Corporation Commission Duty Changes

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Arizona Corporation Commissioner Andy Tobin would like to see some of the commission’s duties spun off to other state agencies. Tobin will discuss his ideas.

TED SIMONS: Coming up next on Arizona Horizon… state Corporation Commissioner Andy Tobin talks about major changes he'd like to see to the Commission. And State Superintendent of Public Instruction Diane Douglas will be here to discuss a variety of education issues. That's next, on Arizona Horizon.

ANNOUNCER: Arizona Horizon is made possible by contributions from the friends of Arizona PBS, members of your PBS station. Thank you.

TED: Good evening and welcome to Arizona Horizon, I'm Ted Simons.

Arizona Corporation Commissioner Bob Burns today issued subpoenas to APS and its parent company, Pinnacle West. It's an effort to find out if APS helped elect regulators charged with regulating APS and other utilities. The subpoenas require Pinnacle West President and CEO Don Brandt to turn over requested documents by September 15th and to appear in person to answer questions on October 6th.

Independent political groups spent $3.2 million to help elect commissioners Doug Little and Tom Forese in 2014. Many suspect that the money came from APS or Pinnacle West, a claim the utility has neither confirmed nor denied.

Another Arizona corporation commissioner, Andy Tobin, would like to see some major changes to the duties and responsibilities of the Commission. Joining us now to explain his proposals is Corporation Commissioner Andy Tobin. Good to see you again. Thanks for being here.

ANDY TOBIN: Thanks for having me.

TED: Before we get to all of these changes now, I need to get a response to these subpoenas.

ANDY: I'd love to--I'm the guy who's been telling him to do it for six months! I think he should have done it a year ago and got these subpoenas out of the way, and eliminated the distraction. He will have had his time to go through court, and I'm sure that that's the direction this is going to go. I think right here on this show just a few weeks ago, I said "give out the subpoena and let's move forward", which is why it's so disappointing. It has the appearance of timeliness, because he is running for office, he gets free media… I mean this is gonna be on the front page, I'm sure, and our hero, Bob, is out there fighting the dark money guys…

At the end of the day, we just talked about two years ago. We are only in the primary, and the only one who's gotten any independent money is Bob!

TED: But at least we know... we know where the independent money is coming from.

ANDY: Well it's the pot calling the kettle black. It is like, here we go, I just want to know if APS put money in the race. My view is, and we had this conversation, I would like to see utilities stay out of it all together. But utilities are not the only one with business at the Corporation Commission. It is important that the voters should know, though, as we are having this conversation about APS, none of the folks running have any APS money, nobody has any independent expenditure money, just Commissioner Burns.

TED: But at least it's transparent and we know where it's coming from.

ANDY: Well, APS might be transparent too once you get the numbers, but nobody is denying it. Let's assume they are right. What are we going to do?

TED: Well that's the point. Let's assume you are right and you find APS put $3.2 million and got Little and Forese elected, okay…or it was Pinnacle West. At least the information is out there. People can know.

ANDY: No, I agree, I agree. I mean I would love for them all to just stay out. At the end of the day, I will be the guy with the least amount of money in this race.

TED: And I asked the question, should regulation job positions be campaign spending funded by those that it is being regulated by?

ANDY: No, I don't disagree.

TED: Alright, I want to get to your ideas. Reassigning some functions here assigned to the Corporation Commission to state agencies… why this idea and why now?

ANDY: Thanks for giving me time. I watch your show all the time and see the political roundtable and the "power grab" conversations. And then it permeates… "This is a big power grab." Well, this is not a power grab--it's who I am.

I am always looking for efficiency in process. I did that when I was at Weights and Measures, and we transitioned some of those duties elsewhere. We made the Department of Insurance better--faster-- because we were coordinating with the Department of Financial Institutions, with our HR and other things. This is part of who I am.

You look for things that are signals. So when you have parts of our agency that are so critical, like Railroad Safety… 3,000 miles, Ted, and we have one guy. One guy to watch 3,000 miles, 2500 crossings…you have one guy to watch all of that! So I have already got the commissioners to help me add new people to that mix.
But we already coordinate with the Arizona Department of Transportation, U.S. Department of Transportation. Doesn't it make some sense to think, are there some economies of scale, better service that we can provide by looking at these consolidations?

TED: It would make sense if there were problems with the Corporation Commission staff doing a good job. Are they not doing a good job?

ANDY: Well, some of them are and some of them are not. Some people will argue that place is a disaster right now. Other people will share that we have the best pipeline safety record maybe in the country, and I agree with that.

But we don't need to wait for a disaster to have improvements, and I think that is what we are trying to point out. I was shocked to find with all of the things we do, we have one guy. I mean, I have walked rail in Nogales and studied how we do these things. It seems to me we've made changes at the Corporation Commission in the past. It can't be a power grab. The legislature, the governor and the voters have to assist.

TED: We will start with the railroad tracks and crossing. How does this better protect the public? Is there a problem now that needs addressing?

ANDY: Yeah, we talked about it on your show. The Arizona Republic put out we have five of the worst railroad crossings in the nation. In fact, we are the only state that has more than one in the top 20! They're right here on Grand Avenue. And so we have a lot of those things that we should have been addressing long ago, and certainly could address now. But my fear is--and you see rail accidents around the country--I would hate to have one happen here and have to listen to the governor call and say "why didn't we have more inspectors?"

TED: Better for ADOT to administer railroad fines rather than have a quasi-judicial branch which is charged to do such a thing, i.e. you?

ANDY: Well the truth of the matter is a lot of the fines that actually happen on the rail actually are inclusive of the U.S. railroad system. They're the ones who actually bring that to the table. But the conversation about whether or not we are better to do it than ADOT is where you have that good and wholesome debate and say, let's go talk to ADOT , let's go talk to Railroad. Maybe the railroad companies don't want it. I mean, who's to know?

TED: Okay, let's talk about sale of securities not regulated by the feds. The idea is that the Department of Financial Institutions or Department of Insurance might be better in a securities division. They are charged with watching out for massive fraud and protecting the public here. Why mess with that?

ANDY: Well, there are some good reasons. You were not in the meeting last week when they came and said "we need a 50% increase in our salaries for our starting pay." 50%. I'm like, I've never ever heard any… even the private sector never has that kind of shortfall. So that sends the first message like, well, how long has this been critical? "Well, it's been critical for years." And I said, "Well what have we been doing about it?" "Well, we have had other priorities. We had a system we had to install last year, so it wasn't a priority then..."

To me, that's a priority. Having come from the Department of Insurance where we have inspectors there, and the Department of Financial Institutions, where we have inspectors there-- isn't that worth our time to look if we have economies of scale, where we can work with the AG's office and maybe find some savings and do better?

TED: But if you are talking criminal enforcement, which has a lot involved here when they are talking major fraud issues, why not just send it over to the Attorney General's office?

ANDY: Well, because some of those things are specialty to us and we want to make sure that we have the special training. What's been going on is as we are bringing these people in, they are getting stolen away because they are not getting paid enough. Well, that creates a scenario unto itself. We have to find a way to well utilize the dollars and keep those people in that training where we need the most effectiveness.

TED: Are people in the Department of Financial Institutions or the Department of Insurance capable of handling these big fraud cases where you have to get money returned to the public? Again, we are talking about consumer and public safety here.

ANDY: Well I've got to tell you, we have some incredible state employees. I just left the Division Director Matt Neubert over there, and I cannot talk a lot about them, but they are a quality staff and I don't want to see that be reduced. Just like it was when we were at Weights and Measures, we expanded what we were doing; we improved the service to the citizens of Arizona with less money and actually had more people doing the work. That's kind of the target. So there is no political grab here.

TED: I'm going to get to the grab in a second, but before we get there, you mentioned pipeline safety. I think the Division just got a hundred percent federal rating on it. They do a good job. Why the Department of Agriculture? Why not let the folks doing a good job continue doing a good job?

ANDY: Well in that particular case, we may look at the Department of Agriculture, remember that part which is about fuel mix measurements--Weights and Measures, the division I ran--that's about the possibility of maybe moving that over to the Corporation Commission. Maybe the Weights and Measures piece--where they are make sure the winter blends and stuff like that are right--maybe that should come over to us.

You can see what we are really talking about here is having a transparent conversation about where did these things better fit. Most Arizonans, Ted, didn't have a clue that a lot of these things were being done there. I think the next question is probably the Secretary of State's office.

TED: No, the next question is, because we are running out of time…have you had discussions about this with the governor?

ANDY: I have not.

TED: What about Chief Kirk Adams?

ANDY: No, I have not.

TED: Because that is where the power grab is. People see this and they say you have important functions that aren't a problem at the Corporation Commission, and you want to shift them over to state agencies overseen by the governor.

ANDY: Well, they may tell me they're not interested. They may tell me this is a bad deal, they may tell me it's not efficient. We work with the Secretary of State already--we have to file our trade names there. Well when we do corporations and LLCs, we have to intermingle. There are places we overlap and those should not be underestimated.

TED: Do you think you have three votes on the commission for this?

ANDY: I don't think I ever have three votes on this commission. But I will share that a lot of the staff that's over there are exceptional people and this is the chance to have a scope of work and review for a place that doesn't have a policy manual. Practices and protocols… let's look at the rules and audit ourselves.

TED: Well, that's understandable as well. Here is my last question. If you did have the three votes, can the Corporation Commission unilaterally do this? The Corporation Commission is a big player in the U.S. Constitution.

ANDY: Absolutely not. We have to go to the voters for these kinds of things, and I think that that is where most of us who believe in real transparency want to go anyway. Let's hear what the voters have to say. Let's have our meetings and take it to the voters if the legislature thinks it is appropriate as well. I am all for putting these things on the table and seeing where they land.

TED: Good to see you.

ANDY: Hey thanks, I appreciate the time.

Andy Tobin: Arizona Corporation Commissioner

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