APS goes all out in fight against clean-energy measure

Ryan Randazzo | The Republic | azcentral.com

Show Caption Hide Caption Palo Verde Nuclear Generating Station Palo Verde Nuclear Generating Station could be forced to close if a renewable-energy ballot measure passes, the plant's owners said.

Arizona Public Service Co.'s parent company has put more than $5 million into political-action committees to influence how Arizonans vote on Nov. 6, focusing in particular on a clean-energy ballot measure the company hopes to defeat.

Pinnacle West Capital Corp. is leading a multi-front battle against the measure. The company's efforts include challenging the signature-gathering tactics by the clean-energy group, which needs about 226,000 valid signatures to make the ballot.

APS also is putting noteworthy effort into badmouthing the ballot-measure's proponent, billionaire activist Tom Steyer of California.

"AZ Chambers of Commerce R going on record against the so-called clean energy ballot initiative, because it is $$$$ costly 4 AZ families, & does nothing 4 cleaner air. #NoSteyerTaxScam," APS External Communications Director Hal Pittman tweeted May 14.

The ballot initiative would require APS and other regulated utilities to get 50 percent of their power from renewables by 2030. The current state standard enforced by the Arizona Corporation Commission is 15 percent by 2025, and APS is ahead of the current benchmark of 7 percent.

Utility officials contend the ballot initiative, because it would amend the state constitution, would not allow flexibility and would force the closure of coal and nuclear power plants by 2025 to make room for renewable energy on the grid.

MORE: What would happen if Arizona required solar power for all new homes?

"By design in the ballot initiative, those renewables are must-take," said Jeff Burke, APS' resource planning director. "They have to stay on. What that does is it pushes net demand downward. When that gets pushed downward, eventually you have too much energy on the system."

APS lobbyists pushed for a new law, now signed by the governor, that will nullify the penalty for not complying with the energy standard.

Supporters of Steyer's measure say the utility is overreacting.

"APS will say or do anything to protect their $488 million in dirty energy profits," said Rodd McLeod, spokesman for the Clean Energy for a Healthy Arizona initiative. "They know Palo Verde employs a lot of people, so they are cynically threatening these workers’ livelihoods if they don’t get their way because they have no good argument against clean, renewable energy."

Utility invests millions in fight

Pinnacle West has at least three political action committees with more than $5 million to spend in Arizona this year.

Arizonans for Affordable Electricity, which is focused on defeating the renewable-energy initiative, has taken in $1.2 million from Pinnacle West since February.

That is just ahead of the ballot initiative's committee, Clean Energy for a Healthy Arizona, which has taken $957,000 from Steyer's group NextGen Climate Action, according to the most recent campaign-finance report from April.

Another Pinnacle West group is called Arizonans for Sustainable Energy Policy, which has $3.2 million received from the company to support candidates.

Matthew Benson, a spokesman for Pinnacle West's political committees, said it is too early to tell if any of the cash will be used to influence the race for two seats on the five-member Corporation Commission. The company has not yet endorsed any candidates in that race.

APS previously had a policy to abstain from influencing commission races. Those elected officials set rates and policies for APS and other regulated utilities in the state.

What you should know about Arizona's Corporation Commission The Arizona Republic's Ryan Randazzo explains what the Arizona Corporation Commission does and how these five elected officials can have a big impact on your electric bill.

But APS and Pinnacle West changed that position in recent elections. The company now issues an annual report describing such spending.

In the last election year, 2016, Pinnacle West reported spending more than $10 million, including $4.2 million that went to a political group supporting Republicans for the Corporation Commission.

Additionally, Pinnacle West has its own committee, Pinnacle West Capital Corporation Political Action Committee, which APS employees have loaded up with $771,000 for this year's elections. All eligible employees of Pinnacle West may make voluntary contributions to the non-profit, non-partisan PAC.

Pinnacle West also contributed to a nonprofit called the Arizona Education Project that in January began running a "six-figure" advertising campaign to highlight the success of state schools. The group was largely aligned with Gov. Doug Ducey, who is running for re-election this year, though the group claimed to not be endorsing any candidate.

Palo Verde Generating Station refuels to power Arizona and beyond The Palo Verde Generating Station provides power for Arizona and beyond. A look inside reactor 3 as workers refuel the core April 23, 2018.

Renewables poll well

McLeod, the Clean Energy for a Healthy Arizona initiative spokesman, said polling shows broad public support in Arizona for increasing the use of renewables.

He shared the results of polls of more than 600 likely Arizona voters conducted in November and April, which found 58 percent and 56 percent, respectively, support the measure, and only 32 percent and 34 percent oppose it.

The telephone surveys from Fairbank, Maslin, Maullin, Metz & Associates have a margin of error of plus-or-minus 4 percentage points.

The surveys found a majority of voters support the measure even when they were only exposed to negative messages about it.

"Our future is clean energy, but APS is one of the few utilities in the country that is clinging to the past," McLeod said. "Renewable goals are being met around the country, consumers are saving money and protecting our air and water. ... Voters want change, the economy demands it, but APS executives and shareholders get rich doing it the old way — so until we pass laws forcing them to change, they won't change."

Benson, who is running the Pinnacle West funded Arizonans for Affordable Electricity opposition campaign, said his group has done similar surveys but declined to share the results.

"Assuming the proposal makes the ballot, it is vulnerable — but it's critical that Arizona voters understand this measure will hike electricity rates, hurt consumers and kill jobs," Benson said. "That's why we're taking this simple message to community and business groups across the state, and our coalition is growing daily."

Benson's group has kept up a near-daily drumbeat of news about chambers of commerce and other business entities opposing the policy. They include chambers in Phoenix, Scottsdale, Mesa, Tempe, Chandler and several other cities.

The Gilbert Chamber of Commerce announced May 17 it would oppose the measure. APS lobbyist Rustyn Sherer sits on the board of that chamber, and like dozens of others across the state, APS is a donor to its programs.

"Bad news for @TomSteyer in today's Gilbert Chamber newsletter. #NoSteyerTaxScam," APS spokeswoman Anna Stewart tweeted when the chamber came out against the measure.

Lawmakers fight initiative

APS worked with lawmakers to introduce a "striker" bill in March that set the penalty for violating the clean-energy standard as a civil fine between $100 and $5,000.

Sen. Sonny Borrelli, R-Lake Havasu City introduced the striker amendment and Rep. Vince Leach, R-Saddlebrooke, supported the rewrite of a bill he had initially introduced to address economic development.

The bill passed the Republican-controlled Legislature and Gov. Doug Ducey signed it into law.

APS earned $489 million in profits last year, which means it would take the company about 5 minutes to earn enough money to pay the maximum penalty for not achieving the renewable-energy goal.

McLeod said the clean-energy group is not dissuaded by the bill.

"We certainly expect that if APS tried to use this unconstitutional loophole to defy the will of voters, it would be challenged in court," McLeod said. "We expect it would be struck down. We hope, should voters approve the ballot measure this fall, that utilities would recognize the will of the voters and stop dragging their feet on renewables."

APS also supported another bill that would have placed a nearly identical question on the November ballot to raise the renewable-energy standard.

Having two similar measures would likely have confused voters and resulted in both failing, but in the scramble to address protesting teachers and pass a state budget, that ballot measure did not make it through the Legislature before it adjourned.

MORE: Nuclear plant could close if renewable-energy measure passes, APS says

Piling up complaints against ballot measure

State lawmakers and Pinnacle West's political group have been piling on complaints about the signature-gathering for the clean-energy ballot measure. The signature-gathering effort is being led by a company called FieldWorks.

Republican lawmakers Sen. John Kavanagh and Leach filed a complaint April 23 with the secretary of state claiming, essentially, that the clean-energy campaign had hired too many people to gather signatures.

The Secretary of State's office found no violations and forwarded the complaint to the Attorney General's Office.

A spokeswoman for that office declined to say whether an investigation is taking place.

A separate, May 15 complaint from the Pinnacle West-funded group asks for an investigation into whether the clean-energy campaign illegally sets quotas for the number of signatures gathered during a work shift.

Arizonans for Affordable Electricity then filed a complaint on May 21 with the secretary of state suggesting the clean-energy campaign has violated state laws by allowing people with criminal records to work as signature gatherers.

Pinnacle West's group also has been conducting robocalls to Arizona voters telling them that the clean-energy campaign is using "convicted felons" to collect signatures and warning people not to sign the petition because they could become victims of identity theft.

"Please don't take a chance that a convicted felon will have access to your personal data," says the voice on one call shared with The Arizona Republic.

Clean Energy for a Healthy Arizona did not respond to the assertion from the opposition group that some of its signature gatherers had criminal records, but McLeod noted that APS has been under investigation by the FBI since June 2016 and suggested the complaints were at attempt to discredit the clean-energy measure.

MORE: APS supports one clean-energy plan, fights another

NextGen wins in Michigan

Pinnacle West's spending in Arizona stands in contrast to what NextGen clean-energy measures have encountered in other states this year.

NextGen launched similar renewable-energy initiatives in Nevada and Michigan, and appears to have some early victories in those states.

On May 18, Michigan's two major utilities said they would agree to get half their power from renewables and efficiency by 2030. NextGen dropped its ballot initiative in response to the agreement with Consumers Energy and DTE Energy.

What if Arizona required solar on all new homes? California customers should save about $80 a month in heating, cooling and lighting, or about $19,000 over the usual 20-year life of solar panels.

NextGen had to get 350,000 signatures in a shorter time in Michigan than in Arizona, and once they were collected, the utilities agreed to the deal before the signatures were submitted.

The deal represents a compromise in that state. Current law requires utilities to get 15 percent of their power from renewables by 2021. The NextGen initiative would have required 30 percent by 2030. Under the deal, the companies will get 25 percent from renewables by 2030 and another 25 percent from efficiency.

Nevada has a current renewable-energy standard of 25 percent by 2025. Lawmakers in that state last year approved an increase to 40 percent by 2030, but Gov. Brian Sandoval vetoed it.

The NextGen ballot initiative in Nevada seeks a 50 percent standard by 2030, like the initiative in Arizona. It needs about 113,000 signatures by June 19 to qualify for the ballot.

The state's utility, NV Energy, has taken a neutral stance on the initiative, even as it fights a separate ballot measure that would deregulate energy sales in that state. As of May 22, NextGen had put $1 million into its Nevada effort, according to its financial report with the secretary of state.

"NV Energy has exceeded our state's renewable portfolio standard for the eighth straight year and is on track ... to double our renewable energy capacity by 2023," company spokeswoman Jennifer Schuricht said last week. "The company's ultimate goal is to supply our customers with 100 percent renewable energy, while not impacting the price they pay for our services."

APS officials said the Nevada ballot initiative is not comparable to Arizona.

"We can't speak to other companies' actions in response to the Steyer ballot initiatives in their states," APS spokeswoman Jenna Rowell said. "What Tom Steyer has proposed in Nevada is not the same as what is proposed in Arizona. We can only speak to the Steyer initiative here in Arizona, and it is very clearly an irresponsible proposal that is bad for customers."

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