‘Kochtopus’ dark money and Arizona solar energy


Posted by AzBlueMeanie:

The Arizona Republic reported this week, APS, solar companies clash over credits to customers:

SolarAPS recently acknowledged to The Arizona Republic that it
provided money to a Washington, D.C.-based conservative organization
called 60 Plus, which focuses on seniors’ issues such as taxes, Social
Security and Medicare.

It also gave money to another non-profit called Prosper, which was launched this year by Republican Kirk Adams, a former Arizona House speaker.

The non-profits have supported APS’ position in websites, online videos and television advertisements.

John Hatfield, APS vice president of communications, said the utility
is contributing money to the non-profits, and potentially other groups,
through political consultant Sean Noble and his firm, DC London.

“We needed to respond to these ridiculous assertions that we do not
support solar,” Hatfield said, adding that APS does not agree with all
political positions at 60 Plus and Prosper.

Early this year, APS initiated a series of meetings with solar companies and other interested parties to address net metering.

In March, California rooftop-installation companies SolarCity Corp.
and Sunrun Inc., with other partners, formed TUSK, or “Tell Utilities
Solar won’t be Killed.”

The group opposed changes to net metering even before APS formally
submitted its proposed changes to the Corporation Commission, which
approves rates and related policies for most of the state’s utilities.

Shortly after TUSK launched, 60 Plus began criticizing SolarCity and
Sunrun, comparing them with Solyndra, the California solar company that
took more than $500 million in federal assistance and then filed for

Soon after, Prosper joined the debate on the side of APS. Prosper has been running television commercials calling for changes to net metering.

Money sent to non-profits is difficult to track in a timely fashion,
because the Internal Revenue Service only requires non-profits to file
annual reports. That can make the identity of their financial supporters
unknown for long periods.

This is the first time APS has acknowledged it is contributing to the groups.

In July, APS officials suggested it was coincidental that they were
paying Noble and that 60 Plus and Prosper were siding with the utility
on net metering

Noble did not return calls from The Republic.

Adams said he formed Prosper to promote free-market principles.
He would not acknowledge the group is getting money from APS, even
though company officials confirmed contributing to the group.

Adams said Prosper has several donors, and that he did not form the group to work exclusively for APS. “That is categorically false in every respect,” he said. “Our organization had its genesis last fall.”

He said Prosper has also been campaigning to prevent the expansion of
Medicaid. He said Prosper has had limited contact with APS regarding
net metering and that he chose to get involved in the issue independent
of any donations.

* * *

APS officials declined to say how much they are spending on 60 Plus and
, but costs of the television advertisements tied to the
net-metering issue run into hundreds of thousands of dollars.

The Huffington Post adds some details the Republic left out, Arizona Solar Policy Fight Heats Up As Utility Admits To Funding Nonprofits' Campaign Ads:

Arizona's largest utility admitted this week that it had paid a national
conservative group to run anti-solar ads, after denying earlier in the
year that it was funding the campaign.

* * *

The debate over the policy has split along some interesting political lines, with the son of Republican icon Barry Goldwater
defending net metering against attacks from a national conservative
organization. The 60 Plus Association, which presents itself as a more
conservative alternative to the AARP, has been running ads in the state,
along with a website, bashing the solar net-metering policy as
"corporate welfare."

In July, when this reporter asked APS spokesman Jim McDonald point-blank whether APS was funding the 60 Plus ads, he denied it, saying, "No, we are not." [That was false — see above.]

"I know what I told you earlier," McDonald said. "That was my
understanding at the time." He said he doesn't know how much APS money
went toward those campaigns and dismissed the issue as "a phony
controversy fueled by opponents who are eager to distract attention from
the real substance from the issue."

* * *

APS has maintained that it is not anti-solar, it just wants to change
the net metering policy. "We've been painted as anti-solar," McDonald
said. "That's just absolutely untrue."

But the ads and website from 60 Plus have been much more openly hostile to solar energy than APS has been in its public statements.

60 Plus is backed by the Koch brothers,
and the Arizona Republic confirmed that the work against net metering
in Arizona is being coordinated by conservative operative Sean Noble,
who has been described as "the wizard behind the screen" in the Kochs' donor network.

Prosper, the other named group that received money for its ads, is led by former Arizona Speaker of the House Kirk Adams (R) and has campaigned against net metering and against the expansion of Medicaid.

On Thursday, two other nonprofits operated by Noble and Adams were fined $1 million for failing to appropriately disclose political spending in California's elections last year.

The revelations about APS' funding of the anti-solar campaign have
sparked further debate. Solar proponents, including the Alliance for
Solar Choice and the Arizona Solar Energy Industries Association, are
now calling on the state attorney general and utility regulators at the
Arizona Corporation Commission to look into whether APS illegally used
rate-payer funds as part of those efforts.

[John Hatfield [told The Arizona Republic] that APS is not using ratepayer funds to finance its political
campaign. Instead, he said the utility is using profits that otherwise
would go to stockholders. APS’ parent company, Pinnacle West Capital
Corp., is publicly traded.]

McDonald told HuffPost that ratepayer money was not used to pay for the
campaigns, but that the funds came from shareholders in APS' parent
company, Pinnacle West Capital Corp., which is publicly traded.

The net metering fight has even boiled over into Arizona's electoral politics.

Last week Wil Cardon, a Republican candidate in the 2014 primary race
for secretary of state, accused one of his opponents, Justin Pierce —
son of ACC commissioner Gary Pierce — of soliciting campaign support in
exchange for his father's influence on utility regulation. Cardon's
campaign identified two individuals on the host committee for a Justin
Pierce fundraiser as employees of firms that have done work for APS at
one time. But both of those lobbyists told The Huffington Post that they
do not currently and have never lobbied on behalf of APS.

In response to the criticism, Pierce announced that his campaign will be publicly funded.

* * *

The Cardon campaign has also implied in public statements
that a company like APS or a political operative like Noble or Adams
could make outside expenditures in support of Pierce's campaign. Heywood
told HuffPost that it would be illegal for the campaign to "coordinate
on anything like that."

"He's not doing that and won't do it," said Heywood.

* * *

[T]he revelations about the previously undisclosed funding to 60 Plus
and Prosper aren't helping [APS'] reputation. And renewables proponents
are growing increasingly worried about where the senior Pierce might
come down on the net metering question. They pointed to several recent
letters from Commissioner Gary Pierce that they think indicate he might
support APS' efforts to change the net metering policy.

In July, Pierce requested a study from commission staff to examine whether the net metering policy should be changed. In an Oct. 17 letter, Pierce requested additional information from all parties after the staff report recommended against APS' proposal and in favor of not changing the net metering policy at this time.

Pierce has denied suggestions that he's taken any position on net
metering at this point. "I am still considering all of the arguments,
which is why I am actively seeking more input," Pierce said in a written
response to questions from HuffPost. "My goal is to get this issue
right for all ratepayers, and to have a sound policy that will work for
years to come, not only for APS, but for the solar industry as well."

The ACC is expected to begin hearings on proposals to revise the net metering policy in November.


  1. Thanks for the article. The utilities will continue fighting the decentralized types of solar tooth and nail until the ACC restructures the way they get the utilities’ profits. Currently, they make money in two main ways, from kilowatt-hour sales and capital investment. A third minor way is through the basic monthly fee, which Arizona Public Service (sic.) is trying to get the ACC to increase. It could then become a third major source. The higher the fee, the less it makes sense to do solar. The lower fees promote alternatives to the current coal/gas/nuclear dominance.
    Solar energy investments actually save money for even non-solar homes and businesses by decreasing the amount of power-plants to be built and by reducing the peak energy production from gas generation. Solar energy production patterns have a fairly good match with peak energy patterns. Without solar our bills would go higher per kilowatt-hour than with them.
    Of course, under the current profit structure, APS will lose with decentralized solar; their loss is the customers’ gain. Let’s decouple their profit from product and re-couple it with service. For example, they would get more profit if the average household reduces their consumption by 100 kilowatt-hours. Another example and approach would be for the ACC to increase APS profit if the per capita service area energy use per GDP (gross domestic product) goes down.

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