PHOENIX — Three newly elected members of the Arizona Corporation Commission (ACC) were sworn into office on Monday.
Incumbent Lea Marquez Peterson, a Republican, took her oath at Commission offices in Tucson, and in a 3-2 vote was later selected by her colleagues as the new chair of the board that sets most Arizona utility rates, and regulates financial securities, railroads, and pipelines.
Commission newcomers Anna Tovar, a Democrat and Republican Jim O'Connor took their oaths behind a plastic divider at the Phoenix ACC offices. They join current Commissioners Justin Olson, a Republican, and Democrat Sandra Kennedy.
In what could be an omen for how this new commission may operate, Marquez Peterson secured her role as chair with votes from the only two Democrats - Kennedy and Tovar. Both O'Connor and Olson voted for Olson, citing a tradition of having the most tenured commissioner from the majority party hold the chairmanship.
Marquez Peterson, first appointed to the seat by Governor Doug Ducey in May 2019, has emerged as the centrist of the new Commission where Republicans hold a 3 to 2 majority. But that majority is split over the new proposed clean energy rules that would require that utilities get energy from carbon-free sources by 2050. The policy updates are considered by some to be the most consequential for utilities since they were first adopted in 2006.
In December 2019 Peterson joined Commissioner Kennedy in the 4-1 majority vote with the last Commission to pass the new rules after then-Chairman Bob Burns introduced an amendment to remove a mandate that utilities use particular types of clean energy. It was added specifically to get Marquez Peterson on board and it worked. The lone no vote was current Commissioner Justin Olson who wanted to include a spending cap on utilities to reduce the amount they can recover from ratepayers. But the rules will not be made permanent until the formal rule making process is completed with public comment and a final Commission vote.
O'Connor was the only Commissioner to include an element in addition to his oath with a prayer from a pastor. In his remarks after being seated, he recalled his unusual path through a write-in campaign, crediting both God and his wife for the unlikely win.
Tovar and O'Connor are replacing term-limited Chairman Burns and Commissioner Boyd Dunn who was removed from the primary ballot after losing a court challenge to the signatures required to run.
The ceremony also served as an emotional farewell to public service for Burns who recounted his 30 years in elected office. During that time, he served in the Arizona House, Senate and on Central Arizona Project board.
First elected to the ACC in 2012, Burns took on Arizona Public Service (APS) throughout his tenure: often without other Commissioners' support.
After its refusal to comply, in 2016 Burns issued subpoenas to APS and its parent company Pinnacle West, for information about secret political spending in support of two Commission candidates the company believed to be more favorable to them during the 2014 election cycle. While not connected to their campaigns, eventual winners Tom Forese and Doug Little, both Republicans, were the beneficiaries of $3.2 million in spending through a third-party group that was widely believed to be bankrolled by APS. The utility sued the Commission and a judge ruled that the subpoenas could not be enforced without majority consent of Commissioners, which he did not have.
But after the election of Commissioner Kennedy in 2018, Burns had an ally. In February 2019 Kennedy threatened a subpoena of her own. Burns again made an information request of APS, along with Dunn. Olson also indicated he would support a subpoena.
By April 2019, APS began releasing detailed documentation of political spending which confirmed APS' involvement in political spending in the 2014 Commission race as well as documents showing how the utility monitored and coordinated responses to perceived threats. The disclosure prompted more public scrutiny and culminated with a much-anticipated appearance of then-CEO Donald Brandt to answer Commissioners questions in a public meeting. Current CEO Jeff Guldner has since vowed that the company would stop spending on Commission races.
In his departing remarks Commissioner Dunn passed out kudos to staff and thanks to fellow Commissioners for what he called the “common desire to tackle difficult issues and policies that prior Commissions have decided to bypass.” He cited the passing of ethics rules and the selling of the long-troubled Johnson Utilities water company in San Tan Valley.
Chairwoman Marquez Peterson announced several priorities for her first 100 day as chair including addressing the workload of Commission staff, beginning the official rulemaking process of permanent disconnection rules, and streamlining rate cases for small water companies.