Corporation Commission To Weigh Removal Of Energy Efficiency Standards

By Kristena Hansen
Published: Tuesday, November 11, 2014 - 12:36pm
Updated: Tuesday, November 11, 2014 - 7:50pm
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With the election now in the rear view, there are no apparent plans at the Arizona Corporation Commission to confirm whether the rumors that Arizona Public Service Co. was behind millions of dollars in dark money spending this past election cycle.

The commission does, however, plan to consider removing some energy efficiency standards that APS and other utilities have to follow within the coming weeks.

Republicans Tom Forese and Doug Little were elected to the Corporation Commission last week, defeating Democrats Jim Holway and Sandra Kennedy. Forese and Little’s campaign was controversial, largely because it benefited from more than $3 million in dark money spending since the primary.

APS, which is regulated by the commission, is widely believed to be the primary source of that dark money. APS has neither confirmed nor denied the rumors.

While APS didn’t break any laws, some say the utility did cross an ethical line and they question whether Forese and Little will be able to make important decisions at arm’s length.

One of the first decisions Forese and Little could make will be whether to eliminate a portion of the state’s energy efficiency standards. Last week, outgoing Commissioner Gary Pierce proposed doing away with the requirement that APS and other utilities have to make a 22 percent cut to the amount of power they sell to customers by 2020.

“The 22 percent we use by 2020 is aggressive, it was always aggressive,” Pierce said. “Utilities told us that when we adopted it... 22 percent is either too high or too low. It’s not exactly right. It’s a forecast.”

The standards were approved in 2010 and to meet the requirements set forth, utilities have spent millions of dollars every year in subsidies and rebates to customers for switching to things such as energy-efficient appliances.

But Pierce said determining the cost-effectiveness of the program is too subjective and many times the commission and the utilities don’t see eye to eye. So Pierce said he is proposing a more standardized process and, instead of the 22 percent goal by 2020, efficiency goals would be set every two years.

“I don’t believe this energy efficiency issue is going to be favored by the utilities,” Pierce said. “There may be certain parts of it they favor.”

But others, such as former Commissioner Renz Jennings, argue this is exactly what the utilities want. Jennings said there’s no evidence the current standards aren’t working and getting rid of them would be a mistake.

“The problem the utility has is they make money by selling electricity, not by saving it,” Jennings said.

He also said important issues such as this are exactly why Forese or Little should subpoena APS to disclose its political spending when they join the commission in January.

“He ought to commit to doing that if he expects to be trusted and not do this in the tank for the company,” he said.

Corporation Commissioners have subpoena power and a constitutional right to inspect the books, papers, business affairs and so on of regulated companies like APS. Currently, there are no immediate plans at the commission to exercise that power over APS’s political spending and there are disagreements as to whether the Commission should, or even could, do that.

“I talked to some attorneys and I don’t believe it works that way,” Forese said on election night last week at the Republican party in downtown Phoenix. “I believe that it’s more complicated than that, but I do have concerns about it. I’m the beneficiary of it.”

But Commissioner Bob Burns said it does work that way, and he’s still deciding what to do. But because, by law, Forese and Little, who ran with Citizens Clean Elections Commission funds, couldn’t have any control over APS’s political spending, he’s not sure what a subpoena would prove.

“I think there could be some perceived influence, possibly,” Burns said. “But that’s in the eye of the beholder.”

In an email to KJZZ, Commissioner Bob Stump said the commission’s power “to inspect the books of any public service corporation is limited specifically to the regulatory, rate-making process.”   

Commissioner Pierce said subpoenaing APS “is just a silly proposition,” and that APS has free-speech rights just like any other company or person and therefore wouldn’t respond to a subpoena.

“I don’t expect that to happen, because it would be a waste of time,” Pierce said. “It would be purely a political maneuver. You’re proposing a political maneuver. That’s all it is. Because nothing will happen.”

EDITOR'S NOTE: This article has been modified to reflect the standards being discussed are the energy efficiency standards.

Updated 11/11/14 at 7:20 p.m.

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