Despite changes in leadership, APS’s influence remains strong at the Corporation Commission

August 29, 2019 2:56 pm
Corporation Commission

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When the Corporation Commission executive director was forced to resign last year amid concerns of a conflict of interest with APS, many believed such problems would be finally put to rest. 

But the unelected staffers at the commission have brazenly continued to advocate anti-consumer positions favorable to APS on issue after issue.

In doing so, APS’s interests have been protected at the expense of ratepayers. 

Corporation Commission staffers inserted themselves into the complaint about the APS rate hike filed by Stacey Champion nearly six months after the complaint was filed. They did so at the behest of the commission chairman who had received a $3.2 million dark-money campaign assist from APS.

Given that opening, the staffers immediately attempted to throw a monkey wrench into the complaint by asking the judge to move the previously scheduled hearing until after the upcoming 2018 elections. The staffers, having signed the settlement agreement, were required to  “support and defend” the rate hike.

They neither conducted their own bill impact analysis nor did they find any errors in the Champion analysis that I conducted. Yet the staffers went on to rubber stamp APS’s argument (put forth without any analysis of the actual bill impact) and recommended to the judge that the customer complaint be dismissed

Two commissioners, without waiting for the judge’s decision, jumped the gun and ordered the staffers to conduct a rate review “because APS may be overearning.” 

The rate review and the subsequent commission decision affirmed virtually all the evidence presented by Champion, including $6.7 million in APS overearning, customer education that was not reasonable and understandable, the adjustor shell game by APS, new rates amounting to a second rate increase, the actual impact higher than the advertised 4.54%, and that customers were steered toward the least economical rate plans. 

Corporation Commission staffers in January 2019 recommended opening a public rate-review docket. But when faced with a public records request related to a third-party consultant’s audit of APS’s rates and financials, the staffers stubbornly refused to release it, thumbing their noses at the public by releasing 500 pages that are completely redacted. 

The number of customers APS disconnected in 2018 for non-payment soared by 50% compared to the average of five previous years, during the first full year after the rate hike. But Corporation Commission staff  removed the shutoff page entirely from the 2018 annual report. They only relented when their hand was forced after the media jumped on the blatant omission

One of the shutoffs had resulted in Stephanie Pullman’s death after APS cut off her power due to non-payment – that came to light only after the media blew the whistle on it. After a nearly two-week investigation, the staffers accepted claims from APS at face value and declared that it “cannot determine” whether or not APS broke any rules. APS has now reached an agreement with the Pullman family for undisclosed terms.

APS’s residential rates have been significantly higher and the gap is widening compared to the rates charged by other in-state utilities. In an op-ed, Commissioner Justin Olson questioned why APS was still a monopoly

Clearly, APS opposes any competition, so when ordered to craft rules for retail competition, the staffers reluctantly proposed retail competition only for large, non-residential consumers saying that “right now, we don’t believe the public interest includes residential” competition. The commission chairman had to explicitly request staff to prepare a full rules package that would include full retail competition for all customers

APS has gone all out to oppose stricter renewable standards and its lobbyists pushed for a new law, now signed by the governor, that will nullify the penalty for not complying. The staffers have been engaged in watering down the legally binding renewable energy standard and instead proposed that it be a weaker “goal” without any teeth.

It seems to me that APS’s hold on the Corporation Commission hasn’t waned much, if at all, even though the company’s most ardent allies – the commissioners it spent millions of dollars to get elected – no longer make up a majority of the five elected commissioners. The staff they built remains behind, and ratepayers are worse off for it.

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Abhay Padgaonkar
Abhay Padgaonkar

Abhay Padgaonkar is a management consultant based in Phoenix and consumer advocate who has served as an expert witness on behalf of ratepayers.