In the two weeks since I wrote this post about APS going too far, folks have been asking me why APS has taken the extraordinary step of trying to handpick its own regulators. Isn't this type of behavior really rare?
Yes taking it this far is rare, but I remind people that APS has made some questionable moves in the past. Interestingly enough one of the company's most outrageous ploys has recently taken a new twist.
Nearly ten years ago, John Dougherty wrote this extraordinary article for New Times. Here's his opening paragraph.
The Arizona Public Service Company's sale of a one-acre paved parking lot to Maricopa County Supervisor Mary Rose Wilcox and her husband smells like trout left rotting in the Phoenix summer sun.
You would do well to read the entire article, but the bottom line is that Dougherty makes a compelling case that APS sold the property to Mary Rose Wilcox at well below fair market value. History has confirmed Dougherty's interpretation; the Wilcox's have managed to use the lot as collateral for an ever increasing series of loans, and the tax records certainly imply that the land is worth much more than Wilcox paid for it.
APS, of course, does a tremendous amount of business with the county. In fact, here partial list of business that APS has done with the Maricopa County since the land deal. As you can see, Wilcox is a very active participant in APS business before the County. The County has also managed to hire more than it's share of former APS employees--and for its part APS has hired its share of former County employees.
When Dougherty asked Mary Rose Wilcox about the obvious conflict of APS selling her property with a large built-in gain while the company does business before the county, Mary Rose had this (rather lame) response.
The county supervisor said no conflict of interest existed because her lucrative deal with APS was a one-time transaction.
Dougherty--to his credit--points out how ridiculous her response was.
That is simply ludicrous. A 2,000 percent return on investment in two years is something one tends to remember for a while, don'tcha think, Mary Rose?
Now For the Twist...
Mary Rose is running for Congress...and Congressional disclosure statements require more information than County disclosure statements. So what do we learn now that Mary Rose has to provide more detailed disclosure? How's this for a smoking gun:
That's right. Nearly 10 years after getting the lot at below market rates, Mary Rose Wilcox collects rent from APS....on the lot that the company sold her. We can't tell how much APS pays Mary Rose each month, but for the year 2013, the payments are listed in the category of $15,000 to $50,000.
So much for a "one-time transaction."
Speaking of transactions, I pointed out above that APS engages in extensive transactions with the county and that Mary Rose rarely--if ever--recuses herself. However most of those transactions are nickel and dime stuff for a company as large as APS. But that's about to change. APS's biggest transaction with the county is pending NOW. Check out this article from the Republic's Ryan Randazzo
Arizona Public Service Co. plans to spend $600 million to $700 million dismantling the two steam generators at its Ocotillo Power Plant and replacing them with five shorter generators...
I'm sure you are familiar with the Ocotillo power plant....after all, it's in Tempe next to ASU. Notice this next part of Randazzo's article.
In addition to OKs from the city and Maricopa County, the project will need approval from the Arizona Corporation Commission and Department of Environmental Quality.
That's right. APS needs permission from Maricopa County in order to build the plant. Furthermore, the County permit will probably be the hardest one to obtain. That's because it's the County that issues the AIR PERMIT--and since metro Phoenix is a non-attainment area for both PM10 and Ozone...and since the new plant will produce a tremendous amount of both pollutants, the air permit is likely to be a problem.
But APS has a plan....if those five new generators can somehow be grandfathered then APS can avoid new source review--which is essential, because there's no way that the five new generators could be approved using the higher standards of new source review.
So APS is going to build a power plant in the middle of metro Phoenix and it appears the company will face little if any opposition. For contrast, check out the outrage that SRP faced when it wanted to build a sub station in Gilbert. Give me a break, that's a sub station. APS is putting five generators in the middle of Tempe. But don't worry. APS has a GREAT relationship with Maricopa County and the County has plenty of former APS employees on staff--and plenty of new Supervisors who will be eager to accept their recommendations...institutional memory and all that.
Meanwhile, Mary Rose Wilcox has resigned from the County in order to run for Congress. And despite a lifetime of public service, she brings a surprisingly large amount of personal financial resources to the table. Indeed, she would fit in quite well in Washington.