PHOENIX — Contending the public has the right to know, utility regulator Bob Burns is demanding that Arizona Public Service disclose what it spent trying to elect or defeat candidates last year, not just for the Corporation Commission but in all races.
In a letter to Donald Brandt, APS chief executive and president, Burns said the utility and Pinnacle West Capital Corp., its parent company, have a First Amendment right to participate in elections.
“It is not my intention to interfere with the exercise of those rights,” Burns wrote. And he told Brandt that he understands APS wants to support candidates that agree with their views.
“However, in my opinion, your support for any particular candidate should be open and transparent,” Burns said.
APS has refused to confirm or deny that it donated to a “dark money” group which helped two Republicans win the primary over two others who were campaigning on a platform of more solar energy. But company spokesman Alan Bunnell has said APS has been the subject of a “nonstop propaganda war” by pro-solar advocates, saying they have “misrepresented important Arizona energy issues” to further their own interests.
“It would be irresponsible for us not to defend our company,” Bunnell said.
But Burns, in his letter to Brandt, said there’s an implication to all that.
“Your unwillingness to disclose this information leads to a variety of unfortunate perceptions,” he wrote. So now he wants the information within 30 days.
Bunnell said Tuesday company executives had received the letter and has not decided how to respond.
But if APS challenges the demand, that would throw the issue into court. And what the justices ultimately rule would forever define how much publicly regulated utilities throughout the state have to disclose when they try to get those they like into office — or ensure the defeat of those they do not.
There is no record of either APS or Pinnacle West or any company-related political action committee giving directly to either Tom Forese or Doug Little.
But Save Our Future Now and the Free Enterprise Club together spent more than $3 million influencing the 2014 commission race. Those groups say they’re not required to reveal donors, contending they are “social welfare” groups exempt from state disclosure laws.
So Burns is instead relying on the fact that APS is a commission-regulated utility: As a monopoly, it must seek approval from the five-member panel for rate hikes and prove the additional dollars are needed.
The question, said Burns, is whether the utility’s expenses include contributions to either dark money group.
“Simply put, dollars that APS has received from ratepayers in order to recover the costs of providing utility service should not be used for political speech,” Burns wrote to Brandt.
“Unfortunately, I have thus far seen no evidence that such funds are not being spent on political speech,” he continued. “Under the circumstances, transparency requires a full reporting of any campaign contributions expended by APS in the past election cycle.”
Burns specifically wants a detailed list that includes any direct or indirect contributions to organizations that were involved in the campaign.
The question that remains is whether Burns has a legal right to demand the information.
Any precedent set by Burns’ request — or any lawsuit that develops — has implications beyond the corporation commission races given the prevalence of outside money during last year’s races.
For example, the Free Enterprise Club spent $437,000 in an unsuccessful bid to have Justin Pierce win the Republican nomination for secretary of state. And the same group put $80,000 into successful efforts to deny the Republican nomination for state treasurer to former Tempe Mayor Hugh Hallman.
While APS has not decided how to respond to Burns, a group of utility investors might fight any demand for disclosure.
In October, Mary O’Grady, an attorney for the Arizona Investment Council, sent a memo to commissioners telling them they have no right to subpoena the records of APS — or any other utility — to find out what they spent on elections.
O’Grady acknowledged the Arizona Constitution gives the commission the ability to “inspect and investigate the property, books, papers, business, methods and affairs” of any corporation that sells stock in Arizona as well as any commission-regulated utility.
But she said that power is limited to the extent the commission needs to do its job. And O’Grady said that job does not include campaign finance regulation and disclosure.
O’Grady said about the only way regulators could demand the information would be if a utility was asking for a rate hike. And she noted there is no such request pending at this time.
But former Arizona Supreme Court Chief Justice Thomas Zlaket sent his own memo saying the commission does have such power.
He represents the Alliance for Solar Choice, the manufacturers and installers who have been at odds with APS over its efforts to force homeowners with solar panels to pay more to the utility.
