APS Parent Company Gives $10K to Anti-Legalization Campaign, Consumer Advocates Cry Foul

Customers of Arizona's largest utility shouldn't be forced to help contribute to an anti-marijuana-legalization campaign, consumer advocates say.

As Phoenix New Times reported on Monday, Pinnacle West Capital Corporation, the holding company for Arizona Public Service, made a recent donation of $10,000 to Arizonans for Responsible Drug Policy, a group led by Yavapai County Attorney Sheila Polk that's fighting to keep cannabis a felony in Arizona.

APS released a statement to New Times on Monday afternoon asserting that "no customer money went toward the contribution."

That's the same song the company sang in the debate over its apparent financial support of APS's favored Arizona Corporation Commission candidates in 2014.

Its line of reasoning: Pinnacle West, a public company, is allowed to make a profit under its monopoly status and can do whatever it wants with that profit. In December, APS's president and CEO, Don Brandt, told the Corporation Commission in a letter that it doesn't have to disclose information about political contributions that are "made out of shareholder profits." (In a subsequent opinion, Arizona Attorney General Mark Brnovich stated that the five-member Commission could order a utility to produce its accounting books.)

Chandler attorney Tom Ryan, whose activism helped oust ex-Corporation Commissioner Susan Bitter Smith from her post last year, says the excuse is bunk.

"They are taking our money and using it for private speech purposes," Ryan says. "There's no benefit to us. They're helping out some buddies who are helping them out. That's all."

The money earned by shareholders "didn't come from earthworms," Ryan argues. It all starts with money from ratepayers who are compelled to pay APS for electricity if they live in APS territory.

The utility has about 1.1 million customers and covers a vast portion of the 1,000-square-mile Phoenix metro area, with Salt River Project covering most of the rest.

Corporation Commissioner Bob Burns has been among the critics of APS/Pinnacle West for its shady campaign financing.

"Simply put, dollars that APS has received from ratepayers in order to recover the costs of providing utility service should not be used for political speech," Burns wrote in a December letter to Brandt demanding the utility be more transparent. "Unfortunately, I have thus far seen no evidence that such funds are not being spent on political speech."

Amelia Timbers, energy program manager of As You Sow, an Oakland-based nonprofit that encourages corporate responsibility, says Pinnacle West's contribution to ARDP violates the company's own policy about political donations and "potentially alienates customers, stakeholders, and shareholders that do not share the controversial political views of the company's management."

The company's website states that it participates in the political process "to advance our long-term business interests and the interests of our customers, employees, communities, and shareholders."

Timbers calls the $10,000 contribution "bizarre," arguing that it has nothing to do with providing electricity. The contribution, she says, seems to be "the clearest example yet that [Pinnacle West's] political spending reflects its executive management’s personal agendas rather than valid business purposes."

With its contribution to ARDP, Pinnacle West potentially alienates customers and shareholders who don't share the political views of management, Timbers contends. "Pinnacle West’s task is to increase the company’s value, not to risk its brand by using shareholder capital to intervene in the War on Drugs," she says.

Through spokesman Jim McDonald, Pinnacle West tells New Times that its donation to Polk's group does, in fact, advance the company's long-term business interests.

"Our concern emanates from the employment-law language in the proposal, especially considering the public-safety aspects involved in supplying reliable electric service to APS customers," says McDonald. "The initiative simply does not support the kind of workplace required to operate the electric grid, make repairs to the system after a monsoon storm, or operate the nation’s largest nuclear power plant. No customer money went toward the contribution."

ARDP and legalization opponents have repeatedly used the fearmongering talking point of dangerously stoned employees.

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McDonald would not elaborate on the statement. But ARDP and legalization opponents have repeatedly used the fear-mongering talking point of dangerously stoned employees. Pinnacle West appears to have swallowed ARDP's Kool-Aid on that line of thinking.

The initiative proposed by the Campaign to Regulate Marijuana Like Alcohol in Arizona, expected to be on the ballot in November, does indeed change the game for employers. [Clarification: It's unclear how or if the initiative may affect the ability of employers to set policy regarding marijuana for their employees. As noted below in the original story, the law specifically allows employers to do what they've always done.]

The proposal, which is poised to submit more than enough signatures by July 7 to qualify for the ballot, would make possession of personal amounts of marijuana or live plants legal for adults 21 and older, and sets up a system of about 150 retail shops statewide that would sell cannabis products.

The law explicitly states that it doesn't "require an employer to allow or accommodate" impairment or possession at work.
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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.
Contact: Ray Stern