Márquez Peterson: APS Put 'Unjustified Gag Order' on Commissioners Over AG Probe

Shhhhhh.

We are under investigation by the Attorney General's Office, but you can't say anything about it.

That was the message from Arizona Public Service representatives to the offices of at least two Arizona Corporation Commissioners the morning of December 11, about an hour before a public meeting in which regulators were set to question the utility's executives about problems with the company's rate comparison tool, which happened to be the subject of the AG's investigation.

Commission staff also told commissioners that they had to keep mum about the investigation, because it was "confidential," Arizona Corporation Commissioner Lea Márquez Peterson wrote in a letter filed Wednesday afternoon.

"According to Chief Counsel, the prohibition against disclosure was written in statute and bringing up the investigation during Open Meeting would violate Arizona law," she wrote.

Yet two days later, APS disclosed the investigation to 12 News.

"I'm very frustrated," Márquez Peterson told Phoenix New Times in a phone interview on Wednesday. "I trusted the opinion of our chief counsel, and certainly took APS at their word that it was against statute to speak about it."

She said that APS called her policy adviser roughly an hour before the meeting December 11, telling him about the investigation and saying that commissioners could not talk about it, per law.

"It was right as we were preparing to walk in" to the meeting, she said. Midway through the meeting, Robin Mitchell, the commission's chief counsel, reminded her to keep the investigation under wraps, she said.

Mitchell did not immediately respond to questions from New Times about her requests to commissioners not to discuss the investigation during the open meeting.

To Márquez Peterson, it seemed that either the utility didn't want its executives to face direct, public questioning about the investigation, or something changed so that it later decided to volunteer the information, she told New Times.

After reviewing statute, she concluded that either APS had broken the law in disclosing the case to the media, or that the company knew that no such law applied and instead "chose to actively deceive commissioners by misrepresenting such a standard in an effort to avoid public scrutiny," she wrote in her meeting.

In fact, at that very meeting, which focused on the botched information that APS's rate comparison tool dispensed to at least 10,000 customers, Márquez Peterson asked executives, "What else is there?" They could have disclosed the investigation right then and there, she said.

But as the meeting began, not all five commissioners were on the same page. Some, including Peterson, knew of the investigation. Others did not.

Commissioner Justin Olson told New Times his policy adviser notified him just before the hearing December 11.

Part of the message he received was that the Corporation Commission's chief counsel indicated that he couldn't disclose the investigation because it was ongoing, he said.

Olson said that the requests that he and other commissioners keep silent about the investigation during the meeting "did not strike me as odd."

He said he was more concerned with an independent investigation that Corporation Commissioners had ordered into the rate comparison tool. That was his own constitutional obligation, he said, and that was separate from the mandates of the Attorney General's Office. 

Commissioner Sandra Kennedy said she did not learn of the AG's investigation until after the meeting that day, which ran into the evening.

She told New Times that she was busy prior to the meeting, so staff would not have had the chance to tell her anyway. She said that once she was told — after the meeting — staff did not explicitly warn her not to disclose the investigation.

At least one other commissioner, Chairman Bob Burns, had only inklings that an investigation was under foot.

“When I was told, it was my understanding that it was something that was sort of in the rumor category," he told New Times. "We didn’t want to talk about it if it was in the rumor category still.”

His impression was that if it wasn't official, it shouldn't surface in the meeting, he said.

It wasn't until after the meeting, when local reporter Dennis Welch with CBS 5 News/3TV (KPHO and KTVK) called him to ask about it, that he realized it was real. "That was when I realized that it was official and actually happening," he said.

He too said he was focused on moving forward with the Corporation Commission's own investigation into APS's faulty rate comparison tool.

In her letter, Márquez Peterson requested that, by January 3, APS explain why they felt justified in telling commissioners that they couldn't discuss the AG's investigation and provide documentation related to the investigation — and any other state investigations.