ACC asks judge to block bid to investigate APS election finances
PHOENIX — Attorneys for members of the Arizona Corporation Commission told a judge Tuesday he should block a bid by one of the panel’s members to investigate whether financial help they got or are suspected of getting from Arizona Public Service for their elections tainted their vote to allow the company to collect more money from customers.
David Cantelme, representing Andy Tobin, said what Bob Burns ultimately wants is a ruling that Tobin and three other commissioners should have been disqualified from approving the rate hike last year.
But Cantelme told Maricopa County Superior Court Judge Daniel Kiley that there is no legal procedure for commissioners to be disqualified from hearing issues, even if they involve parties that have helped them get elected. And if that’s the case, Cantelme said, it’s legally irrelevant even if his client and the other commissioners voted on the APS increase, meaning there’s no reason to allow Burns to investigate.
Bill Richards, representing Burns, responded that it does not matter whether there is no specific law or rule on disqualification of utility regulators.
He said what Burns wants to protect is the constitutional right of “due process’’ of cases being decided by impartial judges. And in this case, Richards said, the commission was acting in a quasi-judicial capacity.
Cantelme, however, said even if there were a due process violation — a point neither he nor attorneys for APS are conceding — Burns has no right to assert it.
That right, he told Kiley, belongs to those who were parties to the case. And he said none of the 29 parties, including the utility, the Residential Utility Consumer Office or a host of intervenors, have raised the issue and all appear happy with a deal that was cut to allow APS to collect another $7 million a month from its customers.
“If the litigants themselves do not advance and say, ‘My due process rights have been denied,’ where does Commissioner Burns get off in trying to force something down their throats that they don’t want and never asked for?’’ Cantelme said. “He hasn’t got that authority.’’
What Kiley decides has implications beyond this specific dispute — and this specific rate case. It also could set precedent for what happens in future cases when parties to a rate case, whether utilities or others, are providing direct or indirect financial help to elect the very regulators who will decide the issue.
Burns contends that an investigation is necessary to first determine whether APS or parent Pinnacle West Capital Corp. was the source of $3.2 million spent by “dark money’’ groups to help elect Republicans Tom Forese and Doug Little in 2014.
Those groups claim their status as “social welfare’’ organizations under the Internal Revenue Code exempt them from disclosing donors. And APS will neither confirm nor deny it was the source of those dollars.
In 2016 APS openly spent more than $4 million to defeat Democratic candidates, helping to ensure the election of Tobin, Boyd Dunn — and Burns himself. But Burns contends APS didn’t really want him but feared him less than the Democrats.
That led to the 4-1 vote by the commission last year, with Burns in opposition, approving the rate-hike deal.
Kiley has previously rejected a claim by Burns he has the independent power as a commissioner to subpoena the company’s records to find out what it is spending on political, lobbying and charitable expenses. Now Burns hopes to convince the judge that he should allow him to pursue an investigation into whether the other four commissioners had conflicts of interest.
Assuming Kiley were to allow that, it could lead to last year’s vote being voided.
But Sarah Barnes, representing Dunn, told the judge there’s another problem with what Burns is seeking. That has to do with the fact that it takes a quorum of the commission -- in this case, three votes -- to decide any issue.
She cited what is known as the “rule of necessity.’’ In essence, it says that if a quorum of the commission has a conflict of interest, then none of them have a conflict and all can decide the issue because there is no one else who can do it.
Richards said this rule will soon no longer apply because Little quit last year to take a job with the Trump administration and Forese, who lost his reelection bid, will be out of office after the end of the year. He told Kiley that means there will be a quorum of three who, in his mind, are untainted and could decide the issue if Tobin and Dunn ultimately are disqualified: himself, Justin Olson who was appointed to take Little’s place after the APS vote, and Sandra Kennedy who apparently has won a seat on the commission and will take office in January.
But Cantelme told Kiley that’s precisely the reason he should not give Burns the go-ahead for his investigation. He said the newly constituted commission always has the power to revisit the 2017 vote if a majority decides it was wrongly decided.
“Who knows what they’re going to say?’’ Cantelme asked.
The new commission already is going to have to look at the deal, or at least part of it.
A hearing officer is expected to give a report next month on a complaint by consumers that their actual bills went up more than APS had said they would. But the commission will not get to review those findings until at least January.
Kiley said he will rule as soon as he can.