Arizona Utility Customers Are Funding Lobbying Against Public Health Regulations

The Cholla Power Plant near Joseph City, Arizona.
The Cholla Power Plant near Joseph City, Arizona. squeaks2569 via Flickr
Arizona's three major utilities charge their customers for membership in secretive groups that lobby against federal regulations to protect public health.

Those groups are the Utility Water Act Group (UWAG) and the Utility Solid Waste Activities Group (USWAG). Utilities say that membership in these groups help them understand complex environmental regulations. But these decade-old groups have also lobbied fiercely in recent years against regulations aimed at protecting public health and the environment, such as clean water and coal-ash disposal rules.

Arizona Public Service, Salt River Project, and Tucson Electric Power are all members of the Utility Solid Waste Activities Group, spokespeople for those companies confirmed. USWAG is housed under the Edison Electric Institute, an industry association representing investor-owned utility groups.

Arizona Public Service and Salt River Project are both members of the Utility Water Act Group, run out of the law firm Hunton Andrews Kurth. Tucson Electric is not a member of the water group.

All three companies charge their customers for costs of membership in these groups, according to their respective spokespeople.

SRP spent about $141,000 of ratepayers' money in 2018 on membership in both groups, said Scott Harelson, the company's spokesperson.

APS spends about $130,000 a year on both groups, also from customers. It joined UWAG in March 1999, and USWAG in 2009, according to spokesperson Suzanne Trevino. Since then, the costs of membership in USWAG had ranged from $37,000 to $39,000 a year, and for UWAG, between $50,000 and $90,000 a year.

Tucson Electric spent about $28,600 on USWAG membership in 2018, paid through the Edison Electric Institute, TEP spokesperson Joe Barrios said, but he said that customer money did not go toward the group's lobbying activities.

"Costs related to USWAG's legislative advocacy activities are excluded from rates," Barrios said, without providing more explanation. TEP joined the group in 2005, he added, and it helped utilities to comply with federal regulations, he said.

Although the utilities maintain that membership helps them comply with regulations, the U groups have actively sought to weaken those very rules. They've fought coal-ash regulations and lobbied against limitations on effluent from power plants.

In September 2015, the EPA finalized a rule that, for the first time, set federal limits on the amount of toxic metals like arsenic, lead, and mercury that steam electric power plants, which includes some coal-fired plants, could spew into the surrounding environment.

The agency projected that this new rule would prevent 1.4 billion pounds of toxins from polluting the environment each year.

In March 2017, the Utility Water Act Group submitted a petition for the EPA to reconsider that rule, claiming that it contained "numerous flaws."

"The Rule affects both the utility and coal industries," the petition said. "It will cause negative impacts on jobs due to the excessive costs of compliance — which were grossly underestimated by EPA — and regulatory burdens forcing plant closures."

The following month, Scott Pruitt, who at the time was the head of the EPA, wrote back, saying he believed "it is appropriate and in the public interest to reconsider the rule." Later that year, the EPA formally postponed compliance dates for those 2015 rules by two years, pushing them until November 2020

Similarly, the Utility Solid Waste Activities Group challenged a 2015 EPA rule governing the disposal of coal ash, the toxic leftover from burning coal that includes fly ash, bottom ash, and boiler slag. In 2012, coal-fired power plants produced more than 110 million tons of this solid waste, which is packed with neurotoxic and carcinogenic chemicals.

In August 2018, a three-judge panel of the D.C. Circuit decided that the EPA's rules actually did too little to enforce the disposal and storage of this toxic waste. Nevertheless, USWAG was lobbying the EPA throughout, pushing for the amendment of rules that would "[threaten] the continued operation of affected power plants," as Jim Roewer, its executive director, wrote to Barnes Johnson, the director of the EPA's Office of Resource Conservation and Recovery, in December 2016.

In a footnote in its 2017 petition to the EPA, UWAG described itself as "a voluntary, ad hoc, non-profit unincorporated group of 163 individual energy companies and three national trade associations of energy companies."

It added, "UWAG's purpose is to participate on behalf of its members in EPA's rulemakings under the Clean Water Act and in litigation arising from those rulemakings."

That claim, straight from the U-horse's mouth, is very different from how Arizona's utilities claim to justify their membership in the group.

"Both organizations provide SRP with an ability to work with other utilities to better understand environmental regulations, which have grown increasingly extensive and complex," Scott Harelson, spokesperson for SRP, told Phoenix New Times via email. "This collaboration is valuable in assisting SRP with proper compliance and cost effective methods to address environmental regulation implementation," he added.

Trevino, for APS, said she had no specific comments on the U-groups' various lobbying activities. She said that APS had joined these groups "because it's cheaper and more economical to be a member of this group than to have an employee working on compliance issues." Being part of those groups helps APS stay on top of "the changing compliance requirements and [make] sure that we are in fact meeting all of the federal regulations that change quite rapidly."

APS does have in-house employees working on compliance issues, Trevino said, "but they are not just working on water, or not just specifically on air." 

Asked whether SRP planned to stay in these groups, Harelson hedged. "We are assessing our participation in these organizations and the opportunity to continue to advance policy and regulation that will aid SRP’s progress toward a more sustainable future," he wrote.

But in an emailed comment, Nick Brown, a clean-energy advocate who was elected to SRP's board in 2016, called SRP's membership in USWAG and UWAG "problematic for several reasons."

Policy, lobbying, and advocacy fell under the jurisdiction of the board, Brown said. "Yet management has concealed these activities and relationships from the board," he said.

Brown criticized the lobbying by "the U groups" to loosen environmental regulations, saying they belied their professed message to the public of being "clean and green." He questioned whether SRP's customers "would approve of these expenditures."

"SRP should cut ties with them immediately," Brown said.

A third, similar group, Utility Air Regulatory Group (UARG, pronounced "YOU-argh") dissolved earlier this month after coming under scrutiny from Democrats in the House Energy and Commerce Committee, prompted by reporting from Politico. All three Arizona utilities were members of the group, but, as New Times reported, APS quietly departed in the months before it disbanded

Bill Wehrum, the EPA's top official for air quality, formerly worked for one of the law firms that became Hunton Andrew Kurth, the law firm that represented UARG. Committee Democrats are now looking into whether the utilities that paid millions to be members of the group received special treatment from Wehrum.

UARG challenged numerous EPA regulations, such as carbon and mercury rules for coal plants and cleanup plans for haze.
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Elizabeth Whitman was a staff writer for Phoenix New Times from March 2019 to April 2020.