ACC Ethics in Question, says Former Commissioner

Aug 16, 2018

Democrat Bill Mundell served two terms on the Arizona Corporation Commission in the early 2000s.  Mundell says the ACC is a powerful entity in the state that people know little or nothing about. 

During an unsuccessful run for an ACC seat in 2016, Mundell told KAWC that Arizonans should be wary of the ethics of the ACC.  He tells KAWC’s Lou Gum it is even truer today.

Mundell says “things are much, much worse” today than they were two years ago.  He says regardless of party, people should be concerned about “the coziness of commissioners and the utilities they regulate.”  Mundell cites the indictment of the former chair of the commission last May, referring to the bribery case against Gary Pierce and his wife, Sherry. The case ended in a hung Jury in mid-July. Prosecutors dropped the case soon after.  Mundell says the charges show that calls of alarm two years ago were accurate in terms of what was going on at the ACC.

Mundell says Democrats had a strong presence on the ACC prior to 2012.  That’s when Mundell says Arizona Public Service and holding company, Pinnacle West, targeted his current running mate, Sandra Kennedy, who was elected in 2009.  Mundell says more than $3 million dollars in dark money was spent to defeat Kennedy.  In 2016, the amount was over $4 million to defeat Mundell and fellow democrat Tom Chabin.

“They did that because Sandra and I both had a history of standing up to APS and the other utilities and protecting consumers.  That was the whole reason the Corporation Commission was established in our state constitution in 1912, is to protect customers from unjustified rate increases by politically powerful utilities,” Mundell says.

"That was the whole reason the Corporation Commission was established in our state constitution in 1912, is to protect customers from unjustified rate increases by politically powerful utilities." - Bill Mundell

Mundell says the two most recent APS rate increases are examples of how “things have gotten worse.”  Last August the ACC voted to allow APS to raise rates despite, Mundell says, a recommendation from support staff that APS was over-earning and should keep rates flat, if not actually lower them.  Mundell says what was sold as a 4.5 percent rate increase later raised customer rates dramatically.

Recent customer testimony before the commission provides some evidence of Mundell’s allegations.  The Arizona Republic reports customers saw rates increases three times what the company predicted.  Critics said numbers reported by Pinnacle West to the ACC proved APS was making much more than it originally claimed the company would. 

Mundell says he and running-mate Sandra Kennedy called for a re-hearing on the August 2017 increase.  Later, a petition drive in Phoenix led an administrative judge to schedule a hearing in late September to consider rate-payer complaints. 

Meanwhile, Pinnacle West has another rate increase request filed with the ACC.  The company is seeking to cover its costs for environmental equipment installed at the Four Corners Power Plant in New Mexico.

“It never stops. It’s non-stop rate increases, and that’s because you have commissioners, as I noted, that were elected with APS money.  They’ve spent millions of customer money to get four of the five commissioners elected in the last two election cycles,” Mundell says.

Mundell says his criticism of Pinnacle West is focused on the leadership, not the “six thousand employees that keep the lights on and the air conditioners on when it is 115.”

“I’m talking about that very small upper echelon of executives that are making millions of dollars, have chauffeurs driving them around, have airplanes. It has really just gotten out of control,” says Mundell.

Mundell says he and Kennedy are motivated to get back to the ACC to protect consumers and ferret out corruption.

“Sandra and I know where all the dead bodies are. We don’t need on the job training. We can hit the ground running with our experience,” Mundell says.

Mundell laments what has been lost while Arizonan’s have been focused on the ACC’s relationship with APS and its parent company.  Mundell says what’s been neglected is a long term strategy to manage water and encourage conservation, as well as a comprehensive energy plan that includes turning the state into the solar capital of the world. 

“It absurd that we are not.  But what’s happened is the utilities have crushed rooftop solar in Arizona. Whether it is Arizona Public Service or TEP (Tucson Electric Power),”says Mundell. “And it is all about money.”

"It never stops. It's non-stop rate increases, and that's because you have commissioners, as I noted, that were elected with APS money." - Bill Mundell

Mundell says the most significant change over the last four years is the involvement of APS and other utility companies in state elections.  He says from the ACC’s creation in 1912 until 100 years later it was considered improper for utilities to get involved in commission races.

“They knew it was inappropriate and unseemly to do that, to elect the very commissioners that decide how much profit they make and how much customers are going to pay for their water and sewer, and electric, and natural gas, and if you have a landline.  That’s what’s all changed in the last four years, with the millions that APS and Pinnacle West have poured into electing commissioners that will do their bidding and vote for these unjustified rate increases,” Mundell says.

As Mundell travels the state, he tells people, even if they aren’t APS customers, they should be concerned about the company’s spending on Arizona races, including efforts to stop an initiative that would force them to reveal their political spending.  Mundell says the company is involved in every political race in the state, including the Phoenix mayoral race.

When Mundell spoke to KAWC in 2016, he said most people had heard of the Arizona Corporation Commission, but for all the wrong reasons. He says that is still true today.

“I’ve described it as the most powerful entity that most people in Arizona know little or nothing about. And I use the word ‘entity’ because it’s established in the constitution as a fourth branch of government. It’s not a state agency, it’s not part of the executive branch. It’s one of only thirteen states where the commissioners are elected statewide,” Mundell says.

"I've described it as the most powerful entity that most people in Arizona know little or nothing about." - Bill Mundell

Mundell is one of three Democrats on the Primary ballot. The others are former commissioner Sandra Kennedy and utilities analyst Kiana Sears.  Primary voters will send two names to the general election ballot.

Five Republicans are running in the Primary election.  They are incumbents Tom Forese and Justin Olson, and Rodney Glassman, James O’Connor, and Eric Sloan.

The primary election is August 28th.