"The focus [of the upcoming rate hearings] can't be necessarily on history," DeMichele says. "It has to be on where we're going and on the recognition that a lot of things have changed in the process."
Much as DeMichele may want to focus all eyes forward, officials at the corporation commission and RUCO say that very attitude among company officials has resulted in sloppy management and planning based more on optimism than reality.
"Most utilities are run by businessmen, engineers or financial people, but Arizona has the distinction of having its largest utility run by two PR men," says Schwartz, referring to DeMichele's background in advertising and the rise of his mentor, Turley, from company public-relations flack.
"RUCO is on record recommending a PinWest-APS divorce because they are not paying attention to APS except as a cash cow," he adds. "Get this utility back in the hands of people whose idea of an accomplishment is to get Palo Verde up and running, not to shake Cotton Fitzsimmons' hand."
Schwartz, a former APS lawyer for environmental affairs, describes the prevailing attitude within corporate offices as "a cross between a bunker mentality and being hopelessly out of touch with reality."
"They never had any sense of how much rate shock was too much," he says.
At least one onlooker is not at all shocked by the size of the APS rate request. "It's very close to what we predicted they would seek," says Verl Topham, architect of the PacifiCorp buyout offer. "The only way they can raise the cash flow they need, within their existing resource base, is with a rate increase of that size, and we don't think it's fair to place a burden like that on the customers."
TURLEY, HIS SHOWMANSHIP intact, made sure it looked like PinWest had been rescued and its financial troubles were in the past. On February l, he led the show in describing how bankruptcy was averted in breathless, last-minute maneuvering to restructure the company's billion-dollar debt before the midnight deadline expired and creditors from New York to Tokyo converged to carve up the carcass.
With so much drama in the air, it's well to keep these facts firmly in mind: The shareholders won't see a dividend for years. The ratepayers are facing a rate hike of obscene dimensions. And PinWest's financial difficulties are far from over.
There is a way out of this mess. Somebody could organize the PinWest shareholders to fire their management, or force them to sell. But the hero for that job has yet to ride over the horizon. If anyone's interested, PacifiCorp's president is still waiting by the phone.
MUST use first pullquote
per Jana
Thanks, cj
"PacifiCorp's shortcomings shouldn't be compared to PinWest. They make mistakes but not where they've bet the ranch."
APS has no social conscience; no recognition of the state of Arizona's economy.
"They don't seem to feel they owe anyone an explanation for anything. They don't even answer their mail, for God's sake." Mythmakers don't die from public outrage, they just muzzle up until the storm passes.
PinWest owes so much money to lenders that shareholders won't see a dividend for at least two years.
PacifiCorp pledged publicly not to fire a single top manager at the Utah utility--but such a reassuring nod to the Arizona company was conspicuously missing.
Perhaps the best-known examples of regal excess are the cut-rate home loans board members approved for each other after PinWest's 1987 acquisition of MeraBank.
Already regulators are furious that PinWest took all APS profits, plus an extra $20 million from the utility in 1989.
If APS is granted the hike, its customers would be paying for the most expensive electricity in the United States.
"PacifiCorp understands APS ratepayers can't stand a big rate increase, and they are willing to eat some of the utility's debt as a good-will gesture.
