Arizona utility finally comes clean about political spending

Facing what it saw as a threat to its monopoly from a surging rooftop solar industry, Arizona’s largest utility secretly funneled millions of dollars to back favored candidates for the state commission regulating it.

Arizona Public Service Co. recently acknowledged it gave money to groups that spent $3.2 million in the 2014 Arizona Corporation Commission races. The disclosure in filings with the commission came after the utility refused for the past four years to confirm or deny its participation in the election despite broad suspicion that it did.

The spending raises questions about whether a regulated monopoly such as APS should be allowed to contribute money to political causes that could adversely affect customers, and whether it should be permitted to keep such spending secret.

“They are still taking ratepayer money and using it against the ratepayers to jack up their rates,” said Tom Ryan, an attorney in metro Phoenix who has been a critic of some commission members.

The 2014 move by APS and its owner, Pinnacle West Capital Corp., was a break from a decades-long practice by the state’s utilities of not meddling in political races involving their regulators. The utility spent on elections again in 2016 and 2018 but publicly disclosed it.

The shift led to years of negative press, along with an FBI investigation that continues to this day.

Pinnacle West and APS CEO Don Brandt was involved in deflecting news reports as the company funneled a combined $12.8 million to 15 political groups in 2014, including the $3.2 million that was spent in commission races.

The utility finally disclosed the spending late last month after a Democrat who took office in January joined with other commissioners to demand records.

It also provided details of $4.1 million in spending to influence its regulators’ 2016 election and nearly $40 million to defeat a citizens’ initiative last year that would have required that it get much more of its power from solar and other renewable sources. APS previously acknowledged those contributions.

“That was a policy issue with direct impact on our customers and our business and on Arizona,” Jenna Rowell, the utility’s director of external relations, said of the 2018 spending. “So we got involved in that early, we were up front about that. In addition to all of the required disclosures, we talked frequently and openly about why we were getting involved against that effort.”