Journalists’ Roundtable 06/10/2016

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Join us as three local journalists bring you up to date on the news of the week.

Ted Simons: Coming up next on "Arizona Horizon's" Journalists' Roundtable, some lawmakers with second thoughts after signing an APS letter that was later used in a rate hike request.

Ted Simons: And questions over the secretary of state's handling of election procedure manuals. The Journalists' Roundtable is next on "Arizona Horizon."

Ted Simons: "Arizona Horizon" is made possible by contributions from the Friends of Arizona PBS, members of your PBS station. Thank you.

Ted Simons: Good evening and welcome to "Arizona Horizon's" Journalists' Roundtable, I'm Ted Simons. Joining us tonight, Rachel Leingang of "The Arizona Capitol Times." Howard Fischer of Capitol Media Services. And Luige Del Puerto of "The Arizona Capitol Times."

Ted Simons: Some lawmakers who signed on to a letter from APS are not amused to find out that the utility included the letter in a rate hike request. What in the world is going on? What is this all about?

Rachel Leingang: So APS last week asked for an 8% increase to the residential rates and a major change to how their assessing those rates. And in this rate case docket they included a letter and the letter is milquetoast. It says utilities are important and we ask the commission to weigh all the proposals before them and do their job and 130 elected officials, nonprofits, chambers of commerce, signed on to this letter but some lawmakers told me that they didn't know that this was going to be submitted as part of the rate hike and they were sort of I guess misled. They didn't know that the implication might be there, that they would support the rate hike and they weren't happy with that.

Howard Fischer: And that's critical. If you're going to go to a lawmaker, if you're going to go to any political official and say please sign this we're asking for a fair hearing and not bother to tell us oh, by the way we want to take your constituents and screw them to the tune of 8% and we want to put demand charges on top of that, of course you're going to have some unhappy lawmakers, county supervisors and you don't play fast and loose and to add insult to injury, then APS sends out a little note telling the lawmakers if you get any inquiries here's how you should handle this.

Ted Simons: What is that all about?

Luige del Puerto: So I think APS is really feeling a little bit defensive about this because the blowback is quite harsh, if you will. So APS sent out this talking point, if you will, and now they're saying look, the letter is harmless. It asks the commissioners to be careful, to be fair, and to do their jobs and it was never meant to support the rate increase. Of course, for some that's really disingenuous.

Ted Simons: If it's harmless and it was never meant to support a rate hike, what's it doing in a rate hike proposal?

Rachel Leingang: Right and they also submitted in a value of solar proceeding, they put it in both of them but why would you gather 130 signatures if you're not looking for some sort of support for what you're trying to do? It may not be for the rate hike but support for the hearing, the idea, for APS and utilities in general.

Howard Fischer: And what's really important is these rate hikes, the commission is in many ways a judicial proceeding. Look at the merits, there's some squeeze room in there in terms of how much business, how much residences play. This all irrelevant. This is meant to sway opinion. It's meant to say yes, you may believe this but by the way, we've got all these folks in here, many of them Republicans, curiously enough, in an all-Republican commission, saying you really ought to pay attention to what APS is saying.

Ted Simons: It's interesting, among the state lawmakers it looks like there are more Democrats than Republicans that actually signed on to this thing.

Luige del Puerto: Right, APS has democratic support in the state legislature. We've seen their bills that some would consider to be quite controversial get passed out of the legislature, you know, with unanimous support, for example, but, you know, what's really interesting is that now APS is saying this is what we're trying to avoid, that the stories now about this letter that we sent out that's just harmless, that's just asking the commission to be fair and balanced and consider our responses and, you know, now that's the whole story and to me, I'm like really?

Rachel Leingang: And in the talking points as well it said solar city and its surrogates were pushing the media to call people. We never talked to solar city about this or their surrogates. We just saw the letter and like you said it was signed by a lot of Democrats which we thought was a little bit odd so we started calling to see if people knew, if they were okay with signing it, if they had any misgivings.

Ted Simons: APS wants a demand charge included with an 8% rate hike very quickly. Explain exactly what APS is asking for here.

Howard Fischer: Well, the 8% is by definition a percentage hike but the more interesting thing is the demand charge. This isn't unusual for businesses, if you run a major plant and you say I'm going to have this piece of equipment working and not that piece. For home-owners it means you come home, okay, you turn on the air conditioning, you open up the refrigerator, that kicks on and if your pool pump comes on, it doesn't matter that the whole month you've kept your usage low, you have that spike and your rate is going to be based on that spike, never mind how well you did the rest of the time and that's a major change, I don't think there's any major utility in the country that does that for its residential customers.

Luige del Puerto: And A.A.R.P. is really concerned about this proposal, they're saying there are seniors, senior citizens that may not necessarily know how to manage their electricity as well as they should, if you put them on a demand rate and it's based on that one hour in the one month where your energy usage is spiking.

Ted Simons: The reason for that is?

Rachel Leingang: They say it better aligns with how they are to plan for power -- they have to have the amount of electricity they need at the highest time during the hottest month so they're saying people should have to operate under the same rules.

Howard Fischer: Here's the deal. There's a simple way of handling that. I'm at a time of day rate and I know from 1:00 p.m. to 8:00 p.m. if I turn on something I'm paying 23 cents a kilowatt hour. Huge amount. s guess what? I'm not going to use during that high demand.

Ted Simons: That's my point. Yes, what you are saying there makes sense, and I think most people think along those lines, but the idea of just one day some folks came over and the refrigerator door was left open and all of a sudden that one day now means your entire -- that doesn't make any sense.

Luige del Puerto: And even Debbie Lesko by the way, an ally of APS told us that look, I'm having a real problem with this kind of a system. And she mentioned before that her husband was in a demand charge system and I couldn't use the hair dryer and the clothes dryer. I couldn't live with that and so now, you have allies of APS questioning this system and saying I'm going to have to stand up for the people in my district and in her district by the way you have senior citizens over there, sun city and that part in Peoria.

Howard Fischer: If you want to make it optional, that's fine. It's like time of day rate. My mother didn't have a time of day rate because she was home all day. She didn't want to have to worry about being warm during the afternoon. I can control things, there's timers on everything, on my hot water heater. Fine. That's a way of doing it, if you want to manage demand and here's the really interesting thing. The peak demand, these peaks tend to be in the middle of the afternoon, which is when you're going to be generating a lot of solar which they're trying to undermine by paying the solar customers less for their electrons.

Ted Simons: It sounds like we had a little bit of a problem there, kumbaya no more?

Rachel Leingang: They are suspended for now. Suspended, I don't know if they're going to come back. They didn't say definitely we're not doing it but the same day they met was the same day that APS dropped this major rate case, which is harmful for solar so... Maybe they come back, maybe they don't.

Luige del Puerto: There has always been skepticism, if you will, and perhaps cynicism, people have always been a bit cynical that they could come together and produce this, you know, agreement, if you will. What both sides had avoided or, you know, the whole point was to avoid the nuclear option we had discussed before it is one side saying we're going to put net metering into the state Constitution and the other side said we're going to put you under the Corporation Commission which would be unpalatable for both so they avoided that and I guess the fight goes on.

Ted Simons: All right. The fight does go on. Howie it sounds as though the FBI knocked on the door of a former Corporation Commission chair.

Howard Fischer: Yes. You know it's not a good day when the FBI is at the door in the morning. Gary pierce was elected commissioner in 2006 and again in 2010, retired 2014. What's interesting is there were a whole bunch of allegations that were raised having to do with the 2014 election. Not so much involving him, although there was some issues about whether he had met secretly with APS executives but his son, Justin, was running for secretary of state that year and there were a lot of questions about whether Gary was perhaps putting pressure on folks who might have business on the commission to provide a little bit of extra money for Justin's campaign.

Ted Simons: And some of those suggestions were coming from an opponent?

Luige del Puerto: So one of Justin's opponents was Will Carden and he ran on this thing, if you will, that Justin and his dad are using the dad's influence to curry favors, if you will, with supposedly APS and other folks to make sure that Justin's campaign is supported and both sides denied that and said, you know, there's no truth to it, this is just campaigning, it's a dirty campaign. And this is what we had to deal with.

Howard Fischer: And look the fact is any time there's money involved you're going to have these inquiries. Let me tell you how deep this goes. When the attorney general first started looking at this because this started out as a state investigation, Mark Brnovich had to take himself out of it and the reason was that Brnovich had gotten money from the Republican attorney generals association, $2.9 million of which $400,000 came from Arizona public service. So there's plenty of money around here and plenty of questions about who is influencing whom?

Rachel Leingang: Pierce said they came in and asked questions, they're trying to clear things up, the rumors are politically motivated, they're just doing their jobs here and it seemed like he had a sunny outlook on it somehow. Normally, like Howie said when the FBI is involved, it's not to come and say hey, what's up, let's talk about this thing that happened. It has more depth to it than that.

Luige del Puerto: When I talked to him this afternoon he said they came, they were cordial, polite, I was cooperating with them. They didn't serve me any document or anything like that. And what it confirmed is that their questions were about the 2014 elections and he confirmed that he wouldn't provide any context for it that the FBI agents had asked him not to talk about it but he did say at the end is there anything else you can add and he did say that the investigation itself is not politically motivated, but the source for the investigation, the people that might have created whatever caused this investigation was politically motivated.

Howard Fischer: Politics involved in somebody saying investigate someone else? The other piece of it, of course, is that we also know that the U.S. attorney's office has been in contact with APS. Exactly who? We're still waiting to find out. So you know, some Friday night we'll be sitting around the table and we'll decide, you know, who's guilty.

Ted Simons: And we'll be wondering who's knocking on your door.

Howard Fischer: Yes, exactly.

Ted Simons: Rachel, why can't secretary of state Michelle Reagan stay out of the news? [ Laughter ]

Rachel Leingang: Very loaded question because all of us exist. There's an election manual that comes out in every election cycle or has for the past decade that basically tells people at the county level how to run those elections, how to do early voting, how to manage people when they come in, things like that, basic facts about an election and she didn't do it. They elected not to do it for the 2016 election, which is obviously a pretty big election, so they're operating with the 2014 election manual, absent any potential changes that could have happened in law since then.

Howard Fischer: What's fascinating is if you can look at the law and, you know, you get three or four opinions, it says that a manual shall be issued ahead of each election. Now, we assume election means the election cycle, not the four elections we're having this year and Michelle Reagan's argument is well, it doesn't mean we need to do a new one. Wait a second, didn't the laws change between 2014 and 16, ballot harvesting, stuff about dark money and the rest of and the argument is we don't have it. But that ignores one other point. The law also says that this manual has to be approved by the attorney general and by the governor. If you have nothing new, you're not giving the attorney general a chance to take a look and say you did it right or wrong.

Ted Simons: She's saying that the law says this manual -- and these procedures must be in place, not necessarily revised. That's not what the statute says.

Luige del Puerto: Let me read to you what the statute says, such rules, talking about election rules, shall be prescribed in an official instructions and procedures manual to be issued not later than 30 days prior to each election and prior to its being issued the manual should be approved by the governor and the attorney general and the secretary of state shall submit the manual not fewer than 90 days prior to the election. There's no ambiguity there. It must be done.

Howard Fischer: But you still got the question of can she slap a 2016 cover page on the 2014 manual and say look I've done that? You have a problem with this. If you take Reagan's argument that we can just use last year's and say it's good enough, well then the law has no meaning. We could take the 1964 manual and say that's good enough.

Ted Simons: If she were to do that, hypothetically, you still would have the attorney general theoretically and the governor's office maybe looking things over saying what happened to X., Y. and Z. we just passed? There's a reason for this.

Howard Fischer: One assumes there's a reason for it. It was put in the law for a reason, you know. Statutes have purpose. Any attorney will say that you have to assume that the people who crafted the laws did it for a reason. Okay. What was the reason?

Ted Simons: Now, we have a possible lawsuit? I think we do one. Did he file, right? He sent a letter okay.

Howard Fischer: Essentially what Ryan is saying is he's asking attorney general mark Brnovich to direct her to do it or sue her or he will sue and tom Ryan basically put a lot of pressure on folks, the whole fight over the 200,000 missing ballot brochures, he's waiting for Brnovich to say what he's going to do, originally, we thought this afternoon we would have an answer, and now, it's going to come next week.

Luige del Puerto: The interesting thing about this one is the publicity pamphlets, that controversy, Brnovich's office reviewed what happened and said she broke the law but there's no remedy, there's nothing in the statutes that say she should be penalized this way for breaking the law. In this case, tom Ryan, the attorney who had filed the complaint with the attorney general's office is saying the laws say that if you are an official elections officer and you deliberately did not do what is asked of you to do then that's a class six felony and if that's the case, if Reagan is facing a class six felony, then it creates all sorts of trouble for her. If Brnovich's office would proceed.

Rachel Leingang: If you're convicted of a felony you can't hold office. This could be -- I mean, let's assume I guess in this case that Brnovich does do something, it could be a really big deal for her. And I'm sure tom Ryan, the perpetual thorn in the side of the secretary of state's office would like that remedy. He's saying she's consistently not done what she's supposed to do and the record supports that.

Howard Fischer: The real -- I think the best thing actually for the attorney general to do is he's already appointed a former federal prosecutor to look at the earlier one and say what went wrong, are there violations and how do we keep it from happening again? Okay you've got a federal prosecutor, former federal prosecutor and they're looking around to figure out gee as Brnovich called the operations of the office a goat rope, maybe we need to take a look at this piece of it and just combine it all and come up with some recommendations because if the law has some ambiguity and we need the investigator to come in and say here's how you need to fix that section of the law.

Ted Simons: And again, this is something that Michelle Reagan says it's not the appropriate time to do this, not a prudent time to retrain workers.

Howard Fischer: Give me a break. I talked to ken Bennett. He served for six years prior to Michelle Reagan and ken said yes, you shouldn't be doing this election year. Why the hell do you think I did it in odd numbered years?

Ted Simons: I don't think he uses that language.

Howard Fischer: There may be some people running against him.

Ted Simons: Before we go on this show, though, it sounds like the attorney general kind of made it official, not going to block prop 123. The Jeff DeWit threats of lawsuits are here.

Rachel Leingang: The teachers then who were told they were going to get raises if prop 123 passes will get those raises hopefully if their local districts decide to do that because the money is able to be released. There's no personal liability for the board of investment or DeWit.

Howard Fischer: But also understand what he didn't say. One of the questions that DeWit asked and the investigations board asked is do you need to amend the enabling act, the law that gave Arizona the 10 million acres in the first place and because there's a federal court lawsuit pending on that, Brnovich or John Lopez, the solicitor general said we're not going to opine. So based on that, feel free to go ahead because the law is presumed to be valid, but we're not going to tell you whether, in fact, that lawsuit has merit.

Ted Simons: And that's the biggie, Luige. That's the one everyone was saying you've got to go to Congress first but other folks saying no you don't and, no, you don't won the day but will it win the court?

Luige del Puerto: And the attorney general's office completely side stepped that question and said lets the courts handle it, it's the same question that's being presented to us, let's let the courts deal with it, the more interesting question now for me in the letter that Jeff DeWit has asked the attorney general's office what about the charters? The charters that get money from the land trust, what about them? Because it says only government entities are supposed to get this money. She asked what about charters? They're public schools but they're not government entities and the attorney general's office said they're going to get their money, you're not going to be held liable unless there's a contrary opinion by the court at some point in the future.

Howard Fischer: And the point was they said look charters have been in Arizona for 21 years, they're public schools but they can run by private, for-profit corporations and what the solicitor general said was look nothing in prop 123 changed that. So since they've been doing that, I mean unless you want to do a broader opinion of whether they've been getting money illegally for 21 years we're going to assume they're eligible for the new money.

Ted Simons: We'll stop it right there. Good discussion. Good to have you all here. Thanks for joining us.

Ted Simons: Monday on "Arizona Horizon," an update on the state's wildfire season, including the latest on the Tenderfoot Fire near Yarnell. And a new report looks at the issues faced by homeless youth in Arizona. That's Monday, on "Arizona Horizon." Tuesday, we'll check out the winners of the Arizona innovation challenge. Wednesday, Phoenix hosts a national rail conference. Thursday, we talk with DES director Tim Jeffries. And Friday, it's another edition of the Journalists' Roundtable. That is it for now, I'm Ted Simons, thanks for joining us. You have a great weekend.

Video: "Arizona Horizon" is made possible by contributions from the Friends of Arizona PBS, members of your PBS station. Thank you.

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