New questions about Arizona regulators' ties to APS

Questions about APS' coziness with regulators

The five people we elect to the Arizona Corporation Commission have enormous power -- deciding how much you'll pay for electricity, whether you'll pay more for solar.

But for almost two years, since the explosive debate over boosting solar fees in 2013, there have been questions raised about how much power the state's largest utility, Arizona Public Service, has over the commission that regulates it -- and what APS will spend to hold on to that power.

In February, 12 News broke the story of a Corporation Commission whistleblower who alleged former commission chairman Gary Pierce held secret get-togethers with APS' chief executive, Don Brandt. The attorney general's office is now investigating.

Now there's new evidence suggesting another Republican commissioner has been playing footsie with yet another APS executive, as well as with the head of a "dark money" group.

Commissioner Bob Stump exchanged 56 text messages over two months last summer with Barbara Lockwood, APS' liaison to the commission, according to Stump's phone logs, which were obtained by the Checks and Balances Project and reviewed by 12 News.

Stump was commission chairman at the time. The flurry of text messages in July and September came as APS was seeking a delay on setting new electric rates.

The phone logs also show Stump exchanged 100 text messages over six months with Scot Mussi, the head of the Arizona Free Enterprise Club, a "dark money" group that played a major role in the 2014 Corporation Commission elections.

Records at the Secretary of State's office show Mussi's conservative non-profit spent $453,105 in anonymous donations to support Republicans Tom Forese and Doug Little, both APS-backed candidates. Forese and Little won the two open seats.

The Corporation Commission election last year was one of the nastiest and the most expensive ever held. APS was widely believed to be doling out anonymous donations to "dark money" groups helping its candidates. APS will neither confirm nor deny that.

(Mussi also funneled $384,478 into Justin Pierce's unsuccessful bid for secretary of state in last year's Republican primary, according to state records. Justin Pierce is Gary Pierce's son.)

Former Republican Corporation Commissioner Bill Mundell said he was outraged by Stump's behavior, labeling it "abnormal" for a commissioner.

"What were you thinking? Why would you do this?" said Mundell, who served on the commission from 1999 to 2009.

"Commissioners are not legislators. They're supposed to avoid even the appearance of bias or prejudice."

The Checks and Balances Project, a Washington, D.C.-based clean-energy advocate that's taking on utilities across the country, fought the Corporation Commission to get access to emails from Stump's personal account, as well as text messages sent on his mobile phone. Stump's mobile phone is paid for by Arizona taxpayers.

The commission provided logs of both voice calls and text messages on the phone. The text messages cover 10 months -- from May 1, 2014, to March 11, 2015.

The Checks and Balances Project is now discussing how to get the content of those text messages.

Stump and Lockwood also traded emails on his personal account -- tracking pro-solar campaign groups and sharing news reports critical of solar leasing companies

"I don't think they were talking about the Diamondbacks or the Cardinals or the opera that many times," Mundell said of Stump's texts with Lockwood.

Stump, who is out of town, emailed this response about his texting with Lockwood:

"Ms. Lockwood and I - and scores of other stakeholders - communicate via text if I need to reschedule a meeting or if she needs to schedule a meeting on a pressing matter and my assistant is not available. Substantive policy discussions occur in my office, where they belong."

APS said in a statement:

"Barbara Lockwood is the company's liaison to the Arizona Corporation Commission. She deals with the commission staff every day. That's her job."

APS spokesman Jim McDonald said he didn't know the content of Lockwood's texts but he wasn't concerned about what they might show. "There's nothing about (the texts) that shouldn't exist," he said.

Stump had this to say about his texts with Mussi:

"Scot Mussi and I have known each other for nearly 15 years. We have had lunch on several occasions this past year, and we have been trying for months to coordinate a double-date to the Phoenix Symphony with his fiancé. Given that Scot is a long-standing friend, there is no conflict of interest."

Stump's logs show his 100 text exchanges with Mussi occurred over just six months of the 10-month period covered by the phone logs. The texts began June 28, 2014 -- coincidentally as spending on the Corporation Commission primary was beginning -- and ended six months later, on Dec. 29, 2014.

"I can't imagine what the conversations would be about," said Tim Hogan, a former attorney for the Arizona Corporation Commission who now argues before the commission on behalf of citizens.

"We don't know that right now, but it sure raises a lot of questions."

Both APS' McDonald and Stump criticized the Checks and Balances Project as a left-wing group funded by anonymous donors.

Wednesday morning, shareholders of APS' parent company, Pinnacle West, will vote on a resolution that would force the company to disclose APS' own "dark money" donations.

There was one text exchange between Stump and APS CEO Don Brandt, in August 2014. Stump said he couldn't remember what it was about.

The Corporation Commission employee who made the whistleblower allegations against Gary Pierce had said in a letter in February that he warned Stump last August about Pierce's contacts with APS CEO Brandt. The whistleblower said Pierce's meetings during ongoing rate cases could nullify Corporation Commission decisions, because the meetings might violate commission rules.

Mundell said the warning to Stump bolsters the whistleblower's letter. "I think it gives (it) a lot of credibility," Mundell said.

The letter apparently gave Stump and current Commission Chairwoman Susan Bitter Smith their only reason to text each other during the 10-month period covered by the logs.

The records show Bitter Smith and Stump exchanged 54 text messages over the three days after the whistleblower letter was received: 36 texts on Feb. 18; 16 texts on Feb. 19; and two texts on Feb. 20.

They had exchanged no texts before the letter and have exchanged none since.


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