  

Stacey Champion’s one-page complaint in January 2018, in which I served as the expert witness, set in motion a chain of events that were unimaginable just a few years ago. 

APS, of course, tried everything in its power to nip it in the bud.  

APS asked the commission to dismiss the petition, tried to limit the scope only to Champion’s bills, and mansplained that Champion misunderstood what the 4.54% bill impact represented. 

Abhay Padgaonkar

APS pushed for an expedited schedule to run the clock out so the hearing wouldn’t take place just before the 2018 election.  

When that failed, the bought-and-paid-for commission chairman Tom Forese brought in the APS-friendly staff who asked the judge to move the hearing after the election. 

APS even tried a Hail-Mary to disqualify me as an expert witness, but the highly-anticipated hearing took place as scheduled and garnered broad media coverage. 

The bad publicity for APS only got worse 

My Champion complaint testimony — that the rate hike was costing customers almost three times as much money — grabbed headlines in August 2018. 

Later that month, Forese, who had presided over the 2017 APS rate hike, finished a miserable fourth in the GOP primary and failed to make the November ballot. 

Democrat Sandra Kennedy won and immediately issued a subpoena, forcing APS to finally confess to the dark-money campaign in the 2014 commission election and millions more as “independent expenditure” in the 2016 commission election.  

The response also revealed that APS had spent a staggering $182 million between 2013 and 2018 on political spending, marketing, grants, and lobbying. 

The commission’s independent review of the 2017 rate hike concluded that APS had received $105 million in revenue surplus. 

Eight firefighters were injured in an explosion at an APS battery facility followed by the death of an APS worker when an explosion plunged downtown Phoenix into darkness for days. 

After Champion raised a stink, it came to light that APS had shut off power 110,029 times for non-payment in 2018, the first full year after the unpopular rate increase.  

The death of Stephanie Pullman after APS had shut off her power for a $51 overdue balance would soon become public and cause an uproar.  

APS suspended the faulty rate comparison tool after I notified the commission that the online calculator was steering customers to more expensive plans.  

Attorney General Mark Brnovich, despite being a beneficiary of APS’s election spending, launched an investigation, which led to a historic settlement and forced APS to refund $24 million to 227,500 ripped-off customers. 

APS tied for the worst ranking in the West and second-worst in the nation in the 2019 J.D. Power customer satisfaction study. 

The commission listed many of these significant deficiencies as its rationale in the latest rate case decision. 

Loyal lapdogs to the rescue 

But when APS was fighting a losing battle at the commission, APS’s Republican beneficiaries in the Legislature were busy bolstering the utility giant’s position in case things went sideways.  

They couched SB1063 as harmless occupational license reform so that people working in a regulated occupation have access to due process.  

The amended A.R.S. § 12-910, signed into law by Gov. Ducey in April 2021, will instead ensure that APS can request a brand-new trial in which the court must decide even the questions of fact anew without deference to any previous determination by the commission. 

Thus, the new law will undermine the commission’s exclusive ratemaking authority, render its enormous fact-finding work meaningless, and give APS and its shareholders a huge advantage in the appeal process.  

APS made sure to remind the regulators of the change in the law in its 114-page ultimatum demanding a do-over of the rate case decision.  

Unfortunately, APS’s $50 million investment in buying various politicians may pay off after all.  

The commission must dismantle APS’s untouchable status in a rigged monopoly system by adopting retail electric competition rules and free the captive ratepayers from the shackles of a monopoly running amok.  

Abhay Padgaonkar is a management consultant and an activist who served as the expert witness in the formal complaint hearing that triggered the current APS rate case. 

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