Immediately after the Steyer initiative failed at the ballot, the Arizona Corporation Commission began considering their own green energy mandate to completely ban fossil fuel generation in Arizona by 2050. The Commission’s plan was even more radical than the energy initiative, and this time the mandate was being pushed by our regulated utilities, not far left radicals. This caught most observers by surprise—the utilities were among the opponents of the Steyer initiative, and now they were cheerleading energy mandates.
Why the change of heart by our monopoly utility providers? The reason is simple—they knew that if the Commission adopted official policy requiring Green New Deal mandates, they would be guaranteed full cost recovery from their captive ratepayers. After fierce opposition from ratepayers and organizations like the Free Enterprise Club, this proposed mandate was rejected by the Commission in early 2022.
Unfortunately, this victory for ratepayers was short lived. Almost immediately after the Commission voted to reject costly energy mandates, the utilities announced that they would be implementing their clean energy agenda anyway, irrespective of what their captive ratepayers thought about it. This didn’t come as a total surprise, considering these utilities have gone all-in on Environmental, Social, and Governance (ESG) and the accompanying “Net Zero” commitments to ban fossil fuels in their SEC filings to shareholders, which our organization began advocating against at the Commission earlier this year.
We told the Commission that if the utilities are allowed to operate under ESG, every downstream policy decision would be shaped by it—ultimately resulting in massive ESG rate hikes for Arizona ratepayers. Based on the energy resource plans submitted by the utilities last month, it appears our predictions have been proven correct…
For several years, Arizonans have faced a threat of radical renewable energy mandates being imposed on our grid. In 2018, the voters overwhelmingly rejected a measure that would have required utilities to generate 50% of their energy with “renewables” by 2030. Then, in 2021, the Arizona Corporation Commission considered, and rejected, a 100% renewable mandate completely banning fossil fuel generation by 2050. But now, the utilities have voluntarily committed themselves to these goals, known as “Net Zero by 2050”, under the broader requirements of their Environmental, Social, and Governance (ESG) commitments.
A coalition of Arizona’s Corporation Commissioners have reached out to the state’s governor over concerns of rising prices for a subset of constituents.
Last month, four state commissioners wrote a letter to Governor Katie Hobbs to ask her to address the overwhelming price increases for electricity customers of the San Carlos Irrigation Project (SCIP). The signatories to the letter were Kevin Thompson, Lea Marquez Peterson, Nick Myers, and Jim O’Connor – all Republicans. Commissioner Anna Tovar, the lone Democrat on the panel, did not add her name to the letter.
The commissioners asserted that the change in costs was “purportedly related to the U.S. Department of Interior Bureau of Indian Affairs’ application of new purchased Power Cost Adjustment agreements which soared to $0.056 per kilowatt hour,” adding that “neither the Arizona Corporation Commission nor the State of Arizona has any regulatory authority over SCIP.” These added costs – on top of the customers’ electric power rates – has more than doubled the payments for many within this jurisdiction.
The lack of state jurisdiction in this matter means that the federal government would need to come to the table to resolve the crisis at hand – something that the commissioners asked Hobbs to facilitate. According to the commissioners, former Congressman Jim Kolbe had attempted to take care of this issue in the early nineties, when he introduced the San Carlos Indian Irrigation Project Divestiture Act to “complete divestiture and free SCIP customers from federal authorities.” Though this legislation passed the U.S. House and Senate and was signed into law by then-President George H.W. Bush, the policies apparently “never manifested into reality,” leading to this current unraveling of financial security and stability for these ratepayers.
In an exclusive statement to AZ Free News, Commissioner Kevin Thompson, who led the letter to the governor, said, “SCIP ratepayers are facing a terrible situation that is going to require officials at every level of government to work together like adults and find a solution for Arizonans that have been abandoned by the federal government.”
Thompson added, “Access to affordable electricity in a state like Arizona is a matter of life or death for too many and shouldn’t be a partisan issue. While the Commission has no authority over SCIP, I feel it is important to urge our leaders to explore meaningful solutions and act. These four Commissioners are willing to do whatever we can in our individual capacities to encourage our delegation and state government to put aside partisanship and get the federal government out of the business that private enterprise should be providing.”
The commissioners, in their communication to Hobbs, shared several potential solutions to the matter, which include exploring “divestiture of SCIP with the end goal of transferring generation, transmission, and customer responsibility to regulated Arizona utilities,” requesting “federal funds to provide necessary maintenance and improvements to the SCIP grid,” and researching “financial protections that can be provided to SCIP customers to increase the safety net and protect vulnerable ratepayers.”
They ended their letter with a plea for the governor and her team to do everything in their delegated authority to assist the afflicted Arizonans, saying, “It should be acknowledged that we recognize the vast majority of potential long-term solutions are outside of your control and authority as governor. However, like us, we know you are looking for meaningful solutions, and we would appreciate your willingness to advocate for Arizona ratepayers.”
This situation affecting SCIP customers has also attracted the attention of Senate Pro Tempore T.J. Shope, who issued a press release on October 23 to announce his “extreme frustration” with Hobbs’ “lack of care, concern, and action with skyrocketing power bills detrimentally impacting residents living in the SCIP.” Shope was less diplomatic in his statement than the commissioners were in their letter, writing that “Governor Hobbs is displaying she’s nothing more than an accomplice in Biden’s scheme to impose a radical energy agenda with attainable environmental goals, all for political gain, by ignoring the financial pain our citizens are experiencing.”
Before Shope went public with his comments about Hobbs’ handling of this situation, he led an October 3 letter to the governor, along with Senate Majority Whip Sine Kerr, House Majority Whip Teresa Martinez, and House Energy Committee Chair Gail Griffin, asking the state’s chief executive to “find a way to provide relief for the negatively impacted residents of the SCIP and push back against the Biden-Harris Administration on behalf of the ratepaying citizens of our state held hostage to the federal government.” The legislators’ letter echoed some of the sentiments from the commissioners’ letter, including the fact that “the legislature and Corporation Commission do not have the authority to remedy this crisis for residents because SCIP is a rare utility wholly managed by the federal government.”
As of October 23, Shope and his signatories had not heard back from the Governor’s Office about their letter. This lack of response by Hobbs led the Senator to believe that she was complicit “with Biden’s radical environmental agenda jeopardizing the financial security of Arizonans.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
The Arizona Corporation Commission (ACC) is refusing to ban the implementation of Environmental, Social, and Governance (ESG) policies in monopoly utilities operating in the state, claiming that they lack the authority to do so.
The ACC issued its declaration in response to several letters petitioning a prohibition against ESG implementation by utilities under its purview. Two of those letters came from the Arizona Free Enterprise Club (AFEC), and one came from former ACC commissioner Justin Olson.
In AFEC’s first letter, issued in late August, AFEC President Scot Mussi made the case that ESG goals and initiatives would result in unreliable services and increased costs for ratepayers. The Arizona Constitution requires the ACC to ensure utilities have “just and reasonable rates” as well as practices that result in the “convenience, comfort, and safety, and the preservation of the health” of users.
“The truth is that a forced ‘transition’ to these resources, as required by ESG, would cost ratepayers $6 billion,” stated Mussi. “This fact alone should require the Commission to prohibit it, as this body is constitutionally obligated to ensure just and reasonable rates.”
In 2021, the ACC rejected a proposed mandate for utilities to generate their resources entirely from renewables such as wind and solar following an independent study estimating the cost to ratepayers at $6 billion. Even without the ACC mandate, the state’s utilities have committed to realizing Net Zero by 2050: a goal to eliminate all carbon emissions by 2050 by transitioning entirely to renewables.
In addition to the Environmental aspect of ESG, Mussi contended that the Social and Governance policies enacted by the monopoly utilities would impact the affordability and reliability of their services. Specifically, Mussi expressed concerns with the unforetold consequences of utilities’ deprioritization of merit and cost in decision-making and prioritization of diversity, equity, and inclusion (DEI) in contracts, corporate structure, board leadership, and hiring.
“Just as corporations have a fiduciary duty to their investors and stakeholders, so too do utilities have a duty to ratepayers to provide cost effective and reliable energy. That is the lens through which RFPs should be evaluated, not ideological commitments such as DEI,” stated Mussi. “[T]his potentially unconstitutional discrimination in the workforce could subject them to litigation, the costs for which utilities will try to recover from ratepayers in subsequent rate cases.”
With no response given to the first letter, AFEC issued a follow-up letter earlier this month. Mussi reiterated that utility resource portfolios based primarily on ESG goals rather than affordability and reliability triggered ACC’s regulatory authority. Mussi claimed that ESG bans wouldn’t impair utilities’ ability to obtain investments, arguing that lenders prefer the reliability of grids based on gas and oil rather than renewables. He cited famed venture capitalist Kevin O’Leary, best known for his role on the “Shark Tank” reality show.
“The Commission should not allow foreign banks and investors to hold Arizona’s ratepayers hostage, undermining our energy independence which threatens our state’s security,” said Mussi. “[W]ell-known investors are willing to spend $14 billion to open a new oil refinery, despite the growing ‘green’ political agenda […] because ultimately it makes good policy sense and it makes good financial sense.”
Former commissioner Olson’s letter echoed those sentiments, and noted that the ACC had set a regulatory precedent by prohibiting COVID-19 vaccine mandates for utility employees.
“The Commission’s constitutional obligation is to protect ratepayers by ensuring just and reasonable rates, but the adoption of ESG is incompatible with this requirement,” said Olson. “If the Commission does not proactively prohibit the utilities from pursuing these initiatives, utilities will continue to come back to recover the costs associated with them. It will impact resource planning, every future rate case, and the reliability of our power grid.”
Yet, in the ACC response letter issued Tuesday, Commissioner Nick Myers said that the ACC couldn’t regulate the internal affairs of parent companies from which the public service corporations receive their ESG goals and initiatives. Myers agreed that clean energy mandates resulting in higher rates and unreliability of services were problematic.
“Generally, the Commission has the authority to control rates but not the authority to control the utility itself, particularly its internal affairs,” said Myers. “This is especially the case when regulated utilities implement goals and initiatives handed down from parent companies, which are not public service corporations and which the Commission does not regulate. That being said, I agree that clean energy mandates or self-imposed clean energy goals that unreasonably drive up rates for customers or jeopardize reliability are problematic.”
Myers noted in his letter that the ACC could only address ESG policy impact on rates and reliability through the Integrated Resource Plan (IRP) process. The IRP process allows parties to intervene and introduce evidence proposing the implementation or discontinuation of utility programs, especially those impacting rates and reliability. Myers encouraged AFEC to intervene in future rate cases by engaging in the IRP process.
“The IRP process and rate cases are therefore the best venues to address utility goals and initiatives that may be driving up costs for ratepayers and jeopardizing safe and reliable service,” said Myers.
Myers declined to address the social and governance issues presented by AFEC, declaring that these were outside of ACC purview.
AFEC President Scott Mussi replied to Myers in a response letter on Thursday. He noted that AFEC has been involved in the IRP process, which he contended was “controlled by the utilities” and lacking the ability to counter ESG impact.
“[U]nless ESG is prohibited by the Commission upstream, every downstream policy and ratemaking decision at the Commission will be shaped by it,” said Mussi. “The failure with [Myers’] approach is that it guarantees that all future resource plans will be ESG resource plans and all future rate hikes will be ESG rate hikes.”
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
In a since-deleted article, “Three Women-Led Organizations That Helped Flip Arizona Blue,” principal actors behind several of the most powerful leftist dark money organizations in the state bragged about engineering Democratic voter turnout in the 2020 election.
Vianey Olivarria, then-communications director and current executive director for Chispa AZ, credited work done by her organization and others to turn out Democratic voters. Olivarria also served as a director of Activate 48, a coalition of Black, Indigenous, People of Color (BIPOC) organizations.
“Arizona turning blue is a victory a decade in the making and owed to the tireless work and dedication of Black, Brown, and Indigenous people who organize for justice and liberation,” stated Olivarria.
Chispa AZ is a 501(c)(4) project of the League of Conservation Voters (LCV), another 501(c)(4), and sponsored by Way to Win, a national donor network aimed at defeating Republican candidates. Way to Win served as the sponsor to Progress Arizona, formerly and once again led by Gov. Katie Hobbs’ ousted spokeswoman Josselyn Berry.
Per the IRS, a 501(c)(4) organization may engage in political campaigns on behalf of or in opposition to candidates so long as those activities aren’t the organization’s primary activity.
Discrepancies exist in various organizations’ tax returns disclosing contributions to Chispa AZ’s political arm, Chispa AZ PAC. Neither “Chispa AZ” or “Chispa AZ PAC” exist within the IRS database. Also, Chispa AZ has claimed the same EIN as LCV publicly; however, different organizations’ tax returns have cited multiple, nonexistent EINs for Chispa AZ.
In their 2018,2019, and 2020 tax returns, LCV listed an EIN number for Chispa AZ PAC that yielded no results in the IRS Tax Exempt Organization database. In their 2019 tax return, LCV listed an organization called Fuerte Arts Movement for the Chispa AZ PAC’s address, and listed the same EIN number from 2018. They used the EIN again in their tax return.
In the 2019, 2020, and 2021 tax returns from the California-based Grove Action Fund, a different address and EIN number from that used by LCV were listed for Chispa AZ PAC. The listed address was the correct address for Chispa AZ; however, the EIN listed also doesn’t exist in the IRS database.
Planned Parenthood Advocates of Arizona’s 2020 tax return listed that same nonexistent EIN number as well, and offered the Fuerte Arts Movement address.
Tax returns from the Green Advocacy Project (2020) and the Wilderness Society Action Fund (2019) also listed the nonexistent EIN given by LCV, but listed the correct address.
Publicly collected data reflects that Chispa AZ PAC has managed at least around $8.5 million in contributions since 2017. Yet, Chispa AZ has claimed to have total revenues of nearly $26.9 million, net assets of over $18.4 million, and expenses of over $18.9 million.
Chispa AZ is also part of MiAZ, a coalition of nonprofits focused on turning out minority voters.
Other Chispa organizations exist in Colorado, Florida, Maryland, Nevada, and Texas.
Chispa AZ isn’t the only dark money entity lacking a clear IRS status to have an outsized impact for Democrats in recent elections. There’s also the two Arizona Asian American Native Hawaiian and Pacific Islander (AZ AANHPI) related organizations: AZ AANHPI for Equity and AZ AANHPI Advocates. Although AZ AANHPI wasn’t featured in the deleted 2020 article, their communications director was: Alexa Rio-Osaki. She spoke on behalf of a different dark money nonprofit also part of MiAZ: Our Voice, Our Vote.
“We’re doing what we can to ensure everyone’s represented,” said Rio-Osaki.
Rio-Osaki has her hands in multiple leftist dark money organizations: in addition to AZ AANHPI and Our Voice, Our Vote, Rio-Osaki served as the director of Progress Arizona.
Recently, AZ AANHPI for Equity has engaged in lawfare against non-party conservative organizations, demanding transparency of private documents while operating in the dark itself.
AANHPI for Equity and AZ AANHPI Advocates have independent websites, social media pages, and staff, yet the pair are presented as one entity in multiple locations (for example, on the AZ AANHPI for Equity “about us” page). Both were founded in July 2020 by Jennifer Chau, who has served as the director for AZ AANHPI for Equity, an unspecified nonprofit, and executive director for AZ AANHPI Advocates, a 501(c)(4) nonprofit, since their inception according to her LinkedIn page.
According to the IRS, AZ AANHPI Advocates had its federal tax exempt status automatically revoked in mid-May for not filing any tax forms in the entire three years of its existence (EIN:85-2344934). The IRS issued its revocation posting earlier this month. No IRS records exist for AZ AANHPI for Equity.
Yet, both organizations’ websites continue to solicit donations and market themselves as nonprofits. The Arizona Corporation Commission (ACC) awarded AZ AANHPI Advocates good standing for its status as a nonprofit in mid-July as well. No ACC records exist for AZ AANHPI for Equity.
Like Chispa AZ, AZ AANHPI has used EIN numbers of another organization in receipt of funds. In 2021, AZ AANHPI for Equity received $25,000 from Solidago Foundation and gave the EIN belonging to One Arizona, the 30-nonprofit coalition to which all five Arabella Advisors nonprofit arms issued funds. Also that year, AZ AANHPI made its name synonymous with “One Arizona” and used its EIN in its receipt of $35,000 in funding from Asian Americans Advancing Justice.
On its website, AZ AANHPI Advocates discloses that it receives funding from top leftist dark money organizations The Future We Need and Arizona Wins!. The listed address for The Future We Need is the same address for the Arizona Education Association and Progress Now Arizona (now Progress Arizona); yet, no such organization as “The Future We Need” exists per ACC, the IRS, the Federal Election Commission (FEC), or the secretary of state’s campaign finance databases. There does exist a similarly-named dark left political action committee (PAC) entity, “The Future We Want.”
In their entire three years of advocacy and fundraising, only AZ AANHPI Advocates had any campaign finance records filed within the state: just one receipt of $10,000 from Invest in Arizona in August 2021, for “signature gathering.” According to the secretary of state’s campaign finance database, AZ AANHPI has never filed any reports on their contributions or expenditures.
The deleted article was published by Supermajority News: a project of Supermajority and the Supermajority Education Fund, the latter a project of the Arabella Advisors’ New Venture Fund. Arabella Advisors is behind one of the biggest dark money funding networks in the nation; their shadowy dealings prompted the District of Columbia attorney general to issue subpoenas to the organization last month.
Along with their Arizona-based compatriots, Supermajority will also be working to turn out more Democratic voters in the upcoming 2024 election.
Last year, Supermajority reported turning out over 959,000 voters: nearly 116,200 in Arizona. The organization had over 8,000 active members in Arizona. Supermajority reported that they ensured the turnout of 30 percent of women ages 18 to 35 years old, specifically to ensure the re-election of Sen. Mark Kelly and election of Gov. Katie Hobbs. The organization disclosed that their approach consisted of contacting female Democrat voters that sporadically voted in presidential elections but hadn’t voted in midterm elections.
“At the state level, we were able to help elect and support progressive governors who would protect and expand women’s freedoms in their states,” stated Supermajority.
Supermajority took credit for Kelly’s re-election and Hobbs’ election, declaring that 92 percent of Kelly’s margin of victory was made up of their voters and that their 116,200-voter turnout far surpassed Hobbs’ 17,100-vote margin.
The organization also noted its plans for the upcoming 2024 election: contacting 432,300 female Arizona voters who didn’t vote last year, overcoming the projected 10,500-vote victory margin, and electing a Democratic senator to take independent Sen. Kyrsten Sinema’s seat. The organization also plans to target Georgia and North Carolina.
“We need a Democratic senator in AZ who will work alongside Sen. Mark Kelley [sic],” stated Supermajority.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.