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APS Refuses to Reveal Campaign Contributions to ACC

January 12, 2016 By Cheryl Kaften

Arizona Public Service – which serves more than 1 million customer as the largest electric utility in the Grand Canyon State – has refused to respond to a request (Docket No. AU-00000A-15-0309) from the Arizona Corporation Commission (ACC) “to voluntarily refrain from making campaign contributions in support of, or in opposition to, Corporation Commission candidates” and to reveal by letter any such donations made to date.

In a December 29 letter to Commissioner Bob Burns, utility CEO Donald Brandt said, “APS does not recover from customers the cost of any political contributions. Compelled disclosure about political contributions that APS or its affiliates have made out of shareholder profits would go beyond what is required of all corporations under Arizona campaign finance law, and would impinge on APS’s First Amendment rights.”

In an earlier, October 23 letter, Brandt had said, “If the companies, or other parties appearing before the commission, seek to persuade voters to elect commissioners who support certain policies instead of others, that choice to engage in a public political debate does not reflect on the integrity of commissioners. Nor does political speech reflect on the integrity of legislators in Arizona, or in any other state. This is simply how democracy works: consumers, businesses, and others with an interest in legislative decisions seek to inform voters and persuade them to support the candidates whose positions those speakers favor, and the voters decide which candidates to elect.”

The ACC said it was essentially forced to make the request because in the recent past, there have been repeated articles in the press concerning APS’s alleged contributions to political campaigns.

“According to these sources, either APS or Pinnacle West, APS’s parent company, allegedly contributed a significant amount of money to certain advocacy organizations, which in turn contributed money in support of or in opposition to a number of candidates,” ACC explained, adding, “When first reported, APS neither confirmed nor denied these claims. Later, however, Pinnacle West appears to have disclosed to its shareholders that it had made campaign contributions in an effort to defend APS against what it considered to be unfair attacks.”

The commission further noted that the request was made to protect the reputations of all parties involved – and to make it clear that “we believe in a necessary and appropriate degree of independence and separation between the commission and the entities – both regulated and unregulated – that appear before it. … Especially concerning to us is the public perception that the commission, by its silence, has tacitly condoned this behavior.”

What’s more, the ACC said it could not rule out that at some future date it might consider whether conducting an audit of any public service corporation would be warranted and whether such an audit might be within the scope of its authority.

Meanwhile, the rest of the industry seems to be falling into line.

Tucson Electric Power on December 3 assured the commission, “The companies do not plan to deviate from their longstanding practice of refraining from making campaign contributions in support of or in opposition to Arizona Corporation Commission candidates. Moreover, the bylaws of our employee-funded political action committee expressly prohibit campaign contributions to: (i) any candidates running for the office of ACC commissioner; or (ii) any political action committee advocating for or against any candidates running for the office of ACC commissioner.”

Southwestern Utility Management replied to the ACC in October, noting that, “First and foremost, we agree and understand that the commission must avoid the appearance of impropriety. To our knowledge, the utility companies managed by Southwestern have never provided campaign donations in an amount that could be perceived as being influential for two reasons. First, small utility companies not having the financial wherewithal to give substantial campaign donations. Second, like you, we recognize that the commission needs to independent and not beholden to any interest group. Therefore, Southwestern will continue to advise its clients to stay this course of action.”

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