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12/14/2012 10:11:00 AM
Expenditure reports show Realtor money swayed Corp. Commission election

Howard Fischer
Capitol Media Services

PHOENIX -- The state may be getting an all-Republican Corporation Commission because of a last-minute move by the Arizona Association of Realtors to get a panel they think will be friendlier to their issues.

And hanging in the balance could be higher costs for existing electric ratepayers.

Campaign finance reports show the organization, with the aid of its national parent, spent more than $186,000 on two mailers designed to drum up support for incumbent Bob Stump and challengers Bob Burns and Susan Bitter Smith.

The amount is significant in this race because all three Republicans, along with the three Democrats, were running with public financing. And that limited them to $137,811 apiece.

Final results had Stump retaining his seat, with the other two ousting incumbents Paul Newman and Sandra Kennedy. The third Democrat, Marcia Busching, also lost.

The margin of difference between Newman, as the top Democrat vote-getter, and Bitter Smith at the bottom of the GOP was 66,874 votes. About 2.3 million Arizonans went to the polls.

Tom Farley, who until recently was the organization's chief executive officer, told Capitol Media Services the decision to get involved was deliberate.

He said the Realtors never paid much attention to the commission, which regulates the rates charged by privately owned utilities. "We were apathetic toward the Corporation Commission,' he said.

But all that changed in 2007 when the panel voted to scrap existing regulations which required the utilities -- and, by extension, all their customers -- to absorb the cost of line extensions to new homes being built away from existing utility poles.

Until that, it used to be 1,000 feet of free wiring, at least for customers of Arizona Public Service. Tucson Electric Power gave 500 feet of free line; its UNS Electric sister company which serves parts of Mohave and Santa Cruz County, had allowed 400 feet.

"And they did it kind of in a blink of an eye,' Farley said.

He said that caught the realtors by surprise.

Farley said the change had "a severe effect on a number of property owners,' particularly those with undeveloped home sites. The result, he said, was that much of the state's private land became worthless.

The Realtors even produced a study showing that for every 100 homes that are not built because of the cost of getting power, the state loses 112 jobs and more than $5.5 million in wages.

Commissioners, in a series of rate cases for the three utilities, have since reinstated the policy. But that did not always suit the two Democrats.

In one case, Kennedy issued a written dissent to putting the free lines back in place, saying she was concerned that it would mean future rate increases for other customers. And she specifically took aim at claims by others that the 2007 decision to make new homeowners at the edge of development pay their own way somehow led to the collapse of the housing market.

"As we all know there were many factors and parties that led to the collapse,' she wrote. "To assign blame on a single entity's action is disingenuous.'

Kennedy said that the free line extensions for some homeowners ultimately will increase the costs for everyone else, "for nothing is free of cost.'

While the Realtors eventually got their way -- on a 3-2 party line vote with Republicans in favor -- the whole experience left a lasting impression on Farley and his Realtors.

"We decided at that point we learned a valuable lesson: We were never going to be apathetic about folks that were running for that office,' he said. Line extension issues aside, Farley said the Realtors concluded they also needed to have a say in who makes the final decision on rate increases for both water and power.

Farley said the Realtors could not support Newman or Kennedy.

"Both had openly stated while the commission was still meeting ... that they were opposed to the line extension policy,' he said. "So we knew right away those were candidates we did not want to support.'

And Farley said Busching took a similar position.

Conversely, he said Stump voted to reinstate the free line extensions. And he said both Burns and Bitter Smith assured him that they would not vote to once again require individual property owners to pay for their own line extensions, at least not within the free footage now permitted.

Farley said there was a conscious decision to hold off sending out the mailers until the last possible moment. "We wanted to get election-day voters,' he said.

There were two sets of mailers.

Both, Farley said, stressed the need for a balance in where Arizona generates its electricity rather than relying on only renewable sources. The only difference is that the one aimed at registered Republicans also took a slap at the energy policies of President Obama.

That is similar to the theme of the mailings by the three Republicans. But Farley was required to keep his activities separate from that of the candidates themselves.

Farley said, though, he was careful not to attack solar power -- or even the existing mandate on utilities to generate more energy from renewable sources -- saying there is a strong positive feeling among voters toward solar.

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Reader Comments

Posted: Saturday, December 15, 2012
Article comment by: Carl Nye - Jerome

Seems like there is a fine line between "swayed" and "bought".

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