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Brnovich releases details of behind-the-scenes negotiations with APS

Documents provide a glimpse into more than a year of negotiations and legal maneuvering between the Attorney General’s Office and APS.

ARIZONA, USA — Arizona Attorney General Mark Brnovich’s office released more than 700 pages of emails and correspondence between a team of AG investigators and attorneys for Arizona Public Service, dating back to November 2019. 

The documents provide a glimpse into more than a year of negotiations and legal maneuvering between the AG’s Office and APS.

In February, Brnovich announced the results of those negotiations, resulting in a first-of-its-kind settlement with the utility on behalf of ratepayers. APS leaders admit they’ve made mistakes through community outreach and a faulty rate comparison tool, but deny they intentionally misled ratepayers.

What we learned

Among the details in the documents:

  • AG attorneys issued three “Civil Investigative Demands” (CID’s) that covered a broad range of issues within APS dating back several years.
  • AG attorneys sought details related to APS’s flawed rate comparison tool, its purpose, the creator of it, how APS became aware the tool was flawed, and the number of customers negatively impacted.
  • AG investigators expanded their initial rate comparison tool probe to include data error issues by APS and an unfulfilled promise by APS regarding the excess amount of money customers would pay ($120 annually) if they were not on their most economical plan. The expansion of the investigation led to the eventual $24 million settlement.
  • APS attorneys put up strong resistance against the credibility of the investigation, claiming Brnovich’s office didn’t have jurisdiction to investigate them because an authority on these issues remained exclusively with the Arizona Corporation Commission.
  • APS attorneys also argued that the Arizona Consumer Fraud Act didn’t apply to this investigation.
  • General Brnovich’s office threatened to sue APS if the two sides could not reach a Feb. 10, 2021 deadline.
  • AG attorneys were closely involved in persuading APS to post clear, easy-to-understand FAQs for consumers about its rate plans and plan comparison tool.
  • There are no written requests by AG attorneys to interview former CEO Don Brandt, who oversaw APS when key decisions were made by the company.
  • There is no evidence AG investigators determined a total amount of damages to consumers as a result of APS’s alleged incompetence. At least one consumer advocate estimates the total amount is many times more than the amount agreed upon in the settlement.

The documents provided to 12 News do not give a complete picture of negotiations. State law gives the Attorney General’s Office discretion over what details of an investigation’s findings to make public.

A “good faith” investigation by Brnovich’s Office

Under the settlement agreement, 210,000 customers who would have saved at least $120 over a year’s time if they had been on their most economical rate plan, will each get a $98 check. Another 17,500 customers will receive varying payments based on faulty communication by APS dating back to 2017.

12 News asked a longtime consumer advocate to review the documents. Abhay Padgaonkar has played a pivotal role at the Arizona Corporation Commission in recent years by exposing problems at APS.

Padgaonkar said he agreed the documents reflect the investigation was “a good faith effort” by the AG’s office.

“I am pretty impressed with the investigation. Though we only know what we can see,” Padgaonkar said. “It seems like a professional, thorough investigation… And more importantly, this is the first time a public utility has been held responsible under the consumer fraud act.”

“If you remember the Attorney General said this was a historic and consequential settlement. I agree with him.”

Assessing damages to consumers

Although Padgaonkar is complimentary of Brnovich for reaching the settlement agreement, he questions why the settlement wasn’t higher and why the AG’s Office didn’t publish an assessment of overall damages to ratepayers.

“My assessment of the damage is $89 million per year and this has been going on for more than 3.5 years so relative to that, this seems like a slap on the wrist,” Padgaonkar said.

Brnovich has stated previously that the settlement avoided potentially years of litigation in court.

Regarding damages, 12 News asked a spokesperson of the AG’s Office if investigators attempted to determine an overall amount.

“We did attempt to assess the total damages. Like we do in every case, we consider the overall scope of possible damages, the evidence, the ability to prove our case and the legal merits of any potential defense,” said Katie Conner, spokesperson for Brnovich, in an email to 12 News.

Do you believe you are owed money?

Consumers who believe they are owed a restitution check from APS should contact the Arizona Attorney General’s Consumer Department at 602-542-5763 or at consumerinfo@azag.gov.

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