The head of the Arizona Corporation Commission says the indictment of a former member on bribery charges may make the case for appointing utility regulators instead of electing them.
Tom Forese noted that Gary Pierce is charged with accepting money through his wife from a utility executive in exchange for supporting two separate financial matters to benefit that family owned company.
Pierce, through an attorney, has said the indictment represents selected use of facts by the government.
Forese is not commenting on the charges, which also have ensnared Pierce’s wife, Sherry, lobbyist Jim Norton and George H. Johnson, manager of Johnson Utilities.
But he said the fact that prosecutors believe they have a case says something.
“This could be the strongest argument for having an appointed commission,” Forese said.
Any such change would require voter approval, and the earliest the Arizona Constitution could be amended is 2018.
In the meantime, Forese said, “These allegations that are before us demand immediate action. And that’s where our focus should be right now.”
Most immediately, Forese wants fellow Commissioner Andy Tobin to begin “an audit and review” of the policies that, according to the indictment, were enacted because Pierce had been given money to support them.
One of those is a 3-1 vote by the commission, with one abstention, in 2011 to include another $18.2 million into the rate base for Johnson Utilities, reversing an earlier commission decision. More money in the rate base translates to the ability of a utility to increase what it charges customers to cover costs.
The issue with broader implications — and one the current commission might re-examine — is the 2012 proposal by Pierce to allow firms like Johnson Utilities to charge customers for the income tax payments owed by the company’s owners. That proposal was approved a year later on a 4-1 vote.
Forese, in a letter to fellow commissioners, said a review is necessary.
“The current commission must determine if those decisions were made in the public interest,” he wrote. At the very least, Forese said there needs to be a “code of ethics” for commissioners.
He pointed out that ACC staffers are governed by certain policies. For example, staffers can’t have meals with utility officials.
“This same restriction should be considered for application to commissioners as well,” Forese said. He also said that those who lobby the commission should be required to register, presumably with the ACC. In potentially the most far-reaching proposal, Forese said other government bodies, including the Legislature, should be able to censure or remove members for certain conduct. “I ask that all such possibilities be explored,” he wrote.
Commissioner Boyd Dunn agrees there should be a conversation on how regulators are chosen.
“We are in the minority,” he said. “There are only 12 states that deal with elected commissioners. The rest are appointed.”
Dunn said having elected commissioners means candidates have to raise money — often from the very people who have an interest in the panel’s decisions.
But he said there’s also a downside to having appointed commissioners: “There seems to be less of an opportunity for citizens to participate” than when elected officials are listening to the voters.
The idea of an appointed commission does not sit well with Commissioner Bob Burns.
“The idea is, how do you prevent corruption?” he said. Burns said the way you don’t do that is “put the appointment in the hands of one person: the governor.”
But Tobin said an appointed system could work if properly structured, such as the way state Supreme Court justices are chosen. They are named by the governor, but must have been screened and nominated by a special commission.
For that to work, and for an appointee system to make sense, Tobin said the commission would first need to be changed to a largely judicial body, overseeing utility rates — but turning railroad regulation over to the Transportation Department, corporate filings to the secretary of state and securities regulation to the attorney general, for example.
