SRP, regulators meet often
There’s been lots of talk lately about the so-called “secret” meetings that former Arizona Corporation Commission member Gary Pierce had with the CEO and other executives at the biggest utility he regulated, Arizona Public Service Co.
The Arizona Republic covered the issue a week ago, and the story is available online at: azc.cc/1zEYIzL.
Pierce met 11 times with APS CEO Don Brandt while Pierce was a commissioner. The five commissioners regulate rates and other policies.
Industry observers debate whether it is useful to have regulators lend an ear to a regulated utility so often. The communication might help them make better decisions, but on the other hand, the relationship might be too cozy.
It’s hard not to notice the discrepancy between APS and Salt River Project over their relationships with their regulators. When a Corporation Commission member meets with APS officials, it draws a public outcry. The Washington, D.C., area Checks and Balances Project is even investigating the commission for its ties to utilities.
Over at SRP, the other big utility in the state, those kinds of meetings are business as usual. SRP isn’t regulated by the commission. SRP is governed by the board of directors. The utility managers don’t meet privately with board members 11 times in eight years, as Pierce did with the APS chief executive; they meet much more often.
It is common practice at SRP for the 14 board members, president and vice president to have lunch with managers privately after monthly public board meetings.
At one February public meeting as a rate increase was under consideration, SRP General Manager Mark Bonsall called for a lunch break during which the SRP officials gathered in the back of the meeting area together, outside the view of the public, before they reconvened later that day and approved the rate hike.
Growing bonus
The parent company of APS, Phoenixbased Pinnacle West Capital Corp., is perennially mentioned as a takeover target by bigger utilities, especially mergerprone Berkshire Hathaway Energy (formerly MidAmerican). APS officials routinely explain that they do not comment on rumors and speculation, especially those regarding a possible company acquisition.
The latest Pinnacle West proxy statement sent to shareholders reveals that had such a takeover, or a “change in control,” occurred last year, President/CEO Don Brandt would have earned $35 million from the deal.
The prior year, his change-in-control payout was valued at $28.8 million. In 2010, it was $6.6 million.
Brandt’s total compensation in 2014, including salary, pension value, stock awards and other items, was reported as $9.3 million.
Brandt’s change-in-control package would include all of his outstanding performance shares of stock ($8.98 million), restricted stock ($9 million) and other awards, including severance benefits ($8.77 million).
Solar rankings
The annual solar rankings from the Solar Electric Power Association came out last week. As usual, Arizona utilities showed up on the lists of those with the most solar.
APS ranked No. 6 nationally for solar megawatts added last year (91). Pacific Gas and Electric in California (1,504) was No. 1.
Tucson Electric Power (73 mega- watts) was No. 8 on that list.
APS ranks No. 4 nationally for the most cumulative solar on its system (805 megawatts). PG&E also tops that list.
TEP ranked No. 10 on the list of watts of solar power per customer. Pickwick Electric Cooperative in Tennessee topped that list, followed by another coop.
APS was No. 4 in the list of solar interconnections in 2014 with 7,931. Again, PG&E was No. 1 with 45,265 new solar connections.
APS has the No. 5 spot for cumulative interconnections with 31,806, and SRP is No. 9 with 12,127. PG&E has 151,642 to lead the list.
Salt River project was No. 9 on the annual interconnections list with 4,109.
Solar sales and ethics
The local solar trade group Arizona Solar Energy Industries Association has an interesting educational session later this month for members: Sales and ethics training.
The description for the daylong seminar May 28 includes: “Foundations for realistic solar financial projections in Arizona. Making promises: lessons learned from the AZ attorney general suit. Slippery slopes: signs and symptoms.”
Phoenix solar company Stealth Solar’s owners agreed earlier this year to pay as much as $92,000 in restitution to customers they deceived and $20,000 in attorney fees in a settlement with the Arizona Attorney General’s Office.
Similarly, Going Green Solar agreed to repay customers up to $111,000 to settle a consumer fraud lawsuit filed by the Arizona attorney general. Manager and President Jesse Gee also agreed to pay up to $120,000 in fines and $17,000 in attorneys fees.
For more information on the seminar, go to www.ariseia.org.