** APS political spending soared under Don Brandt. Will that change with a new CEO? ([link removed])
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By Joe Smyth on Aug 30, 2019 02:26 pm
Over the last few months, some of the secrecy surrounding Arizona Public Service’s spending on political campaigns has been lifted. APS’ responses to Arizona Corporation Commissioner Sandra Kennedy’s subpoena have provided new details about how the company sought to influence its customers, regulators, elections, and politics in Arizona – as well as how much money APS spent in the process.

A review of APS filings in response to the subpoena shows that between 2013 and 2018, APS reported spending more than $182 million on lobbying, marketing, grants, and political spending. With 1.2 million customers ([link removed]) , that amounts to $152 per customer. That figure doesn’t account for the full impact on ratepayers of APS’ spending, which helped the company to elect regulators who approved of rate increases.

APS reported spending more than $72 million on political campaigns, by giving money to a variety of 501(c)(3) and (4) groups, political action committees, and other organizations. That doesn’t include other political spending that was not included in APS’ responses to the subpoena, such as contributions to candidates for US Congress ([link removed]) , and to state legislators and other elected officials ([link removed]) in Arizona.


** Will new CEO Jeff Guldner pursue a different approach?
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The retirement of APS CEO Don Brandt has raised questions about whether incoming CEO John Guldner will change the company’s direction by embracing clean energy and ending its efforts to dominate Arizona politics. Opinions seem mixed on that question. Former Arizona Corporation Commissioner (ACC) Kris Mayes said ([link removed]) : “I actually expect Jeff Guldner to stop the political spending and dramatically ramp up the amount of renewable energy that this utility does. He’s got an enormous mess to clean up.”

But responding to Phoenix New Times reporting ([link removed]) that Guldner himself actively participated in APS’ political campaigns to influence Arizona Corporation Commission elections in 2014 and 2016, ACC Commissioner Sandra Kennedy asked: “Will Mr. Guldner continue on the same path that Don Brandt did? It’s in the back of my mind, trust me.”

And columnist Laurie Roberts encouraged ([link removed]) Guldner and the APS board to ask themselves: “Is it appropriate for a regulated utility to secretly spend millions on political campaigns to elect its own regulators who then promptly grant the utility a rate hike?”

The chart below details APS spending by category, and shows how APS has shifted its methods of influencing political affairs in Arizona. It also shows how APS spending has increased during election years, and soared in 2018 as APS fought to defeat a ballot initiative that would have required APS and other utilities in Arizona to generate 50% of their power with renewable energy.


** Background: Commissioner Kennedy’s subpoena revealed new information about APS’ political spending
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In February, ACC Commissioner Sandra Kennedy directed ([link removed]) Commission staff “to prepare subpoenas to Arizona Public Service and Pinnacle West Capital Corporation seeking the information listed below,” including details about the company’s spending on lobbying, marketing, political campaigns, and 501(c)(3) and (4) groups.

ACC Commissioners Bob Burns and Boyd Dunn also asked ([link removed]) APS to provide information about its political spending, and made clear: “If there is no response, the Commissioners are prepared to issue the subpoena.”

In March, APS responded ([link removed]) to the commissioners with some of the information Kennedy had requested, including overall spending on advertising and marketing ([link removed]) by APS and its parent company Pinnacle West, overall spending on grants ([link removed]) by APS and the APS Foundation, and some details about APS political spending from 2013 to 2017. In a later response ([link removed]) , APS also provided some information about its political spending in 2018.

But as the Phoenix New Times reported ([link removed]) , APS did not include key details requested by Commissioner Kennedy, such as which organizations received money from APS, and for what purposes. Commissioner Kennedy requested that APS provide those details in April ([link removed]) , and again in early May ([link removed]) .

On May 9, APS provided ([link removed]) details about the organizations that received funding from APS ([link removed]) , as well as from the APS Foundation ([link removed]) . And on June 17, APS provided ([link removed]) more details about its spending on outside lobbying ([link removed]) and marketing and advertising ([link removed]) , as well as spending by APS parent company Pinnacle West on 501(c)(3) and (4) groups
([link removed]) , and a list of Pinnacle West’s marketing and advertising partners ([link removed]) . Those later responses also revised some of the figures in APS’ earlier responses, such as the amount APS spent on outside lobbying ([link removed]) and charitable donations ([link removed]) .


** Lobbying
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Between 2013 and 2018, APS spent more than $4.5 million on outside lobbying and on payments to trade associations “used for lobbying-related activities.” That figure does not represent all of APS’ spending on lobbying. APS spending on “outside lobbying” refers to lobbying firms that APS hires, but does not include the salaries of APS employees that are involved in lobbying efforts. And trade associations like Edison Electric Institute often classify a small portion of their spending as lobbying, even though much of their spending aims to influence politics.

Lobbying 2013 2014 2015 2016 2017 2018 Totals
APS outside lobbying spending $704,204 $718,406 $558,085 $800,807 $515,871 $380,789 $3,678,162
APS spending on trade associations, for lobbying not provided not provided $279,057 $170,073 $213,116 $209,830 $872,076
Totals $704,204 $718,406 $837,142 $970,880 $728,987 $590,619 $4,550,238

Source for APS outside lobbying spending:APS June 17 response ([link removed]) (which revised the March 29 figures).

Source for APS payments to trade associations used for lobbying: APS March 29 response for 2015 ([link removed]) , 2016 ([link removed]) , and 2017 ([link removed]) , and APS April 24 response for 2018 ([link removed]) .


** Marketing and Advertising
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Between 2013 and 2018, APS and Pinnacle West spent more than $59 million on marketing and advertising, with significantly higher amounts in 2014 and 2018 than in other years.

2013 2014 2015 2016 2017 2018 Totals
APS marketing $5,251,189 $8,907,475 $3,999,925 $3,816,198 $3,739,082 $8,891,357 $34,605,226
Pinnacle West marketing $3,677,013 $3,723,946 $3,896,234 $3,981,946 $4,004,028 $5,137,983 $24,421,150
Totals $8,928,202 $12,631,421 $7,896,159 $7,798,144 $7,743,110 $14,029,340 $59,026,376

Source: APS March 29 response ([link removed]) .


** Grants and corporate giving
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Between 2013 and 2018, APS Foundation spent over $15 million on grants, while APS itself spent nearly twice that amount, over $30 million, for a combined total of more than $46 million. While the organizations that received money from APS Foundation had been disclosed in 990 forms filed with the IRS, the larger amounts that APS itself gave had not been made public until APS’ responses to the subpoena.

2013 2014 2015 2016 2017 2018 Totals
APS corporate giving $4,845,597 $5,662,943 $5,104,161 $5,452,990 $4,896,260 $4,903,191 $30,865,142
APS Foundation grants $3,023,685 $2,583,840 $2,921,300 $1,648,100 $2,780,700 $2,946,495 $15,904,120
Totals $7,869,282 $8,246,783 $8,025,461 $7,101,090 $7,676,960 $7,849,686 $46,769,262

Source for APS Foundation grants: APS March 29 response ([link removed]) .

Source for APS corporate giving: APS May 9 response ([link removed]) (which revised the March 29 figures)

APS’ May 9 response also listed the organizations that received money from APS ([link removed]) , which had not previously been disclosed. A spreadsheet of that data, sorted by organization, is available here ([link removed]) .

A spreadsheet of APS Foundation grants ([link removed]) , also sorted by organization, is available here ([link removed]) .


** Political campaigns
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APS responses to Commissioner Kennedy’s subpoena reveal a variety of ways that APS and Pinnacle West have sought to influence elections and political affairs in Arizona. Most prominently, the disclosures revealed what had long been suspected – that in 2014, APS had secretly funded groups to help elect its own regulators. APS reported ([link removed]) that it gave $10.7 million to three organizations that participated in the 2014 ACC elections, including Arizona Free Enterprise Club, Save Our Future Now, and the Arizona Cattle Feeders Association, as well as $4.2 million to the Arizona Coalition for Reliable Electricity, which participated in the 2016 ACC elections.

Political campaigns 2013 2014 2015 2016 2017 2018 Totals
527 groups not provided $723,500 $290,000 $728,500 $155,500 $262,500 $2,160,000
501 (c) (3) and (4) groups $513,250 $11,680,500 $1,332,500 $5,253,000 $900,000 $410,350 $20,089,600
Independent political expenditures not provided $471,700 $48,550 $4,749,500 $4,357,500 $40,305,300 $49,932,550
Totals $513,250.00 $12,875,700 $1,671,050 $10,731,000 $5,413,000 $40,978,150 $72,182,150

Sources for 2013-2017: APS March 29 response ([link removed])

Direct links:

2013 ([link removed])

2014 ([link removed])

2015 ([link removed])

2016: 527 groups ([link removed]) , 501 (c) groups ([link removed]) , independent political expenditures ([link removed])

2017: 527 groups ([link removed]) , 501 (c) groups ([link removed]) , independent political expenditures ([link removed])

Source for 2018: APS April 24 response ([link removed])

Direct links: 527 groups ([link removed]) , 501 (c) groups ([link removed]) , independent political expenditures ([link removed])

The post APS political spending soared under Don Brandt. Will that change with a new CEO? ([link removed]) appeared first on Energy and Policy Institute ([link removed]) .
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