Judge will not force APS to turn over records of political spending
PHOENIX — A judge is refusing to force the state’s largest electric company to turn over its records of political spending to a utility regulator, at least not yet.
In a new order, Maricopa County Superior Court Judge James Kiley did not address the assertion by Bob Burns that he has powers as a member of the Arizona Corporation Commission to compel the production of documents by Arizona Public Service and parent company Pinnacle West Capital Corp.
But the judge said it is premature for him to rule on Burns’ request that he order the records produced. Instead, he said that Burns first needs to ask the full commission to compel the utility and its parent to produce the documents.
Only after the commission rules on that request, Kiley said, will it be appropriate for him, as a judge, to intercede.
The ruling is at least an interim victory for APS and Pinnacle West who have objected to giving Burns the documents he wants — documents he said will show whether the companies were behind more than $3 million in anonymous donations that led to the 2014 election of Republicans Tom Forese and Doug Little to the commission.
But Kiley also rebuffed a bid by APS attorney Mary O’Grady to dismiss Burns’ lawsuit outright. Instead, the judge simply put the case on the back burner to see what happens next.
“An order staying these proceedings would respect the commission’s authority to consider enforcement of the subpoenas in the first instance just as much as a dismissal would,’’ he wrote. Anyway, Kiley said, keeping the case alive would be more efficient for all sides rather than forcing Burns to have to start over again, from scratch, if his plea to his colleagues goes nowhere.
There’s a decent chance that will end up being the case. Other commissioners appear anxious to put the whole question of what happened in 2014 in the rear-view mirror.
“His fight with APS is an obsession,’’ Forese told Capitol Media Services on Tuesday, calling it “misdirected’’ given everything else going on at the commission, notably the indictment of former regulator Gary Pierce and accusing him of accepting money from the manager of Johnson Utilities in exchange for his vote on some rate-hike matters. (See related story.) “I haven’t changed my position on this at all,’’ said Commissioner Andy Tobin, who has opposed Burns’ subpoena efforts. “No one’s been able to convince me of a better argument to agree with Bob.’’
Burns, for his part, said he wants to consult with both his attorney and his policy adviser “and find out why my next move is.’’
He said he understands why Kiley does not want to intercede, at least not at this point.
“You have to establish a record,’’ Burns said. But Burns said he remains adamant that he will get the information he wants, sooner or later.
He is specifically questioning how APS and Pinnacle West, which is pretty much wholly dependent on APS customer revenues for its profits, are spending money not only to influence elections but also to hire lobbyists and even charitable contributions.
“I want to know whether it benefits ratepayers and when it benefits the company,’’ Burns said.
The difference is crucial: Expenses that benefit ratepayers, in general, can be passed along in the form of higher bills; those that do not have to be paid out of shareholder earnings.
Central to the legal dispute are questions about what role Pinnacle West and APS played in that 2014 election.
What is known is that the Free Enterprise Club and Save Our State Now together put $3.2 million into getting Forese and Little elected. What is not known is the source of those funds as the two groups claim their status as “social welfare’’ organizations exempt them from Arizona laws compelling them to disclose their donors.
APS has repeatedly refused to confirm its role in that election, with a company spokesman saying only that the utility has a right to defend itself against what it saw as unfair charges.
Unable to get donor records from either organization, Burns instead subpoenaed documents from APS and Pinnacle West.
APS, as a regulated utility, did supply some information that Burns dismissed as just “some public records,’’ things he said the company already files with the commission or that Pinnacle West, as a publicly traded corporation, must make available to the Securities and Exchange Commission.
In a formal opinion last year, Attorney General Mark Brnovich said individual commissioners have the constitutional right to subpoena the records of regulated utilities, like APS.
But O’Grady, in fighting Burns’ demand, contends that power is limited can be be exercised “only in connection with an investigation, inquiry or hearing authorized by the commission.’’
The records of Pinnacle West are another question.
Brnovich, in that opinion, said going after the records of affiliated companies not directly regulated by the commission would require the consent of a majority of the five-member commission. And to this point only Burns has shown an interest in doing that.
APS and Pinnacle West were more above-board last year, publicly disclosing putting more than $4 million into the race to ensure the commission remained an all-Republican affair.
That helped Tobin, Boyd Dunn — and Burns. But Pinnacle West CEO Don Brandt said that, even with the public fight with Burns, he found him preferable both Democrats Bill Mundell and Tom Chabin.