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Nor was that the only benefit to be gleaned. In fiscal years '87 and '88 Pinnacle West showed combined profits of $552 million based largely upon the government-imposed profits of APS. According to the highly respected Citizens for Tax Justice in Washington, D.C., Pinnacle West paid no federal income taxes during that period. In fact, Pinnacle West took in a $10 million refund. Turley and the boys were rolling the dice, speculating, to become richer than Pharaoh and they were doing it off the profits from ever-growing electric bills.
Monthly bills of $300 to $400 to cool an average home are now commonplace. In central Phoenix, an apartment complex with 132 units of what is euphemistically referred to as "affordable housing" finds it near impossible to keep tenants in the summer because the air-conditioning bill is higher than the rent. (Not all of the homeless, you see, were displaced from mental institutions.) And those worried about utility bills should know that APS is expected shortly to ask for a phased-in 20 percent increase in rates. PacifiCorp, whose electric rates are about half of APS', has promised a maximum rate increase of 2 percent if it buys APS.
We are told by state regulators that Pinnacle West cannot raid APS for money to revive its failing businesses. Therefore we are not supposed to worry about Arizona's largest utility. Nonetheless, the Corporation Commission still allows APS to divert $200 million a year in dividends to the parent holding company.
And there are other costs tied to Turley's gambles. APS has laid off more than 1,200 people in the past two years. Because of Pinnacle West's terrible collapse, APS' securities were downgraded by Standard and Poors, Moody's, as well as Duff and Phelps. This negative review by the financial services industry will be reflected in higher utility bills. And next Thursday, December 7, the feds are threatening to pull the plug on MeraBank. No one knows if they will actually follow through; Corporation Commissioner Renz Jennings describes the face-off between Pinnacle West and the U.S. government as "blinksmanship" that will cost consumers no matter how it turns out. The thrift's bad loans stand currently at $1 billion and the meter is running.
It is time for Keith Turley to sell APS to PacifiCorp and to pay off his debts at Pinnacle West.
But how do you tell a pig who has always slopped at a monopoly-financed trough that the swill is gone?