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Utility regulators grill Arizona Public Service executives

PHOENIX (AP) — State utility regulators lit into top executives from Arizona Public Service Wednesday at the start of a hearing on power disconnection rules and political spending by the state’s largest electric company.

Arizona Corporation Commission Chairman Bob Burns, a Republican, said APS orchestrated a wide-ranging plan to take control of the commission by influencing voters and sow discord among commissioners and staff. He said the plan was outlined in a “playbook” written by Jessica Pacheco, who then worked for political consulting firm and is now the utility’s vice president of external affairs.

He pressed Jeff Guldner, who takes over in November as chief executive of APS parent company Pinnacle West Capital Corp., to commit to never getting involved in corporation commission campaigns during his tenure.

“To me the root cause of all of this is the high amounts of money that was spent by APS in an attempt, in my belief, to capture the commission,” Burns said.

Guldner demurred, saying he’ll come back to the commission after he takes over the top job.

“I’m not in the role yet, Mr. Chairman, so I’m not in a position today to answer that question,” Guldner told Burns.

Earlier this year, APS detailed millions of dollars of political spending to help elect it’s favored regulators in 2014 and 2016 and to defeat a 2018 ballot measure. The spending was a break from a decades-long practice by the state’s utilities of not meddling in political races involving its regulators.

APS acknowledged giving money to groups that spent $3.2 million in the 2014 commission races, even though it had refused for four years to confirm or deny its participation in the election.

The utility also spent $4.1 million 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 had previously acknowledged those contributions.

In 2017, with a majority of the commission elected with the help of APS funding, commissioners approved a rate increase for the utility. The rate hike has been intensely criticized after many customers saw rate increases significantly higher than expected.

The FBI has launched an investigation into the utility’s 2014 political spending and confirmed in April that the examination into the expenditures continues.

The company is also under fire after a woman died when her power was shut off in triple-digit heat.

Outgoing CEO Don Brandt spoke little during the early part of the hearing. He used an opening statement to praise the customer service agents who work with customers when they struggle to pay their bills.

“We aren’t in the business of disconnecting customers,” Brandt said.

Burns and Democratic Commissioner Sandra Kennedy did not hold back in their criticism of the top brass from APS and Pinnacle West, including Brandt. 

“Mr. Brandt, your behavior is that of a kingpin who operates a company to mainly benefit himself,” Kennedy said. “You have, in essence, created a machine to purchase every and any elected official and defeat anyone in your way.”

APS steadfastly avoided getting involved in electing its regulators for a century, she said.

“You are here today because of your own scheming, plotting and planning,” Kennedy told Brandt.

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