Clean Elections Debate – Republican Candidates for Corporation Commission

July 20, 2010

Transcript:

Ted Simons: Good evening and welcome to this special edition of "Horizon." I'm Ted Simons. This evening's show is a debate sponsored by the Citizens' Clean Elections Commission. Tonight we'll hear from the Republican candidates vying for two open seats on the Arizona Corporation Commission. They're all former state lawmakers. In alphabetical order -- Brenda Burns, who served four years as senate president. Incumbent commissioner Gary Pierce, who's completing his first four-year term on the commission. And Barry Wong, an attorney who served on the commission for several months in 2006 after being appointed by the governor to fill a vacant seat. Each candidate will have one minute for opening and closing statements. Earlier we drew numbers to see who goes first. And that honor goes to -- Gary Pierce.

Gary Pierce: Thank you, Ted. It's a pleasure to be here. It's been my honor to serve you on Arizona Corporation Commission for the last three and a half years and I'm seeking to represent you for one more term. I've had the wonderful opportunity to be in business, to serve as the county supervisor in Yuma and the state legislature as the majority whip. My background in business allowed me to employ many people and sign both the front of a paycheck, as well as the back, and I've had the great honor of being married to my wife, Sherry, for 37 years. We have Four sons, all eagle scouts. I was a tax cutter at the legislature, as a county supervisor and held your rates as low as I can and voted no on plenty of rate cases. Like I said as I opened, it's a high honor to support you and a pleasure to be here tonight and I look forward to the questions so I can prove I deserve another opportunity to serve you at the Arizona Corporation Commission.

Ted Simons: Thank you very much. And now Brenda Burns has one minute.

Brenda Burns: Good evening, my name is Brenda Burns. I've lived in Arizona since 1969 and I've had the great fortune of raising a family and having a business in this state and when I went to the legislature in 1987 and served through 2002, I had the knowledge and experience of understanding what regulatory policies and tax policies government entities put in place how they affect a business, A business' opportunity to meet payroll and create jobs and make a profit. When I was in the legislature, I chose to work on regulatory reform and tax policies and received an award from the small business administration for being a leader in regulatory reform. I haven't run for anything in 8 year, And I appreciate it very much the support of my peers in electing me house majority leader as well as senate president twice. And after 8 years of being away from the state legislature and watching what was going on with the economy and understanding we need to improve it, I decided to run for the commission because I'm convinced that the rates that they set with those policies will have a significant impact on our futures.

Ted Simons: Thank you very much. And now Barry Wong has one minute.

Barry Wong: Yes, thank you, Ted, again for the opportunity to be here today. And I am Barry Wong running for the office of corporation commission. I'm a native Arizonan and my parents and grandparents are both immigrants from China immigrating to America in the early '50s. I was fortunate to be educated in the public school system here, I have a degree from ASU in accounting and law degree at U of A. I returned to Phoenix, after my law studies and ended up serving in the state legislature for four terms. After term limits, I returned to the private sector and in 2006, as you said, I was appointed to the Corporation Commission, where I served -- actually involved in all facets of the commission work and pleased and honored to have served a term there. Critical issues I see serving on the commission, which I look forward to serving if elected, are energy, rates and water. Very Critical issues and I look forward to discussing that further as we proceed this evening. Again, Barry Wong for the corporation commission.

Ted Simons: Very good. Thank you all. Gary, start with you. The jurisdiction, the function of the Arizona Corporation Commission, what is it as you see it?

Gary Pierce: We're constitutionally driven, as you know. And we set rates at the commission. We have Exclusive ratemaking authority. Under the constitution There are permissive authorities we have and we have some statutory duties. For instance we do Line sighting, which is statutory, a power plant sighting which is statutory. Like I said rates are constitutional and that's phone, natural gas. Water as well as electricity we also regulate securities, we have a securities division so we investigate fraud. We license securities agents and their products and do all LLCs, incorporation, about 4400 LLCs a month here in Arizona. It's a very busy organization.

Ted Simons: Too busy? Should some of these responsibilities be shifted somewhere else?

Gary Pierce: I think we handle them fine. I do believe in the future we'll look at some deregulation, but that would be something that I think we do in policy thought with the legislature and others.

Ted Simons: Brenda, how do you see the commission and should some functions be moved elsewhere?

Brenda Burns: The only thing that comes to mind -- understand there are certain responsibilities that the commission has under the constitution and then responsibilities that's been added by the state legislature. The one thing that comes to mind and might be minor in the scheme of things. If you want to file a business, not a corporation or LLC, you have to go to the secretary of state's office and that's a little bit confusing to the general public. They might go to the secretary of state's office thinking they can open there corporation or vica versa. It would be nice, not suggesting we shift one or the other, but maybe have integration so that if people show up at the wrong place they can still maybe go online or something.

Ted Simons: Barry, should some of this responsibility be moved elsewhere?

Barry Wong: Yes, when I served on the commission, it's a professional organization, and I can't say enough about the professional staff there. They do a fantastic job. The unfortunate part, we don't have the funding to pay them the appropriate salary that they deserve. So you have a lot of defection of staff because you can't blame them for feeding their family. Let me say this, the corporations division, When you file for a corporation or LLC, my concern is -- we're in a dire budget straits so I understand the cuts. But if we continue to cut the funding for corporations and prolong the time to approve filings, that could impact the economy and economic development. So if necessary, And I'm not saying we should do that today. I think we should look at privatization of some of the corporation functions, like the MBD does, working with private sector

Ted Simons: What do you think of privatization?

Gary Pierce: It should be explored and for different activities. I know this: There are things we can do differently. I think that probably, there's some thought that maybe the department of transportation, ADOT, can do rail safety. We do rail and pipeline safety. And one thing to make note of, we're not governed so much by general fund. The legislature does the appropriations, but our funding, we're self-funding. It's just that they raid those funds and sometimes we don't have the money to do our function. Not that there's not money there, it's just that it's being diverted.

Brenda Burns: There are a number of reforms, we should look at. We can go a long way with just bettering our use of technology. A lot of things that can be done online. With the plan siting and even the commissioners and filings. Many can be done electronically. We have a serious problem with regulatory lag at the commission, which cost the companies money and that gets passed on to the ratepayers. If we can shorten time frames and find way to streamline processes, again, with regulatory reform, the type of thing I like doing at the state legislature, we can go a long way in helping the ratepayer.

Ted Simons: Barry, I want to talk with you on the next one. Renewable energy standards. RES, to cut it short. Should it stay or go?

Barry Wong: RES, I was one of the votes that ushered in the standard 2006. I was proud of the decision It was the right decision at the time and today. We must preserve and protect it and keep intact all aspects of it. Including the rooftop solar.

Ted Simons: This is a requirement for utilities. 15% by 2025, renewable energy. Again, is that an adequate thing for the corporation commission or something they should be involved in and should it stay or go?

Gary Pierce: I think the mix of electrons is something the corporation should be involved in. I think we have to look at all of the resource mix. Including nuclear, natural gas, clean coal technologies as well as renewable energy. The renewable energy standard is actually being exceeded in some areas like APS. Not 15% yet, but on track to do more so. But in some of the areas that don't have economies of scale, it's not moving as fast. So I look forward to being able to balance that and make sure we're at 15% system wide. Even though recognizing some of the small co-opts or utilities such as UNS electric, we may have difficulty reaching it as fast as we will aps.

Ted Simons: Good or bad?

Brenda Burns: We're on track and as commissioner Pierce mentioned, I think we will exceed it. The technological advances continuously bring the costs down so they can reach their goal and actually compete on the open market without mandates or things like that. Costs are coming down and we're told that's going to continue. But we need a mix of energies and I see you want to go somewhere else but I want to stay on this subject.

Ted Simons: I want to - I wanted to asked something else about this. Would you lessen the standard? Would you increase the standard? Would you alter the standard in any way?

Brenda Burns: No, I think we're on track to where we need to be and with the right technological improvements watching the bottom line of course, for the bottom line for ratepayers, they have a economic and environmental benefit, I think we'll exceed it without having do anything else. Implementation rules have to change sometimes, they've already made a number of changes, But the rules and percentages seem like it's on track but it's important to look at a broader scope and understand that renewable energies have a part it play but wecan't ignore the others as well, because we have a growing population we need to take care of.

Ted Simons: Would you alter RES?

Barry Wong:It should stay intact, I would not alter it, but I would consider adjustments or potentially increasing it if warranted. But again we have to see where we are in terms of the current standard and where we are in implementation. I would challenge the opponents that support the renewable that there's a part called the distributed, which is rooftop and I'm committed to that, others, including my opponents are concerned about the costs and I don't think they're committed to that.

Ted Simons: Want to respond?

Gary Pierce: that's Probably not a fair representation. And let me just talk about the renewable plan itself. Because it is written into the plan, the ability to make adjustments. That's part of the plan and those adjustments are made each year and the implementation each year is different so allows us to look where we've been and where we're going. What's really happening now is because of marketing by the companies and somewhat by the utilities, but I believe by the companies that sell solar, we have seen the price come down because it's over-subscribed and seen our incentive that's offered through -- that's collected and offered through the utility come down and seeing more volume and less expense to the ratepayer which is really what is driving this and why we're going to have so much.

Ted Simons: You mentioned movement of electrons as your business. Do you consider nuclear energy as renewable and something that utilities can use to comply with RES?

Gary Pierce: We can look at renewable energy in a lot of ways but this plan does not focus on nuclear and if you're going to add something into the mix, you have to make adjustments to the number. I think nuclear should stand on its own. I think when it's time to look at nuclear, you have to look at the cost and at the science and math and see if that's where we want to go. As I said, I'm looking for the best deal for ratepayers.

Ted Simons: I'm asking the question, Brenda, because there was a bill making its way through the legislature that died a quick death but made a lot of noise in the process. It would have included nuclear energy as part of the renewable energy standard. What do you think about that?

Brenda Burns: First, I do think that distributed generation, having to carve out for it, is important. And from the standpoint of nuclear being considered renewable, for the purpose of 15% renewable energy standard, it doesn't work. We have a plan in place and need to work with the state legislature and decide what our energy policy is moving forward. we've got and need to stop combating between the commission and legislature. That does not bode well for the industry. They need certainty, they need stability and we need to work with the legislature and design what our energy policy is moving forward. We have a population that's going to grow to 10 or 12 million by 2030. We have a lot of plans to make.

Ted Simons: You said work with the legislature. You would listen to the legislature giving them more authority than it has now over these types of situation?

Brenda Burns: No I'm saying we sit and talk about what energy plan are we going to have moving forward for the state. How we are going to have productive industry in the different energy proceses, renewable and other. What the goal is and how we get there, each utilizing our constitutionally mandated areas and some overlap and we simply have to work together to define that. The industries are going to be happy if they see a joint moving forward and not have to worry about the ying and yang.

Ted Simons: Stability, very important to the industry. First of all, do you consider nuclear energy renewable energy and secondly, to the points we discussed, how much more if any responsibility should the legislature have in these programs.

Barry Wong:I support nuclear energy as well as clean coal and natural gas as part of the overall energy mix to avoid brownout OR blackouts. Having said that, do I not think the nuclear energy nor hydro should be part of the renewable energy standard. That should be separate and apart from it. But from the legislative point of view, I don't think this Corporation Commission created by the constitution should cede any authority to the legislature. We're separately created by the constitution and when I was in the legislature, I was proud to be a champion of legislation on tax credits. For example, on renewable energy solar, etc. So there's a space for them. Including overseeing SRP, to engage in energy policy.

Ted Simons: I want to give you a shot on this, the dynamic between the legislature and Corporation Commission. Should the legislature have more of a say in these things like RES?

Gary Pierce: We are the only commission that has created an RES without input from the legislature so I see how they feel, other states have done it from legislative directive and certainly the legislature has done a lot in -- they have subsidies and incentives and created an incentive that brought us a photovoltaic manufacturing plants. So there is a lot of opportunity but I think it should be, you talk about HB 20701, I'm the only one here who voted on it as a commissioner whether we wanted to support that or not at the legislature. And by 5-0, all five commissioners voted no to oppose that at the legislature and a lot had to do with what they were adding into the renewable mix and, I believe if the commission wanted to account for nuclear and hydro, they would have made that number different at the time.

Ted Simons: Would you have voted no on 2701? Not to support it.

Brenda Burns: Yes.

Ted Simons: You?

Barry Wong: I would have opposed legislative effort that would have encroached the commission's sphere of influence.

Brenda Burns: I will tell you this, as a result, there's meetings going on, the sponsor of the bill and having meetings with the renewable energy industry that's been productive its turned out to be something useful in the end because they're learning a little bit more about the environment and so on.

Ted Simons: I want to move on to solar service agreements and the idea of, you know, the solar companies also selling power. But not necessarily being regulated by the commission. What do you think of that idea?

Brenda Burns: I think that the commission -- I was glad to see the ruling of the commission. The SSA-- it's simply a funding mechanism to utilize the opportunities in place to be able to -- you know, I could not believe there could be a possibility they would want to regulate them like utilities. It simply would not be right. It's an industry that's booming, a choice that people have, some competition. It would be disastrous.

Ted Simons: critics say You sell power, you need to be regulated. How do you have respond?

Gary Pierce: Sure, but I have an ex parte issue with that. There's a time clock that I can't talk about this. Because we just did it. And there's a threat of a lawsuit by one of the utilities that we don't regulate. So -- but, I voted -- a matter of public record that I voted to make the statement and rule they are not a public service entity that needs to be regulated.

Ted Simons: Ok. SSAs, what do you think?

Barry Wong: I support the decision of the commission. When I was there in 2006, that's the creative thinking and mind that's I anticipated and gave the benefit of the doubt to the industry and marketplace. And they responded. This is fantastic. That's why you see a quantum leap in the advance of solar and renewable energy in the last years. And I support lower regulation, not more regulation from the commission and also the benefit of the doubt according to the constitution is that the government -- governmental body passes a law is presumed to be constitutional unless challenged by a court of law and decides it's otherwise.

Ted Simons: Running out of time. But couple more questions. I got to get to you, Barry, and have you respond to a controversial statement you made not providing utility service to undocumented immigrants. Explain your position.

Barry Wong: Thanks for asking that question. This is not something that I woke up one morning and said I'm going to make this statement. This was a question posed by an Arizona Republic Reporter to all of the commission candidates when interviewing the candidates and I pondered it and gave great thought to the question whether the illegal population has an impact on the infrastructure of utilities and the answer is yes. It emanates from the rate making authority that the constitution grants to the corporation. I think the illegal population has an impact on rates and at least initially we should deny new power hookups to illegal immigrants as a first start, but on the back end for existing services, that's a tough question but we need to ponder and give it more study and thought.

Ted Simons: What are your thoughts, Gary?

Gary Pierce: I thought about it as a legislator as how we came up with policies at the legislature and there was quite a few dealing with immigration and illegal immigration. We went to the ballot a number of times. But I look at the legislature as defining what's going on with illegal immigration and how we operate under the constitution, if the legislature says, look, we want you -- utilities, we want you to check every customer. Because they're not -- obviously, they're not going to say check certain customers because they don't want to be accused of discrimination. So check every customer. What the utility do is come to the commission and say, ok. We need rates because we developed this program so we can do this and need to recover that. So I'm not sure -- because I've not seen any plan in writing on this, I just know how the -- how the dots connect and the legislature sets policy and usually want it to be a statewide policy. What do you think?

Brenda Burns: First, I have a long history on the immigration issue at the state legislature and being concerned on the economic impact on schools and AHCCCS and so on so I understand there's an economic impact and the legislature understands that. I don't know what the plan is. The plan seems to morph. So I'm not sure what the plan is. We hear different things from Mr. Wong here depending on which day it is. I don't know what it would cost the ratepayers but I know the commission does not regulate SRP, municipalities and I don't know it would work. Again, I haven't seen the plan, but you would have people moving to different territories. The biggest thing is that I'm a supporter of 1070, most Arizonans are. And my biggest concern is that this proposal, which I don't think has been well thought out, could potentially work against the progress on 1070.

Ted Simons: We have to stop it because we have to have time for one-minute closing statements and it's time for each candidate to give a one-minute closing statement. We start with Barry Wong.

Barry Wong: Thank you for the opportunity. I'm Barry Wong running for the office of corporation commission. I bring to the table my experience on the corporation omission having been involved in all facets of the commission work. Critical issues that need to be addressed in AZ, that I will address. Energy rates and water. Things we take for granted but must have to survive and also the illegal alien issue, is that that's defensible because we have to send a message to the illegal population. If you come to Arizona, you may not have utility hookup. Maybe that will discourage some from coming here. It's defensible, You can't have it both ways. We need to keep them on because they spread the utility cost but you can't have it both ways. So I'm Barry Wong. Look to being your eyes and ears on the commission and I've been called a friend of the ratepayer, im proud to hear that. And again Barry Wong running for Corporation Commission. Thank you very much.

Ted Simons: Next up with a one-minute closing statement is Brenda Burns.

Brenda Burns: Thank you for the time. When I was in the state legislature for 16 years, as I mentioned earlier, my peers saw fit to elect me three times to serve in leadership. Those are the people who I worked with and saw my dedication to the task at hand. I received a rating of friends of the taxpayers by Americans for prosperity It is not just a phrase. It is actually a rating and Two of us here have received that rating I'm very proud to have that. I understand from experience what it's like to raise a family, the needs of a family and have a business. I understand we need a competitive rate structure in this state if we're going to attract businesses and continue to grow the ones we have and let them be prosperous. I understand what it's like to be on a fixed income. I have family members who are. I take that with me as I understand my number priority is to protect the ratepayer and understand what is best for them. My name is Brenda Burns. Please go to my website, IBrendaburns2010.com. I appreciate your vote.

Ted Simons: And finally Gary Pierce.

Gary Pierce: What an honor to be here. My life experiences in business and as a father and husband and as a grandfather have taught me a lot of things that are important, but no matter what, I have always been one who has contemplated these issues that -- especially on rates and taxes. And those are things that are in my core. As a conservative, I look at things. Economic policy from a conservative point of view. That's how I've always looked at it. And that's what you can trust me to do in watching your rates. I too was rated a friend of the taxpayer by American for prosperity. Why? Because every time I'm going to look what it costs taxpayers and I'm going to favor them in making my decisions and you can count on that from me in the future just as I have in the past. I'm Gary Pierce for Arizona Corporation Commission.

Ted Simons: Thank you, Gary. And thank you all, candidates for joining us on this Clean Elections debate and thank you for watching this debate on this special edition of "Horizon." Hope you'll be back tomorrow at 7:00 p.m. for the democratic candidates for Corporation Commission. And that's it for now. I'm Ted Simons. Thank you for joining us. You have a great evening.