Ted Simons: Good evening and welcome to this special Vote 2014 edition of "Arizona Horizon." I'm Ted Simons. Tonight's show is a debate. We'll hear from candidates competing in the republican primary for two open spots on the Arizona Corporation Commission. As with all of "Arizona Horizon's" debates, this is not a formal exercise. It's an open exchange of ideas, an opportunity for give and take between candidates for one of the state's most important offices. As such, interjections and even interruptions are allowed, provided that all sides get a fair shake. We'll do our best to see that happens. The Arizona Corporation Commission is mostly known for its regulating authority over public utilities, but the commission's responsibilities also include judicial, executive, and law making authority. Four republican candidates are competing for two open spots on the commission. They are, in alphabetical order, state lawmaker Tom Forese. Doug little, who has worked in the computer software industry. Former state lawmaker, Lucy Mason. And former mayor of Paradise Valley, Vernon Parker. Each candidate will have one minute for opening and closing statements. Earlier we drew numbers to see who goes first. That honor goes to Vernon Parker.
Vernon Parker: And I hope I am first on the ballot. And my auctioneer skills will begin. Yes, I am a graduate of Georgetown University’s law school. I served as a special assistant to President George H.W. bush. I was general counsel of a federal department. Also, I was nominated by President George W. Bush and unanimously confirmed you the United States Senate as an assistant secretary. I have my own small business. I served on the Paradise Valley Town Council for six years. Never missed a single meeting, never missed a single vote. Served as the mayor of Paradise Valley, and we had some very difficult times. And during those times, I worked with the council, worked with our town manager, and it was in 2008, some of the most difficult times that our country has ever faced, and our town faced the same difficulties. And in that, we cut our budget by 30%. Cut our staff by 20%. But the thing I am most proud of is that I was asked by the Speaker of the House to give the rebuttal to the President of the United States of America, someone coming from my background, that was awesome and I would love your vote. Thank you.
Ted Simons: Thank you very much. For our next opening statement, we turn to Lucy Mason.
Lucy Mason: Thank you, Ted. I am Lucy Mason. I'm a former Prescott City Council member and I was elected to and served eight years in the House of Representatives, four of those years on Energy and Water. I have a lot of experience in working on energy issues, working with all of the players, working with the utilities, working with the water companies on some of the most serious issues here in the state. I’m married to Rex. I have four grown children and five grandchildren, but what that means to me is that I am a problem solver. I have worked very hard in my legislative career to solve problems and I keep hearing that from the folks that I worked with from the utilities. They tell me all of the time how I worked to bring them together to solve really tough solutions. I am very, very proud of my record. I'm very proud of how I have worked with people in budget issues, in tough times. And I am asking for your vote.
Ted Simons: Very good. Thank you very much. Tom Forese now with our next opening statement.
Tom Forese: Hi, my name is Tom Forese. My wife Casey and I have been married for 15 years. We have four children, Jack, Mattie, Tommy, and Alley. I serve as the CEO of a small business in Mesa called the Hive, which is an education software and services company. I've served in the legislature for the last four years. The last two years as the Chairman of Commerce and the Chairman of the International Affairs Ad Hoc. My focus is on making sure that Arizona is in the right direction. I believe that rightfully we are the capital of the southwest and I think that economic development needs to be paramount foremost. I think that jobs solve a lot of problems. We just come out of the worst recession in our lifetime. And I believe that at the Corporation Commission we have a tremendous opportunity to improve the economy and put Arizona in the right direction. And so I'm asking for your support.
Ted Simons: Thank you very much. And Doug little now with the final opening statement.
Doug Little: Hi, I'm Doug little. As Ted mentioned, I am a retired computer software executive. I spent 30 years in the technology industry, with my last position being vice president of North America sales for a $400 million software company. Fifteen of those 30 years that I spent in technology industry were directly related to industries involved in energy production, energy generation, management, and operations of energy companies. So, the reason I'm running for this office is that I have a great deal of experience having actually done this from a feet on the ground perspective. I have been in Arizona for 16 years. I'm married to my wife, Linda. I have a 24-year-old daughter who just graduated from ASU, and I'm very happy to be here tonight. And I would also ask for your support in voting for Tom and I this August.
Ted Simons: Okay, thank you very much. Let's get it going here. The primary responsibility of the Corporation Commission. What is it? Vernon.
Vernon Parker: Oh, without a doubt it is to protect the rate payers. What we have in our state is we have regulated Monopolies and under the Arizona Constitution, article 15, section 3, it gives the Corporation Commission the authority and the du jour right to protect the rate payers. Because what we're dealing with is -- we are dealing with regulated Monopolies and so the Corporation Commission along with RUCO, they are there to make sure that it is a fair and balanced playing field.
Ted Simons: Lucy, what do you see as the primary responsibility of the Corporation Commission?
Lucy Mason: Well, again, I have to say protecting the rate payer. You know, the bill payer, the person that is a tax payer. Whether it is an individual, whether it is a business, whether it is an industry, we are taxed to death. And I -- I just -- I see that we have to -- we have to stand up always with the rate payer.
Ted Simons: Tom.
Tom Forese: Well, you know, Ted, the Commission does a number of things. There are nine departments there. But foremost, of course, is setting the rates for the utilities. I think Vernon and Lucy are dead on protecting the rate payer is key, but I think more specifically is how we do that. We must focus on a balanced portfolio, balancing safe, clean, reliable energy at the lowest possible price.
Ted Simons: Primary responsibility. What do you see?
Doug Little: I'm in complete agreement with Tom. Essentially, the primary role of the Commission is to set the rates that consumers pay for electricity, water, and natural gas. And as Tom was saying, in order to make sure that we deliver clean, reliable energy at the lowest possible prices, what we have to have is a balanced energy portfolio. And unfortunately, a lot of our rate payers in Arizona don't understand the importance of the Commission. And how it affects their daily lives, I mean, more than any other office in state government, the Commission reaches into the pocketbooks of every single person.
Ted Simons: Vernon, do you think the Commission should promote renewable energy in Arizona?
Vernon Parker: Absolutely. But let me comment quickly on something that Doug said; they may not understand the nuances, but what they do understand is when they get their utility bill. I got mine today. I opened it. And I said to myself, oh, my goodness, this is a very, very big bill. And so, you know, they do understand that. But getting back to your question as far as renewables are concerned, without a doubt, we live in one of the most energy rich states in the world. And, so, I think the marketplace is a definite driver to make sure that renewables can, you know, are sustainable, but renewables will be a, without a doubt, a part of Arizona, not just today, but in the future.
Ted Simons: Do you agree with renewable energy standard?
Doug Little: Yes.
Ted Simons: Agree with the standard?
Lucy Mason: I do.
Ted Simons: Do you think it should be changed in any way?
Ted Simons: You know, at this point, I don't. There may be some time in the future where we need to do that. We’re going to have new technologies coming on board. It’s not going to be just solar, but solar will be improving, other technologies that will be coming in and will be very viable that we need to pay attention to. And, yeah, I think at some point I think we may need to revisit that.
Ted Simons: Revisit that you think?
Tom Forese: I tell you, not only do I support it, where it is right now, but I think people need to understand we're a leader, nationally and internationally in solar, photovoltaic and nuclear. So I think we’re in a good spot and I think we need to maintain that.
Ted Simons: For those who do not think we're in a good spot and not happy with the standard, how would you respond?
Doug Little: Well, here’s the thing, Ted. What you need to understand is that every different type of generation, technology, has a cost profile. And if we’re going to keep costs as low as possible, we have to be mindful of that cost profile and balance it correctly. For example, nuclear has a leveled cost of about 2 ½ cents a kilowatt hour -- clean coal is about 3 ½ cents. Natural gas is about 4 ½ cents. But some of our renewables, like photovoltaic and solar concentrators are in the 14 to 20 cent range. So what happens is if we have too much renewables in our portfolio, costs would necessarily go up.
Ted Simons: Too many renewables in your portfolio?
Vernon Parker: Absolutely not. Because I'm a firm believer in the marketplace. And the marketplace will determine who succeeds and who fails. And we have seen a lot of strides when we look at certain portfolios that we thought were dead, and then they resurrect themselves. I am a firm believer in that the marketplace should be the driver in these situations.
Ted Simons: Is it possible -- please respond.
Doug Little: Can I comment?
Ted Simons: Yes.
Doug Little: Europe has been way ahead of us in exploring renewables. They have been down this path. And, in fact, one thing I would like to point out is that Germany currently has a renewable energy portfolio that involves 33% renewables. And what you need to understand is the cost impact that it has on the consumer. Germany's energy on average costs 29 ½ cents a kilowatt hour. If we start dramatically increasing the percentage of renewables before the cost profile associated with it goes down, what happens rates are going to necessarily go up. In the case of Germany, you know, we're talking about 9 ½ cents an average kilowatt hour rate in the wintertime and 14 cents a kilowatt hour in the summertime in Arizona.
Tom Forese: Ted, may I add something to that? I’d like to give two sides here. On one hand, last week I got to meet with executives from eBay in California. eBay loves Arizona, and there is talk inside of corporate offices of them moving the entire company to Arizona. I would love to see that. Now, in order to get eBay to come out here, they have an energy policy. They want to be 100% renewable. That is something that we need to talk about. Here’s the the other side of the coin. What is the largest user of electricity in Arizona? It is the Central Arizona Project bringing water in from the Colorado River. And when does it move the water? It moves it at nighttime. And so, you rely on a source of energy for our largest user that works at night. So, where is the balance between these two things? It is there and that is what we will --
Ted Simons: We are hearing balance, but we are hearing possibly too much in the way of renewables in a portfolio.
Vernon Parker: And the marketplace --
Ted Simons: And the marketplace, but let's get Lucy's response here.
Lucy Mason: You know, I think that there is room here for the new technologies that are going to be coming in. And they are. I'm hearing about them almost on a daily basis. When I was in the legislature, I heard the same type of thing. There is a big push to try and get us energy independent here in this country. And there are ways to do that. There needs to be a balance. There needs to be an investigation on how can we best do this. APS right now is doing a study in Flagstaff on solar. And how is that going to impact, what are the costs and how is this going to impact the rate payer? We need to have those results.
Doug Little: Can I make an observation?
Ted Simons: Quickly, please.
Doug Little: Talking about energy independence, right now today we have 180-year supply of coal in the United States. We have a 200-year supply of natural gas in the United States. We have the resources to be able to generate energy without going to outside sources right now.
Ted Simons: Very quickly --
Vernon Parker: And we have an infinite sun.
Ted Simons: We do. You mentioned clean coal earlier. Is there such a thing as clean coal?
Lucy Mason: Oh, it is all over the map. It is all over the map. We have all different grades of coal. We happen to have right up here in Arizona, in the northeast part of our state, we have a coal plant that is actually burning very well. And it is -- the emissions are next to nothing.
Ted Simons: Such a thing as clean coal?
Vernon Parker: Yeah, yeah. Well, here is -- you know, one of the things that I think I'm flabbergasted about is what the EPA has done. They have inserted themselves in the state of Arizona. We need to call upon the Attorney General and the Governor to pursue to make sure that the EPA steps out because what happens is this. And I will be very quick here. We have tap water, water from the Colorado River that is being pumped up to the desert 2,000 feet. And if that goes up in cost, then every rate payer in this state will suffer. So, we must make sure that we curtail unelected officials creating laws in our country that affects the state of Arizona and the rate payers.
Tom Forese: Yeah, the EPA, or the ‘Employment Prevention Agency,’ has been a real problem in Arizona. I will say that I have compared the Navajo Generating Station to other coal plants on the east coast and it is night and day. What the Navajo Generating Station does is top rate. They raised the bar. And I think they should be applauded for what they do and, instead, they're being attacked and the difference that they're making, the issue is the visibility of the Grand Canyon cannot be determined by the human eye. And so what they're doing is they're jeopardizing energy, which means the economy in Arizona for something that is fractional and not determined by the natural eye.
Doug Little: To go on what Tom just said, the Navajo Generating Station exceeds emission standards set by the EPA for plants that were built and started in 2012. And it is a 30-year-old plant.
Ted Simons: I want to start with you on the next question regarding net metering, the monthly fees for roof top solar users. Is net metering a good thing?
Doug Little: It is a very complex issue. The reason it is complex is because there are a lot of factors that we have to consider. The big issue is how do we make sure that everyone pays their fair share to maintain the grid? And the analogy that I would use is what we do with gasoline tax for highway maintenance. All people that buy gasoline pay a tax. And that goes to highway maintenance. If you have an electric car, you use less gasoline. And as a result of using less gas -- gasoline, you pay less taxes into the gasoline tax. But you still use the roads. And I’m not saying that you should not have electric cars. What I'm saying is that the grid should be maintained and everyone should pay their fair share.
Ted Simons: How do you pay a fair share when it sounds like just in general terms whether you want to use gasoline or what we are talking about specifically here, it doesn't seem sustainable, it doesn’t seem sustainable that particular model.
Tom Forese: Well, let me take a huge step back here. First of all, I love what the solar industry is doing. I think it is great. What we're going to see in the next decade is nothing short of amazing. Once the battery technology matures, we're going to see areas on the reservations, areas in third world countries that will have sustainable and dependent energy for the first time and it should be applauded. This issue of net metering should have been handled in a rate case. I would have preferred to see it that way. You need to look at it in depth and look at it on all sides. It is sustainable. It can work. You just have to make sure that you find the balance and that is done in a rate case.
Ted Simons: If it’s done in a rate case that means the few and far between and some suggested it needed to be done quicker. But just net metering in general, is this a sustainable model? Is it fair?
Vernon Parker: Well, look, it is the law in 43 states and the District of Columbia, and it's, you know, the -- for the viewers, a simple way to describe it is that it is like roll-back minutes on the cell phone. And, so, I think that net metering has its place. I agree that it should have been decided in a rate case, and I also agree that the Commission took the right stand because of the fracturing or the arguing parties, they all agree that this should have been done. But it should be in a rate case. Because I think that -- and the APS rate case is coming up in 2015. RUCO can step in. We can have testimony and we can actually see what net metering really -- the effect that that has.
Tom Forese: Can I add something?
Ted Simons: Very quickly, please.
Tom Forese: In watching that thing go down, there were forces from out of the state that really disappointed me. That issue is about Arizona. And Arizona has a future as the capital of the southwest and to have other companies from out of state come in and act like they did, they need to know Arizona is a great place to do business, but they need to work with us and not against us.
Ted Simons: Lucy, please.
Lucy Mason: I completely agree about the rate case setting. The net metering issue belongs to -- belongs in the Corporation Commission to be studied and to be listened to and this is the -- that judicial part of our Corporation Commission. You've got to hear all sides of this before you can actually make solid decisions, but I do agree, I do want to say, that I do agree with the decision that the Corporation Commission made with that 70 cents for kilowatt hour. I think that was a good solution for the time being. But we do need to open that case up again.
Ted Simons: Let's talk about the controversy regarding taxes on leased solar panels.
Vernon Parker: Thank you.
Ted Simons: Should solar firms pay that tax?
Vernon Parker: Well, first of all, what I disagree with the most is that we have unelected officials in our state passing laws that affect seniors, churches, seniors, churches, schools. What we have seen is that this should have gone through the legislature. It should have been signed by the governor. But we have outside forces or big special interest coming in, levying this tax --
Ted Simons: Who are the special interest? Who are you talking about here?
Vernon Parker: I, you know, the lobbying forces -- one of our biggest Corporations in the state. They said that they supported this tax. APS said that they supported it. But it should not have been passed by an unelected official in this state. It should have gone through the legislature. It should have been signed by the governor. Real quickly, we have seniors on fixed incomes. We have churches, nonprofits, we have schools, and these folks lease this. They are not owning. They don't own this.
Ted Simons: Lucy, you described this earlier as crony capitalism, explain, please.
Lucy Mason: I was very unhappy because of what we saw as utilities, industries, coming in and Tom made a good point about outside interests coming in as well. When you have -- when you see lobbyists being paid millions of dollars throughout this whole debate, where does that money come from? You have to look at the utilities in some cases. I'm very unhappy with this particular issue because what happened was, like Vernon was saying, it was a tax without the daylight of the legislature, without passing that, it was in the shadows of the bureaucracies, and I was furious about this because it is taxation without representation. It was literally a letter that went to the governor.
Ted Simons: Tom, please.
Tom Forese: On one side, there are folks that say it is a new tax. On the other side, there are folks that say this is taxes that they should have been paid. Lucy and I will attest to this serving in the legislature, the Arizona Legislature is a very interesting body. Is that the understatement of the day? They will be handling this the next session. This will all come out; we will understand the issue completely. It should be handled among the legislature and it will be.
Ted Simons: There’s been talk perhaps even among those at this table that this is an example of APS to slow or even eliminate rooftop solar? That valid?
Doug Little: I don't think so at all. APS has been tremendously supportive of solar in the past based on my experience and what I have seen them do, particularly utility scale solar. Utility scale solar is something that they actually can use to balance their portfolio. Tom and I were fortunate enough to go down to the Solana Plant in Gila Bend and we were introduced to exciting technology down there. With the storage capability that they have down there, they can actually keep that plant operating into the peak usage times by -- they can keep it going six hours after the sun goes down.
Tom Forese: Ted, to that point, back in the late 70s, I got to walk into one of these large mainframe computer rooms. That is the feeling when you’re at the Solana Plant. These batteries are bigger than this room. Great technology. That is the future in Arizona.
Vernon Parker: We saw the same thing –- go ahead Lucy.
Lucy Mason: We were there, and I just have to say, it took my breath away when I stood up there and looked at the three square miles of the photovoltaic mirrors and how they attract the sun. It really is incredible. I want to also add. This is something I worked with APS on when I was energy chairman. Because of the laws that I helped to write and get passed that we actually have that facility out there. That is one of the things --
Vernon Parker: Well, the facility is wonderful. But I think the question was what does APS look like as far as rooftop solar is concerned. And so when you want to impose a tax on, you know, seniors, churches, schools, nonprofits, that does not pass the smell test. That does not go through the legislature. That tells me something completely different. Now, APS is a wonderful company. They have done great things in our state. But I also believe that we have to look out for the seniors. We have rooftop solar. We have to look out for the churches, nonprofits and schools. We can't say because Solana is a wonderful facility --
Ted Simons: With that in mind, we have about 30 seconds. So, I need like ten seconds from each of you. Is that a fair tax that is on the solar panels, on the lease?
Doug Little: First of all, I don't like any new taxes at all. But recognize that businesses pay these kinds of taxes on property that they own and lease.
Ted Simons: Okay.
Doug Little: So, this is not new.
Ted Simons: Is it fair?
Tom Forese: I'm going to say the reason that I have a problem with it and answer to the question is no. The reason I have a problem with it isn't whether or not they should be paying it because other people do, it is the timing of it. They haven't been paying it up until now. If they should be paying it, it should be done in a way where it doesn't surprise the business and make it so that it can't operate.
Vernon Parker: It is very unfair. These folks are leasing. They are not the property owners.
Ted Simons: Lucy…
Lucy Mason: I don't like it at all. And I have never supported it and I won't support it.
Ted Simons: Alright. Each candidate will now give a one minute closing statement and going in reverse order of the opening statements, we start with Doug little.
Doug Little: Thank you, Ted. Ladies and gentlemen, you have had an opportunity to hear all four of us. Tom and I are running together as a slate. And we have a couple of things that are going for us. First of all, we have deep background in technology. We're also both businessmen. We understand the things required to evaluate the rate cases and the technology that we're seeing in the Commission. What I'd like to do is just remind everyone that our primary objective is to deliver clean, reliable energy at the lowest possible price. We want to represent the rate payer in Arizona. And we want to accomplish this keeping our energy prices low through balanced energy portfolio -- thoughtful, balanced.
Ted Simons: And that's it. Thank you very much. For our next closing statement, we go to I believe we go to Tom Forese. Yes, we do.
Tom Forese: Thank you. Appreciate those kind words from Doug and I echo it. I have enjoyed teaming up with him. I have a background like many of you. I come from an immigrant family. My grandfather came to the United States as a teenager, worked in the steel mills in Pennsylvania. Was able to put eight kids through college. Had a small store. And for me, it really is the American dream. And why I love Arizona, and why I think Arizona is so special is there are a lot of places in the country that dream doesn't exist anymore. But here it does. Ten to 15 thousand people move to Arizona every month. Often with one career leaving it, coming out here to a completely different life. I want to take that American dream in Arizona and I want to grow on it. Energy plays a big part in that. More than half of the businesses in Arizona are started in people's homes, including my business. Started in the family room, a lot of computers around the house. My wife wasn't crazy about it. But I tell you, what people pay for energy has an impact on jobs and job growth and that is why I'm asking for your support.
Ted Simons: Thank you very much. Our next closing statement, Lucy Mason.
Lucy Mason: Thank you, Ted, very much. This has been delightful. There is many things that we all agree on. But I have to tell you that I am as a person who has worked in the energy industries with the energy industries, and with the water issues that we have in this state, I have worked tirelessly with both working towards solutions that we have and that we need. I will not ever support the tax increase on solar at this point. I will always look for fair resolution. This is my reputation. This is what I do. My family comes from four generations deep in this state. I have a lot of ancestors that are buried here. We helped settle this state. We can help grow this state. Vernon and I are running together and we're running as a team to solve a lot of these issues.
Ted Simons: Alright, thank you very much. And our final closing statement, we turn to Vernon Parker.
Vernon Parker: Thank you so much. Look, you guys, for the last year, millions and millions of dollars have been spent by special interest to influence regulators, to influence Corporation Commissioners. You can spend a million dollars. You can spend a billion dollars. You can spend a trillion dollars. And I will always be there for you. I will always look you in the eye and say that I am there to protect you, the rate payer. Not special interests whatsoever. I think of my own grandmother who lived on a fixed income and I think that, you know, during those days where she had to pay her bills and then that we need someone there to protect her. You out there, I will protect you. I can guarantee you that. I will be there to protect the rate payers and please, if you like what you heard, this is a Clean Elections debate. I need $5 from you. Go to vernonbparker.com and donate. And I have $5 from you (points to Lucy Mason).
Ted Simons: Okay, thank you candidates and thank you for watching this Vote 2014 Clean Elections debate featuring the candidates for the Arizona Corporation Commission. The next debate takes place Tuesday, July 1st when we hear from Republican candidates running for Secretary of State. That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening.
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