Is the ‘legalized corruption’ that let APS get its way over?
Plenty of Arizona Public Service (APS) ratepayers — myself included — have been complaining about our electricity bills for the past four years.
We watched our bills skyrocket after the 2017 rate increase while also having to navigate novel and complex rate plans — plans that few consumers understood and that APS’ own customer service reps had difficulty explaining.
During this same period, ratepayers found out the utility’s parent company spent tens of millions of dollars on political campaigns and lobbying that, among other things, discouraged investment in public education and clean energy and helped elect the very commissioners who are supposed to regulate them.
But now it seems the tide has finally shifted, and APS no longer has carte blanche at the Corporation Commission.
The public utility recently requested another rate increase, an extraordinary move considering the last rate increase resulted in over-earnings for the monopoly with ratepayers shelling out $26 million more than what was approved by the commission.
This time around, however, regulators didn’t simply rubber-stamp the utility’s request.
First, the commissioners voted to lower the utility’s return on investment to 8.7% from the previous 10% — the maximum allowed — which will result in a sizable decrease in corporate profits.
Then on Tuesday, they approved lowering base rates and changing time of use plans to shorten the more expensive “on-peak” hours to 4-7pm from the current 3-8pm. They also eliminated the monthly grid fee rooftop solar users were paying and refused to allow the utility to recoup all of its pollution control upgrades made at the Four Corners coal plant, an investment an administrative law judge deemed imprudent.
Not surprisingly, the monopoly, which is accustomed to getting its way, isn’t happy with the commission and has promised to sue, claiming that the rate decrease would “hamper our investment in infrastructure to provide reliable service to our customers.”
Ratepayers — and commissioners — have every reason to scoff at Pinnacle West CEO Jeff Guldner’s statement, especially considering how much the monopoly has spent on questionable activities, including dark money campaigns for the utility’s preferred commission candidates, a tactic one utility watchdog called “a legal form of corruption.”
If APS is seriously concerned about its ability to provide reliable service to its captive ratepayers, I have a few ideas on how they can save some major cash and still have plenty of money for investments.
For starters, how about trimming — or better yet, eliminating — their hefty political donations to candidates and PACs?
It’s both unnecessary and obscene for a regulated monopoly to involve itself in every major statewide and legislative race. For instance, the secretary of state has nothing to do with electricity production or management, yet APS funneled hundreds of thousands of dollars into that race in 2014.
Nor does it make sense for the corporation, which uses the profits it makes from ratepayers like myself, to interfere and attempt to derail initiative campaigns such as the Invest in Education campaign.
And why does the monopoly need to spend millions on advertising and marketing when they have a guaranteed customer base?
Or millions on outside lobbying?
Why would anyone trust what Guldner is saying considering the company has not been forthcoming or honest in its dealings with consumers?
Remember, it wasn’t APS that let ratepayers know about its faulty online rate comparison tool or contradictory messaging or massive over-earnings or power shut-offs that resulted in the death of an elderly woman. Nor did the company make any kind of serious effort to educate consumers about its new and highly confusing rate design.
Most of those issues came to light because of the extraordinary efforts of two citizen activists, Stacey Champion and Abhay Padgaonkar, who have been roundly criticized by the utility’s lapdogs instead of receiving kudos for shining a light on APS’ dark dealings.
Guldner would like us to believe we can trust the company because its former CEO, Don Brandt, is no longer in charge. But Guldner is no outsider. He’s been a part of the company since 2004 and served as its executive vice president of public policy. He may be trying to right APS’ ship, but he still has a long way to go to prove the monopoly is no longer in the business of legalized corruption.
Until then, the commission did the right thing in standing strong against APS’ threats and giving ratepayers the financial relief they deserve.
This report was first published by the Arizona Mirror.