How much more will fraud investigation into APS find?
Meet the “new day” at APS. Sadly, not a whole lot different than the old day.
Last week, new APS CEO Jeff Guldner and several of his top lieutenants – with straight faces one and all – told the Arizona Corporation Commission that the utility had been steering customers to more expensive rate plans only since February 2019. That they first learned about the problem in November.
“It is our responsibility to do better and you have my commitment that we will do better,” he told the commission.
Since then, Commissioner Sandra Kennedy has disclosed that customers have been complaining since August 2017 that the utility’s online rate comparison tool was giving them bum advice. And that APS knew about it all along.
Now Attorney General Mark Brnovich has launched a consumer fraud investigation into APS, a revelation first reported on Friday by 12 News’ Joe Dana.
An AG spokesman confirmed to me that APS is under investigation but declined to get into specifics, citing a law requiring confidentiality. Spokesman Ryan Anderson did acknowledge that the probe, which is civil in nature, was not initiated as a result of any complaint filed with the agency.
“There was enough information in the public domain that sparked our interest,” he told me.
If you’re APS, you’re probably hoping those hundreds of thousands of dollars spent to get Brnovich elected work their magic.
If you’re the rest of us, you just hope for a real investigation into what the heck has been going on here.
At least some members of the Corporation Commission, by the way, knew about the AG’s investigation into the faulty rate comparison tool before
last week’s public hearing into the rate comparison tool yet kept quiet about it.
Commissioner Justin Olson told me he learned about the AG’s consumer fraud investigation shortly before the Dec. 11 public hearing but was advised by the commission’s lawyer not to bring it up because such investigations are supposed to be confidential.
Olson called it “absolutely appropriate” that the AG’s Office investigate, along with the independent investigation ordered last week by the Corporation Commission.
“The benefit of the doubt needs to be with the ratepayer ...“he said. “It has already become clear APS made a significant error in directing folks to plans more expensive for them. I can’t really accept as fact that the error began in February because APS tells us it began then.”
Commissioner Leah Marquez Peterson didn’t return a call to discuss it but instead filed a letter to the docket disclosing that it was APS itself that told commissioners to keep quiet about the AG’s investigation. So naturally, it never came up in the public hearing that followed the same day.
Peterson has given APS until Jan. 3 to explain “this unjustified gag order of the commission.”
“I feel as though APS took action deliberately to mislead the commission in an effort to avoid the public embarrassment of having us directly question the
CEO on this investigation in a public forum,” she wrote.
If so, then it’s worth pointing out that the commission’s staff attorney went along with it. But I digress ...
APS landed in its latest dung heap in November after a utility watchdog blew the whistle on the company’s rate comparison tool — the one set up to help customers slog through the confusing array of rate plans set up when APS raised its rates in 2017.
As if we aren’t already paying enough, turns out APS’ rate comparison tool has been steering customers to plans even more expensive than the ones they were on.
Naturally, the Corporation Commission had to pay attention once that became public. And naturally, an army of APS executives dutifully appeared in public to apologize.
The problem, they assure us, began in February and no more than 10,000 customers wound up with bigger bills thanks to APS’ advice.
Except that Commissioner Sandra Kennedy found out otherwise.
Kennedy says she obtained more than 8,000 pages of “complaints, inquiries and opinions” about APS that have been lodged with the commission since 2017.
Complaints like this one, on Aug. 24, 2017 — just nine days after the commission rubber-stamped the rate hike that introduced a new set of rate plans that would require a degree in rocket science to figure out:
“I found out today from a representative at APS who contacted me that the rate comparison box was inaccurate and has been temporarily removed from their site. Apparently, it was putting out much higher increases due to a software glitch.”
And this one, from December 2017: “I was using their rate plan comparison tool on the APS website too [sic] compare my current plan to the new rate plans that they are encouraging people to switch to. Their tool made it look like some of the new plans would result in costs close to the same as my current plan, but when looking closer they are falsely making them look better than they are.”
Then there is this February 2018 notation from a commissioner staffer documenting her contact with an APS consumer advocate about a customer’s complaint: “APS advised her (the customer) that the Company was currently experiencing an issue with the Comparison tool.”
Fast forward to November 2019, when watchdog Abhay Padgaonkar blew the whistle and The Republic’s Ryan Randazzo wrote about it.
APS executives then quickly acknowledged the problem, insisting it was news to them and promising to not only credit customers but give them
$25.
And oh yeah, announcing that the problem began in February 2019 and that it’s now fixed.
In other words, there’s nothing to see here.
Except, of course, that problems really began in August 2017 and APS did nothing to fix it until it became public more than two years later.
“Customers screamed their concerns about the tool from the rooftops, and no one listened,” Kennedy wrote.
APS said complaints cited by Kennedy “are completely unrelated to the error that caused the tool to generate inaccurate rate plan recommendations for some customers beginning in February, 2019.”
In other words, there are multiple reasons why APS customers were steered to more expensive plans? Maybe the AG can sort it out.
I can think of only two possible explanations for what happened here:
1. Either Guldner and his executives are playing fast and loose with facts about when the problem began and when they learned of it.
2. Or they don’t know what’s going on inside their own company.
I’m not even sure which to hope for. Here’s what I do know: Every APS customer who has been paying more than they needed should get an immediate refund.
Plus something for their inconvenience. Something that’ll add up to a whole lot more than $25.
APS’ rate comparison tool was steering customers to more expensive plans.