Arizona commissioners are openly batting for the utilities they are supposed to regulate
Gone are the days when wolves disguised themselves in sheep’s clothing.
The current regulators are openly going to bat for utility monopolies, meaning a world of hurt awaits Arizona’s captive ratepayers.
Southwest Gas, with 1.15 million Arizona customers, had already secured a steep 7.1% revenue increase in 2021.
The four-seat Republican majority on the Corporation Commission just handed the mega-utility the largest revenue increase in company history with another 9.4% hike.
Commissioner Kevin Thompson, a former employee of Southwest Gas for 16 years with the last four as a registered government lobbyist, had vowed during campaigning to reduce utility rates.
Within days of being sworn in, however, the lobbyist-turned-regulator did the exact opposite by voting in favor of his previous employer while opposing a four-year rate case moratorium, saying it reeks of regulatory instability.
Thompson met with utility investors
Thompson then made a beeline to New York for meetings sponsored by a powerful lobbying organization, the American Gas Association, which falsely used a prominent association’s name to promote the so-called educational program.
There, Thompson privately wined and dined with vocal and influential financial backers of investor-owned utilities, such as APS, Tucson Electric Power (TEP) and Southwest Gas (an AGA member).
Worse yet, he promised them as per his Facebook post that “the Arizona Corporation Commission is no longer going to allow the regulatory environment in Arizona to be dead last in the nation.”
Translation: The commission promises to go easy on the utilities.
Imagine a judge meeting privately with 1 side
Imagine a presiding judge traveling across the country before a trial to meet privately with only the supporters of one side and promising to go easy on their beneficiaries.
The many red flags, especially with two major rate cases pending before the commission, compelled me to file an ethics complaint against Thompson.
First, Rule 5.2 of the ethics code prohibits a commissioner from communicating with industry representatives whose interests are affected by commission decisions.
The ex parte rules forbid commissioners from unauthorized communication to avoid the possibility of prejudice.
What can be more prejudicial to the ratepayers than Thompson promising a looser regulatory grip on the utilities?
Second, the ethics code warns that a commissioner must not overtly or implicitly promise action. Thompson made an explicit, overarching promise of lax oversight – and even bragged about it.
GOP majority voted to quash complaint
And yet, the same Republican majority voted within days to quash the ethics complaint.
After secretly meeting with lawyers for hours – and seemingly without conducting any investigation to uncover evidence or without any mention of Thompson’s overt social media promise – Chairman Jim O’Connor declared that there was zero evidence.
O’Connor claimed that the current board is “above reproach” and that the complaint was “weaponizing” the ethics code.
As it turns out, O’Connor himself had a separate ethics complaint filed against him by the Arizona secretary of state for improperly using his official role to press county officials to throw out electronic voting machines.
The commission has failed to investigate and hasn’t taken any action on it since last year.
GOP members have jacked up APS rates
And O’Connor’s policy adviser at the commission? She is Thompson’s sister and was his campaign director.
Despite nepotism concerns, a brazen motion to appoint her – a sitting commissioner’s immediate family member – to be the Corporation Commission’s executive director narrowly failed.
The same Republican clique just jacked up APS’ Power Supply Adjustor by a jaw-dropping 153%, after rejecting the staffers’ recommendation to raise it only by 80%.
The 12-fold increase in a two-year period in the adjustor means that an average APS residential customer, using 1,050 kWh per month, will pay $220 more per year, whereas a typical business customer with 10,000 kWh per month usage will annually fork over $2,100 more.
After court ruling:APS customers could see another price hike
Most will soon feel the massive pinch, especially as summer usage cranks up.
Expect higher bills from this commission
These blatant commission decisions, justified as being in the public interest, hardly bode well for the public. Enriching the monopolies will impoverish Arizona’s residents, businesses, schools, hospitals and government agencies and stall economic growth.
But the worst is yet to come for the captive ratepayers.
The Arizona Appeals Court ruling to increase APS’ profitability despite customer service deficiencies and to make APS whole on $216 million in investments pumped into a dying coal plant will add hundreds of millions more to the APS coffers.
The pending TEP rate case application is insisting on a revenue increase of $234.1 million, or a 21.4% increase.
Not to be outdone, APS is demanding a total increase of $895 million, or a 26.3% increase.
The Republican-led commission appears poised to lower the boom on the ratepayers under the guise of improving grid stability.
It is sure to destroy every ratepayer’s financial stability and sanity in the process.
Abhay Padgaonkar is a consumer advocate based in Phoenix who argues for stronger utility oversight by the Corporation Commission. Reach him at abhay.padgaonkar@gmail.com.
This article originally appeared on Arizona Republic: Arizona Corporation Commission is batting for utilities it regulates
