Crossposted from the Arizona Eagletarian

Yesterday afternoon, Arizona Republic columnist Laurie Roberts asked the question, “Why is APS doling out cash to get Mark Brnovich elected?” It’s an excellent question.


Unfortunately, Roberts didn’t come up with an answer.

It’s not really a legitimate rhetorical question if the audience/readers cannot answer it for themselves. There is, however, a clear answer available. Voters — especially Republicans whose interests are being subverted — need to become aware of the background, reasons and the stakes involved.

What would conservative voters do if they realized that the officials they have elected — and think they want to elect now — were looking out for socialist interests instead of the interests of those Republican voters?

From a Forbes magazine article on utility death spirals dated December 2, 2013,

Generally speaking, utilities socialize the cost of maintaining the electric power grid across their customer base. The costs imposed on each customer is a function of the size of the customer base. If the number of customers increases, the costs allocated to each customer should decrease. If the number of customers decreases, the costs allocated to each customer should increase. […]

Rooftop solar panels, small wind turbines or advanced energy storage technologies can technically provide customers with 24/7 power, but at a cost that is virtually certain to be an order of magnitude larger than what those customers would pay for grid-supplied power.

Well, a year ago it may have seemed to many that alternative technologies would come “at a cost that is virtually certain to be an order of magnitude larger than what those customers would pay for grid-supplied power.” But the cost for such systems is dropping rapidly.

So what does all of this have to do with APS and the 2014 general election?

Over the last three years, APS has increasingly been acting like a cornered animal fighting for survival.

In the 2012 election, special interests (including Arizona Public Service and Southwest Gas) dumped a boat load of cash that successfully influenced the election of three corporation commissioners, all three Republicans — Bob Stump (re-election), Bob Burns and Susan Bitter-Smith. The outcome: the five member Corporation Commission consists now entirely of RepublicansAPS apparently wants this year’s Republican candidates Tom Forese and Doug Little to help “regulate them.”

In the summer of 2013, Arizona Public Service was outed as having dropped a ton of money on a campaign to pressure the Corporation Commission into assessing fees on homeowners with rooftop solar. The Corp Comm ruling was intended to provide “some relief” to APS for revenue lost because distributed generation (residential rooftop solar) has disrupted APS’ business modelBig time disruptionA year ago, I wrote,

But we turn back to Arizona’s most obvious competitive economic advantage — solar electricity generating capacity. If only the doors are not kept closed by Big Money lobbyists for the monopoly utilities.

It’s not altogether far-fetched to consider that the recent trial balloon — put forth by the Arizona Corporation Commission about the possibility of reopening the door on deregulation — was a chess move by the monopoly power companies, in particular APS, to shut the door before the knob could even be turned to open it.

After all, that’s all those monopoly enterprises have to protect their economic interests. If you refuse to implement the innovations that will revolutionize your industry, all there is left is to appeal to those who can protect the monopoly. For APS, that’s the Arizona Corporation Commission. For Salt River Project, that’s the Arizona Legislature. In light of this year’s passage of the Lobbyist Shakedown Bill (HB2573), rather than investing in technology advances, expect them to invest in incumbent state lawmakers committed to protecting the interests of those monopolies. […]

Now, just how imminent is this disruptive innovation that could bankrupt Arizona Public Service if it doesn’t respond to the competitive threat?

If (since?) APS already has captured its own regulators, why would it need to have the state Attorney General in its pocket?

In 2006, the ACC enacted Renewable Energy Standard and Tariff (REST) rules mandating that regulated utilities must produce at least 15 percent of their power from renewable sources by 2025. The ACC was able to do so because the Attorney General (according to briefs filed by the Goldwater Institute in Miller v Arizona Corporation Commission, a lawsuit challenging the REST) reviewed and approved the rules.

Before the REST Rules became effective, the Attorney General was required to review them pursuant to Arizona Revised Statutes Section 41-1044(B) specifically to determine whether the Rules were within ACC’s power. The Attorney General was required to disapprove of the Rules if they exceeded ACC’s authority… Nonetheless, the Attorney General approved the REST Rules on June 15, 2007, and they became effective on August 14, 2007.

What would a cornered raccoon do if it succeeded in capturing the entire Office of the Attorney General? Might APS have another lawsuit challenging the REST rules up its sleeve? Might a crony elected to be AG be capable of greasing the skids by re-reviewing the REST rules and declaring them outside the constitutional authority of the ACC?


Last Friday, APS “graciously” hosted a briefing for Democratic candidates for the Arizona House and Senate. Few, if any incumbent Democrats attended. By the way, APS and Salt River Project have, for many years, have had their way with lawmakers.

The purpose of the briefing appeared to some in attendance to be APS explaining what they do to provide electric power to Arizonans. Notably, candidates understood APS had told them solar power would never be capable of meeting the demands of Arizona communities. Because peak demand generally occurs after 6pm, even in summer the sun is already at too low of an angle to produce enough electricity to meet the demand.

My question then was, “what did they say about storage?” The reply, “NOTHING.” That struck me as incredibly bizarre, since APS’ own website brags in a post dated October 9, 2013, solana begins serving customers; providing power at night.

… the Solana Generating Station has successfully passed final production tests and entered commercial operation on Monday. At 280 megawatts (gross), Solana is the world’s largest parabolic trough plant and the first solar plant in the United States with thermal energy storage allowing for electricity to be produced at night.

Unlike other solar-powered electrical plants, Solana produces electricity at full capacity for up to six hours after sunset, using Concentrating Solar Power (CSP) technology with solar thermal storage. Solana is Abengoa’s first utility-scale solar plant in the country to begin operation.

Could APS’ “briefing” have been anything other than an indoctrination and propaganda session designed to co-opt and capture more Democratic lawmakers before they even get elected. Of course, APS may have provided a similar briefing to Republican candidates.


So, why IS APS pouring out so much money to purchase itself an Attorney General, AND a Corporation Commission, AND Democratic lawmakers like Catherine Miranda?

Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure; it creates an opening for firms to behave in ways injurious to the public (e.g., producing negative externalities). The agencies are called “captured agencies”.

Isn’t it obvious? APS is doing it — because it can.

Because APS apparently believes its chances of survival are better with a captured Arizona government than by focusing on implementing the technology that is rapidly making its business model obsolete.

Beware of the risks of allowing Mark “I am NOT a CROOK” Brnovich to become APS’ personal Attorney General.


I’d also like to give a shout out to Arizona Eagletarian reader Kim Bartman along with the Fountain Hills Times. Kim wrote a letter to the editor published this week citing the recent blog post about the Kavanagh Kingdom and providing a link.