Stories about Arizona Public Service
Harassing widows
Over on Facebook, our mother’s friend Carolyn reports:
I have another APS story. My husband and I moved here in 2001. He passed away from a heart attack in 2006. I had always paid our bills and I just continued paying APS every month There was no interruption of service and I have never been late. About 5 years after he passed I got a notice from APS that they were terminating my service. No explanation, just we are cutting off your power in 10 days. When I called to find out why I was told that they had learned that my husband had died and only his name was on the bill. That if something happened APS couldn't be sure they would be paid. “We need to have a responsible person's name on the bill,” so I added my name to the bill. I then learned APS does this to widows all the time. Unfortunately some women don’t have their own credit and they have to have their children or someone else put their name on the APS bill. One poor lady I spoke with was so upset. She didn’t know what to do and was frightened of having her power turned off. There was no, “Sorry your husband died,” from APS, just “We have to make sure our bill is paid.”
Not paying what they owe
One of our mother’s neighbors passed this along:
I would like to add another APS story. I was responsible for my handicapped brother. We moved him here Cheyenne when he needed family and help. He had Cerebral Palsy and couldn't walk etc. He lived in a one bed condo in Sun City that the family bought for him. It was like your Mom's and we made it ADA compliant. Jim was on SS and was so frightened of having his power cut off that he over paid them, a lot. When he became ill I moved into a care home and I sold the condo and had the power shut off. My handicapped, elderly brother had a $3000 refund from APS. They just kept taking his money and never questioned a $3000 overage on his account.
He was 80 years old and in a wheel chair. He could handle day to day activities, but he needed support which we gave him. But I had no reason to check on his bills. He didn't have any except for utilities, HOA and food.
I believe the polite word for describing APS is “greedy”.
Tucson.com | APS settled lawsuits involving 2 other customers who died after power shut off
By Howard Fischer Capitol Media Services Jul 3, 2019 Updated Oct 14, 2019
PHOENIX — The state’s largest electric utility acknowledged Wednesday that it settled claims with the survivors of two customers who were found dead in their homes after their power was turned off.
The two are in addition to the previously reported death last summer of 72-year-old Sun City West resident Stephanie Pullman, whose APS power was cut off after she paid $125 of her $176 bill. The death certificate said she had preexisting conditions exacerbated by the temperature in her house.
Pullman’s death led state utility regulators to vote June 20 to immediately block electric companies under their purview, including APS and Tucson Electric Power, from shutting off power to residential customers who do not pay their bills in the hottest months, June 1 through Oct. 15. The emergency order is in effect while the commission considers a permanent rule.
In a filing Wednesday with the Arizona Corporation Commission, Barbara Lockwood, an Arizona Public Service vice president, disclosed the two other cases.
She said an unidentified customer was found deceased in her apartment in November 2011.
While APS disagreed that the power being turned off had led to the death, the company settled out of court.
Lockwood told of a similar incident in June 2018 where a customer, also female, was found dead in her residence. Here, too, the utility settled out of court.
The two 2018 deaths occurred since the company got permission in 2017 from the commission to increase what it can charge customers by $95 million a year.
The company also acknowledged that there were about 110,000 disconnections in 2018 out of 1.25 million customers, compared with about 56,000 the prior year.
Daniel Froetscher, the company’s executive vice president for operations, told Capitol Media Services it would be a mistake to link either the deaths or the increased disconnections with the new rates.
He said the 2017 case revamped the rates, including things like new time-of-day and demand charges, and that not all customers had a rate increase.
Also, Froetscher said the 2017 disconnection number was artificially low, the result of the company suspending turnoffs as part of revamping its billing system. He said the problems some customers were having paying their bills likely were pushed into 2018.
While APS settled with the estates of the two customers, there was no admission of liability, Froetscher said. He said the company decided not to proceed to a trial, in part to protect the survivors and in part because of the “avoided costs” of litigating the cases.
Froetscher would not say how much APS paid out in either case.
Lockwood, in her filing, echoed that the company is not acknowledging fault.
“It is important to note that in each case there are other circumstances and contributing factors that likely impacted the customer’s health,” she wrote. “It is typically unknown, and often unknowable, what role — if any — disconnection of electric service played.”
In Pullman’s case, Froetscher said that, to date, there has been no claim filed against the company by her survivors.
Froetscher said the company does not acknowledge any wrongdoing in its disconnects.
“In these cases, from a policy and procedures standpoint, APS did what it needed to do,” he said, saying those policies are “aligned with and in compliance” with what is required under commission rules.
Still, Froetscher said, simply complying with those policies and procedures does not answer all the questions raised and does not prevent “unwanted events and unwanted outcomes in which some of our most vulnerable populations fall through the cracks.”
“It’s tragic in that sense,” he said, saying that it becomes the responsibility of APS and other utilities, the commission, social service agencies and maybe even the Legislature and governor to take a closer look.
“It’s a bigger issue that needs to be examined as it relates to ensuring that the safety net for our most vulnerable constituents and customers is, in fact, sufficiently robust such that we do not have these kind of situations again,” Froetscher said.
Lockwood, in her filing, also said company staffers also found two other instances in the past 10 years where there were claims about disconnections having an impact on the health of a customer.
One was a 2009 claim by someone who apparently was staying at a residence where the power had been previously disconnected. He said he was harmed in a fire started from the candles he was burning for light.
That lawsuit, Lockwood said, was resolved when the occupant dismissed the case.
The other from last year involved a customer claiming in a news story of having to be hospitalized. But Lockwood said the claim against the company never alleged injury or hospitalization and the case was closed.
Energy and Policy Institute | Arizona regulator investigation unveils Arizona Public Service Company’s political spending
Joe Smyth June 14, 2022
An inquiry by Arizona Corporation Commissioner Sandra Kennedy has revealed new details about the political spending of the state’s largest electric utility, Arizona Public Service Company.
Kennedy’s inquiry provides an additional three years of data about the amount of money Arizona Public Service Company (APS) spent on outside lobbying firms, marketing, nonprofit groups, and the lobbying efforts of trade associations like the Edison Electric Institute. Along with the details that APS provided to Commissioner Kennedy in 2019, the response expands the public record of the utility’s political spending over the last nine years.
The APS response to Kennedy’s latest inquiry also reveals new details about other issues, such as the percentage of certain APS employees’ salaries that are charged to ratepayers, how many APS staff used to work for the Arizona Corporation Commission, and which marketing expenses the utility charged to ratepayers.
The inquiry shows one way that state utility regulators can shed more light on monopoly utilities’ political spending, as the Federal Energy Regulatory Commission considers new rules that would make it harder for utilities to charge ratepayers for their trade associations’ political activities.
APS spent $4.8 million on outside lobbying expenses over nine years
The inquiry is the latest in a years-long effort by Kennedy and other regulators to reveal details about APS’ political spending, in response to the utility’s expansive efforts over the last decade to influence the elections of its own regulators, defeat a clean energy ballot measure, lobby state legislators, and fund charitable groups to help achieve its political goals.
In February, Kennedy requested details about APS’ spending in 2019, 2020, and 2021 on outside lobbying expenses, advertising and marketing, political groups, trade associations, and 501(c)(3) and 501(c)(4) nonprofit groups. Those questions are similar to the questions Commissioner Kennedy asked in 2019, requesting details about APS’ political spending between 2013 and 2018.
Kennedy’s 2019 request followed high-profile controversies in which APS secretly spent millions of dollars on political campaigns to influence Arizona Corporation Commission elections in 2014 and 2016, and later spent tens of millions of dollars to defeat a clean energy ballot measure in 2018. Prior to Kennedy’s 2019 request, former Commissioner Bob Burns issued a subpoena in 2016 to compel APS to provide details about its spending to influence the 2014 Commission elections, but APS refused to comply, and a majority of commissioners at the time would not enforce the subpoena. After Kennedy was elected to the Commission in 2018, her 2019 request for details about APS political spending was reinforced by a letter from two other Commissioners, making clear that a majority of the five-member Commission was willing to support a subpoena.
The APS response to Kennedy’s latest inquiry shows that APS spent $1,187,333 on outside lobbying expenses during the three year period of 2019, 2020, and 2021, which are detailed in attachment A. Along with the $3,678,162 it spent between 2013 and 2018, the two sets of disclosures show that APS spent $4,865,495 on outside lobbying expenses over the last nine years. That figure does not represent all of APS’ spending on lobbying, since “outside lobbying expenses” refers to lobbying firms that APS hires, but does not include the salaries of APS employees involved in lobbying efforts.
APS and Pinnacle West spent $93.2 million on advertising and marketing over nine years
In its latest disclosure, APS said its parent company Pinnacle West spent $12,568,678 on advertising and marketing expenses during 2019, 2020, and 2021, but did not provide details about that spending, stating: “Many of Pinnacle West’s agreements with its advertising partners are bound by commercial terms of confidentiality that Pinnacle West must uphold.” In its 2019 disclosure, APS said Pinnacle West spent $24,421,150 on advertising and marketing expenses between 2013 and 2018. Over the last nine years, Pinnacle West spent $36,989,828 on advertising and marketing expenses.
APS said it also spent $21,677,646 on “customer education and outreach” advertising and marketing during 2019, 2020, and 2021, detailed in attachment C. Along with the $34,605,226 APS spent on advertising and marketing between 2013 and 2018, the regulated utility spent $56,282,872 over the last nine years.
Between Pinnacle West and APS, the company spent $93,272,700 on advertising and marketing between 2013 and 2021.
APS and APS Foundation spent $72.3 million on charitable groups over nine years
APS said it spent $22,711,037 on “corporate giving” to 501(c)(3) and 501(c)(4) charities during 2019, 2020, and 2021, detailed in attachment G. APS noted in its response that this figure is not the total amount of APS’ charitable contributions, because APS also spends money on organizations that are not 501(c)(3) and 501(c)(4) charities, but the utility did not provide the full amount of its “corporate giving” to all types of organizations. Along with the $30,865,142 APS spent between 2013 and 2018, the company spent $53,576,179 on “corporate giving” over the last nine years.
APS said it also provided $2,885,350 to charities through its APS Foundation during 2019, 2020, and 2021, detailed in attachment F. Along with the $15,904,120 the APS Foundation spent between 2013 and 2018, the company spent $18,789,470 on charitable groups over the last nine years.
Between APS and its APS Foundation, the company spent $72,365,649 on “corporate giving” to 501(c)(3) and 501(c)(4) charities between 2013 and 2021, not including charitable spending to other types of nonprofit groups that APS did not include in its disclosure.
An EPI report published in 2019, “Strings Attached: How utilities use charitable giving to influence politics and increase investor profits,” investigated how charities that receive money from investor-owned utilities sometimes then support the utilities’ political priorities, often without disclosing the funding. For example, some charities that received money from APS signed a letter supporting an APS rate increase, and others signed on to arguments opposing the 2018 clean energy ballot measure.
A key recommendation of the EPI report is that state utility regulators should “Require utilities to disclose all charitable contributions that they make from their corporate coffers in an itemized fashion. Mandatory disclosure can be a key tool for regulators and the public to know when organizations attempting to influence decisions are being paid by utilities with an interest in a proceeding’s outcome.”
APS spent $73.6 million on political groups over nine years
APS said it spent $1,447,344 on political groups during 2019, 2020, and 2021, which included “contributions to political parties, payments to trade associations that may have been used for lobbying or other political activities as reported to APS and Pinnacle West, and independent political expenditures directly or in support of an independent political action committee.”
That number showed a marked drop from the $72,182,150 that APS spent on political groups between 2013 and 2018, more than half of which went to defeat a clean energy ballot measure in 2018. In total, the company spent $73,629,494 on political groups over the last nine years.
The spending on political groups is detailed in attachment E, including $57,053.54 to the American Legislative Exchange Council (ALEC), the controversial corporate lobbying group that connects companies with conservative lawmakers to develop model state legislation.
During the three year period, APS disclosed spending $440,004 on the Edison Electric Institute, the trade association for investor-owned utilities. However, that figure is not the entire amount that APS paid to EEI, just the portion of its annual dues “that may have been used for lobbying or other political activities as reported to APS and Pinnacle West” – in other words, the amount EEI itself determined was used for political purposes. Utilities’ spending on trade associations are no longer independently audited; EEI uses a definition of lobbying that does not count the full suite of activities it performs to influence policy, politics and regulation, as EPI and others have noted . The Federal Energy Regulatory Commission is considering a rule change that would make it harder for utilities to charge ratepayers to subsidize trade associations’ political work.
APS says some marketing expenses are included in customer rates, but outside lobbying expenses, corporate giving, and political groups are not
Kennedy’s latest inquiry also requested that APS provide details about whether any of its political spending is included in customer rates. In its response, APS said that it does not include any of its spending on outside lobbying expenses, corporate giving, and political groups in customer rates.
But APS said some of its marketing and advertising spending can be included in customer rates, such as advertising “focused on customer education and outreach including energy efficiency, customer programs, billing and payment options, rate plan education, limited-income assistance, disconnect hold period education, wildfire and monsoon safety, outage management, and other similar communications to help our customers understand and manage energy use.” APS said “general advertising or marketing about APS and its energy goals is not included.”
The disclosure did not state how much of APS’ total advertising and marketing spending could be charged to ratepayers, but a review of APS marketing and advertising expenses detailed in attachment C shows that fewer than 300 expenses could not be included in customer rates, out of 2400 total expenses.
During the last 5 years, APS employed nine people that used to work for its regulator
Kennedy requested that APS “provide the Commission with the total number of former Commission Staff and Commissioners that APS has retained in any capacity, including consultants or contractors in the past five years.”
APS responded that it “is aware of nine individuals the company has employed or retained as of January 2017 that were at one time employed by the Commission,” and that seven remain employed by APS today.
The APS response doesn’t specify which former Arizona Corporation Commission staff now work for a utility that they once helped regulate.
APS charges customers for salaries of employees involved in communications and lobbying
Kennedy also requested that APS provide information about the percentage of certain employees’ salaries that are charged to ratepayers, for “employees or consultants with a job description related to the following: Corporate Giving, Economic/Community Development, Public/Government Policy/Regulatory Affairs, Communications, Strategic Partnerships.”
APS said it “compiled a list of employees in positions within the Public Policy and Communications business units, encompassing the job descriptions included in Question 6.”
The APS response shows that the salaries of several employees focused on communications are entirely charged to ratepayers, including “Communications Consultants,” “Communications Representatives,” “Manager Media Relations,” “Director External Communications,” “Principal Strategist Corporate Communications,” and “Manager Strategic Stakeholder Communications.”
APS charges 100% of the salaries of several employees focused on public policy and regulatory compliance to ratepayers, including “Senior Vice President Public Policy,” “GM Regulatory Affairs & Compliance,” “Director State Affairs and Compliance,” and “Director Federal Affairs & Compliance.”
Several other employees’ salaries are mostly charged to ratepayers, including several focused on lobbying like “Federal Affairs Representative,” “Vice President Federal Affairs,” and “Public Affairs Managers.”
Out of the 56 job titles APS listed, 50% or more of the salaries for 43 job titles are included in customer rates. The salaries for only seven job titles that APS listed are not charged to ratepayers at all.
Notably, the APS response does not necessarily include details about every employee involved in public affairs, policy, partnerships, corporate giving, and communications, as Kennedy requested – just those employees in the Public Policy and Communications business units.
For example, APS CEO Jeff Guldner is also involved in the company’s communications and public affairs efforts, but APS did not include a breakdown of his salary. APS paid Guldner $8.1 million in 2021, according to the company’s latest 14A filing with the Securities and Exchange Commission.
APS did not respond to questions from EPI regarding its political spending.
Arizona Republic | APS acknowledges spending millions to elect Corporation Commission members, after years of questions
Ryan Randazzo The Republic | azcentral.com. March 29, 2019
After years of refusing to acknowledge it, Arizona's biggest electric company on Friday affirmed that it donated millions to dark-money political groups in 2014 that helped elect two candidates who would set prices APS charges customers.
Arizona Public Service and its parent company, Pinnacle West Capital Corp., made the disclosure in a response to requests from regulators, including a subpoena from one elected to replace a commissioner APS helped into office.
The disclosure showed that in 2014, Pinnacle West gave $12.9 million to 16 different political groups. The company said in its letter to the commission that $10.7 million went to groups that contributed to the Corporation Commission elections that year.
The five Corporation Commissioners set rates and policies for APS and other regulated utilities.
"APS is providing this information today voluntarily in the spirit of putting behind us any further debate regarding political spending, and with the hope that we can focus on the future to further the energy and economic goals of the state," Vice President of Regulation Barbara Lockwood wrote in a letter accompanying the documents.
The letter and 453 pages of documents were a response to a subpoena from Sandra Kennedy, a Democrat elected to the commission in November. Two other commissioners, Boyd Dunn and Robert Burns, also had requested the information.
Burns fought unsuccessfully for years to get APS and Pinnacle West to turn over the information, but previously didn't have the support of other commissioners.
Kennedy was sworn in Jan. 7, and in a week, opened an investigation into the political spending of APS and Pinnacle West.
She said she received three boxes of documents at 4:15 p.m. She said she is hopeful the disclosure marks a turning point for the utility because it is unsavory for a regulated utility to help elect its regulators.
"I'm hoping under their new leadership, there will be a new direction," Kennedy said.
Jeff Guldner was named president of the utility in December. He previously was a vice president of policy.
"I'm going to put a lot of faith and a lot of hope that with Jeff Guldner and his team that we will not see any more expenditures when it comes to electing the very individuals that regulate them," she said.
It all started with a debate on solar
APS's turn into dark-money started with a debate over rooftop solar policies in 2013. That's when a group called TUSK, or Tell Utilities Solar won't be Killed, was launched by public relations person Jason Rose.
TUSK pushed to preserve net metering, a system where utilities give customers with solar on their roofs a one-to-one retail credit for each unit of energy that their panels send to the power grid when the energy isn't being used in the home.
APS was seeking changes to net metering that would have reduced the savings solar customers get by installing panels.
In 2014, Republican candidates for the Corporation Commission — Vernon Parker and Lucy Mason — were supported by TUSK, though they said they didn't ask for the support. They did, however, attend a solar rally organized by the group.
APS previously had declined to get involved with races for the commission. But then, a group calling itself "Save Our Future Now" mailed voters fliers that criticized Parker for previous troubles with the Small Business Administration and a failed congressional campaign.
Parker and Mason accused APS of funding the group.
APS would not acknowledge doing so, but said in a letter penned by Executive Vice President Mark Schiavoni that APS could no longer promise its money was not involved in the campaigns.
The race was contentious. A solar-leasing organization ran TV ads that portrayed Little as a Pomeranian "lap dog" to APS.
But the other two Republican candidates, Forese and Little, defeated Mason and Parker, and went on to defeat Democrats Sandra Kennedy and Jim Holway in the general election.
Forese and Little got $3.2 million in dark-money help along the way from Save Our Future Now and the Arizona Free Enterprise Club. It was not immediately clear where the other $7.5 million was spent.
While APS was widely suspected of contributing the money, it was not confirmed until Friday's response to the commissioners.
But many people tried over the years to expose APS as the source of the dark money.
The following year, a public records request from a clean-energy group revealed that Republican commissioner Bob Stump had texted extensively with an executive at APS, Forese, Little, and the president of the Free Enterprise Club.
It would violate election rules if Forese and Little coordinated with the nonprofit over the money it was spending to help get them elected, and all of the participants denied there was coordination.
The content of those texts had been deleted. A judge who reviewed what was recovered during a protracted court battle determined the contents were not public records and they were never publicly disclosed.
Watchdog reacts
The San Francisco-based Energy and Policy Institute, which advocates for renewable energy and also can be considered a dark-money group because it doesn't disclose its donors, has frequently criticized the Corporation Commission for being too close to APS.
"I can't say I'm shocked because this is what everyone suspected all along," said EPI's Executive Director David Pomeranz of Friday's disclosure.
"Just because I'm not surprised doesn't mean we shouldn't be outraged by it. It is such a basic perversion of government, and unfortunately, they got away with it. It's not even a euphemism. They were trying to buy their regulators."
APS faces backlash
The foray into dark-money politics has come back to haunt APS.
Forese, who was unable to escape the cloud cast by the dark money spent to help him, lost in the Republican primary last year. Little took a job in Washington, D.C., before the end of his term.
Not only did Kennedy return after her 2014 defeat to win the most votes in last year's election, but all the 2018 candidates from both sides of the aisle discussed the need to crack down on the utility and it's rates.
The commissioners launched the investigation into APS political spending, along with a separate investigation into the companies' earnings. And a customer complaint over the fairness of APS rates is scheduled to be considered this year.
Kennedy and Pomeranz both said they are eager to dig through the hundreds of pages of documents from APS to see what else they might reveal.
"I'm glad that they did respond and am just looking forward to diving into it," Kennedy said.
