Most of the attacks on an Arizona ballot measure to increase that state’s use of renewable electricity have been lobbed by Arizona Public Service (APS), the state’s largest monopoly utility.

APS opposes the initiative, which would require it to generate 50% of its electricity from renewable energy sources like wind and solar by 2030, instead favoring continued investment in gas plants.

But in late March, an attack against the ballot effort came from a less expected place when two legislators from Phoenix broke from their Democratic peers, who have supported the effort, to write a fiery op-ed decrying the initiative. The op-ed closely adhered to attack lines that APS has used in its own arguments against the initiative.

In order to meet the initiative’s renewable requirement, utilities would have to immediately make massive investments in additional solar plants (which can run into the billions of dollars) … Those costs would be passed along to the ratepayers: Arizona families,” Sen. Robert Meza and Rep. Cesar Chavez said.

The attack from the legislators seemed odd, especially since Meza and Chavez voted with their Democratic colleagues several weeks ago against a legislative maneuver drafted by APS. The bill, which was signed by Governor Ducey, would allow  the utility to ignore the renewable energy requirements if the ballot initiative passes, since it replaces existing penalties with a fine of as little as $100. In 2017, Pinnacle West, APS’ parent company, recorded earnings of $488.5 million.

An investigation by the Energy and Policy Institute may explain part of the reason for the op-ed: Meza has received thousands of dollars in personal income for work he’s done for a number of groups that also receive major funding from APS. One of the organizations includes an APS lobbyist on its board of directors.

In a statement and phone call, Meza denied that the income he has received from the organizations with financial ties to APS impacted his position on the initiative.

“I have been extremely passionate on Renewable Energy throughout the years but the Initiative that was dropped to the Secretary of State was poorly written,” Meza said. “As a leader and an independent thinker for my constituents I had to think of them and their best interests.”

Meza claimed that he soured on the initiative, and decided to write the op-ed, because of a study from the Arizona State University Carey School of Business which asserted that the initiative would cause job losses.

“I called ASU to ask if they knew anything about the initiative,” Meza said. “Once I saw their information, it raised a red flag.”

Meza said that he was unaware that APS had commissioned and paid for that study. The study was dated March 19, one day before Meza’s op-ed was published, and was not released to the public until April 2.

“I didn’t know it was funded by them,” Meza said. “I believed it was a cross analysis of everything. I thought they were just a nerdy group of people studying the whole issue.”

APS is Meza’s top all-time donor

Meza has offered Democratic cover to APS’s political efforts in the past. He was one of eight legislators who signed a 2016 letter that APS admitted to writing which offered vague and generic praise to the state’s utilities. APS then sent the letter to the Arizona Corporation Commission in a way that offered the appearance of support from the public officials for the monopoly’s efforts to increase customers’ rates. Other legislators who signed the letter said that APS duped them, but Meza said that he had no problem with it.

Pinnacle West has given Meza $7,682 over the course of his career, according to the National Institute for Money in State Politics and the Arizona Secretary of State’s Office, making the company his biggest donor.

Meza receives income from multiple charities supported by APS

Meza is not unique in claiming APS as his top donor – the utility is routinely one of the top contributors to Arizona’s politicians – but Meza’s potential conflicts of interest with the utility run much deeper.

Arizona requires all public officials to file financial disclosures listing any income over $1,000. Meza declared that in 2017, he received income from a number of non-profit organizations that have funding or board relationships with APS. Meza was not required to list the exact sum he received from each of the non-profits, though he did have to describe the services he rendered for them. In each case, Meza listed his work as “marketing/branding”:

  • Meza received income from Chicanos Por La Causa (CPLC), a community development group. CPLC submitted a letter in 2015 to the Arizona Corporation Commission supporting APS’s plan to raise fees on rooftop solar customers.
  • Meza received income from The Armory, a tech startup incubator for veterans. APS lists The Armory as a grantee.
  • Meza received income from the PSA Behavioral Health Agency, a service agency for people with behavioral illnesses. Chad Guzman, one of APS’s top lobbyists, sits on the agency’s board.

Meza said that the relationships created “no conflict of interest.” He said that he has worked with CPLC for the past 20 years on behavioral health issues, and that in the last two, they “pulled me in to target Hispanic youth to get them into wellness programs. Has APS been a contributor to them for the last 20 years? Yes, they have been,” he said.

He said that the relationship with Guzman, the APS lobbyist on PSA Behavioral Health’s board, did not affect his position on the renewable initiative.

Guzman, the APS lobbyist who sits on the PSA board, touted the Meza op-ed on Twitter, saying “It’s so refreshing to see some fellow Democrats willing to stand up against @TomSteyer and his regressive agenda.”

A few hours after EPI initially emailed Meza for comment, but before this article was published, Guzman lashed out at EPI on twitter.

More Board Ties Between Meza and APS-funded groups

Meza also sits on the board of Jewish Family and Children’s Services, another behavioral health non-profit. APS is listed as a lifetime “family visionary” donor for giving JFCS over $250,000, and as a “family patron” for giving the non-profit at least $25,000 between October 1, 2015 – September 30, 2016, according to the organization’s 2016 annual report.

Meza did not respond to specific questions about whether his roles with those organizations involve raising money, but fundraising is often a key responsibility for non-profit board members. He said he is “more of a strategic planner for those groups,” offering an example of helping PSA connect with federal agencies for grants.

Rep. Cesar Chavez, a freshman who co-signed the op-ed with Meza, did not receive significant funding from APS in his only campaign in 2016, and does not have obvious ties to the utility.

Meza based rejection of initiative on APS-funded study

Meza told the Energy and Policy Institute that he had initially supported the ballot initiative, even going “door to door” supporting it with his constituents, but that he changed his mind upon reading the APS-funded study from the Carey School.

Meza also said that he would prefer that the initiative require utilities to meet the same renewable target by “2037 or 2038.” He also suggested that Arizona might not have the infrastructure to support high amounts of renewable energy.

“I’m not an expert, but if you’re going to put a system in place, where’s the infrastructure to do it properly? Do we have the infrastructure? I’m just using my commonsense gut, and my gut isn’t there,” Meza said. “People say, they’ve done it in California, but California has 20 million people, and a tax base to set up the infrastructure. What does Arizona have, 4 million people?”

California has a population of 40 million, and Arizona of 7 million. Much smaller states than Arizona, including Hawaii (100% by 2045) and Vermont (75% by 2032) have set significantly higher renewable energy goals.

The claims of economic disaster that APS has touted based on the study it funded do not align with independent analyses of how renewable energy standards affect customers’ rates.

Professor Wes Hersche, a Senior Sustainability Scientist with the Global Security Initiative at ASU, studied the effect on rates of Renewable Portfolio Standards like the one proposed in the ballot initiative. In a peer-reviewed study which Hersche summarized in a Medium post, he found no correlation between renewable portfolio standards and customers’ rates. The study APS funded has not been peer-reviewed.

A Department of Energy lab has also studied whether renewable energy standards impact electric rates, finding that the benefits of the policies outweigh the costs. The DOE lab’s most recent study from 2017 found that “RPS costs … equates to 1.6% of average retail electricity bills in RPS states.” That study did not consider the benefits of an RPS on health, but other DOE studies like this one from 2016 did measure those economic benefits and found that they outweighed any costs.

A forward-looking study, which was peer-reviewed and published in Environmental Research Letters in September, modeled the effects of more aggressive RPS increases, and found that even in the most conservative scenarios modeled, the air quality-related economic benefits of renewable standards alone outweighed the costs.

Meza asked to be sent other studies on the topic but did not say whether he regretted publishing the op-ed without learning that APS funded the Carey School study, or reading other ones.

“I used my instincts,” Meza said. “I generally have good instincts on stuff.”

“If there’s a study that counteracts [the APS-funded study], I would love to write another article that says ‘now we have both sides of the story. Now that we have both, let’s look at the facts’,” Meza added.

Meza did not respond when asked whether the Hersche, DOE, and Environmental Research Letters changed his opinion.

July 10, 2018 Update: This post was updated to reflect the $2,000 campaign contribution Pinnacle West made to Robert Meza on June 4. Meza filed his Q2 2018 campaign finance report on July 5.

Posted by David Pomerantz

David Pomerantz is the Executive Director of the Energy and Policy Institute.

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