Opinion: APS’s involvement in the 2014 election raised plenty of legal and ethical questions. But there are ways to restore shattered trust.
Ultimately, APS elected the commissioners it wanted.
I ran the campaigns for Mason and Parker. Parker is a long-time friend and Mason is one of the hardest-working public servants in Arizona, so I considered it an honor to help both of them.
Ironically, at the same time, two people who worked for me almost a decade ago were leading the effort on behalf of APS against Parker, Mason and Kennedy.
APS ran one of the most aggressive campaigns I’ve witnessed in 20 years as a political consultant. Because its checkbook was bottomless, Parker, Mason and Kennedy never had a chance. Essentially, they were vastly outspent by the monopoly they sought to regulate.
APS shattered consumers’ trust
When Arizona became a state in 1912, monopoly powers were granted to utilities. In turn, those utilities agreed to come under the governance of a separate branch of government – the Corporation Commission.
In return for being granted a guaranteed service territory with captive customers and a near-automatic rate of return, these utilities agreed to act in the public interest and be independently regulated.
Breaking with a century-old tradition, Arizona Public Service funded the campaigns of the candidates it wanted on that once-independent commission, shattering all trust that consumers would get a fair shake when the commission sets the utility’s rates.
APS’ secret involvement in the 2014 campaign has raised numerous legal and ethical questions, the most serious of which centers on whether public corruption occurred in 2014.
What should the commission do now?
Recent reports seem to indicate that an FBI investigation that started several years ago related to APS’s 2014 campaign spending may still be ongoing. In the best-case scenario, no public corruption occurred.
Even if no public corruption occurred, it is still undeniable that APS directly influenced the election of commissioners who are responsible for regulating the state’s largest utility, leaving the perception that APS has captured its regulators.
So, what should the commission do now?
Call for public hearings. Place people under oath. The paper documents APS released over the past few weeks in response to the threat of commission subpoenas are likely a small aspect of what really occurred. Ask hard questions and demand honesty. Determine whether decisions approved by the commission have resulted in higher costs for customers. For the sake of Arizona, the commission needs to aggressively investigate what happened in 2014.
Propose a constitutional amendment or rule change that any entity regulated by the commission that contributes more than $100,000 to influence the political campaigns of commission candidates be prevented from doing business before the Arizona Corporation Commission for at least four years. Ratepayers (me and you) deserve an independent commission without even a taint of suspicion about that independence.
Fine APS for past involvement in corporation commission races, cap its profit in the next rate case or revisit key decisions affecting the company’s profitability to demonstrate to the public that this behavior is unacceptable in the future.
How APS can restore its reputation
New APS president Jeff Guldner’s top priority should be restoring the company’s reputation to pre-2014 political involvement. That means he should:
Publicly pledge to never again fund campaign activity for Corporation Commission candidates or any other political candidates in Arizona. APS is a regulated monopoly. There cannot be the perception that this utility controls all the levers of power in Arizona’s political community.
Aggressively invest in renewable energy like solar and wind, energy efficiency and electric vehicle implementation. Take an eraser to the past several years and move forward to the future.
Arizona deserves better from APS. The company must control its worst demons and regain the moral clarity it had prior to 2014.
Read the full story at AZ Central.