Ducey's pick for Arizona Corporation Commission has his own conflict of interest

• Andy Tobin will not vote on matters involving SolarCity Corp. at the Corporation Commission
• Tobin's son-in-law works for SolarCity in rural Arizona, and the solar company is involved in many utility rate cases
• Tobin said he will focus on water issues and bringing attention to rural matters while on the commission

The man Gov. Doug Ducey appointed to replace a utility regulator whose removal was sought because of a potential conflict of interest will not vote on major electric-utility cases because he faces his own personal conflict.

Ducey in December appointed former lawmaker Andy Tobin to the five-member Arizona Corporation Commission, which regulates electric and water utilities, railroad crossings and other matters in Arizona.

The vacancy Tobin is filling on the commission was created when Chairwoman Susan Bitter Smith resigned as the Arizona Attorney General's Office was seeking her removal over what officials believed was a conflict of interest.

Tobin said Tuesday before his 10 a.m. swearing-in ceremony that he will avoid voting on matters that involve rooftop-solar-panel-installation company SolarCity Corp. because his son-in-law works for the company in rural Arizona as an inventory-control specialist.

"I just won't be voting when the (commission) lawyer says, 'You have a conflict,'" Tobin said. "There could be a lot of recusals."

About SolarCity

SolarCity is involved in most of the decisions the Corporation Commission makes involving electric utilities because the utilities have a state requirement to get a portion of their electricity from renewable power sources. SolarCity has a major interest in how that is accomplished. The company offers leases for solar panels and is the largest provider of residential rooftop solar in the state and nation.

SolarCity also recently disclosed it has given money to a non-profit group that supports the Checks and Balances Project, a watchdog organization that has been fighting with the Corporation Commission for almost a year over public records.

The decisions utility regulators make can have a substantial impact on SolarCity. For example, the company mostly pulled out of Salt River Project territory and relocated workers last year after that utility's decision to charge special fees to new solar customers. The company also said in January it is laying off about 550 workers in Nevada after a solar decision by that state's utility regulators.

Senators want update on SolarCity investigation

The law, recusal and possible deadlock

With Tobin recusing himself, it is possible the commission could deadlock on issues with votes of 2-2. A major decision involving rooftop-solar fees charged by Arizona Public Service Co. in 2013 in fact came down to a 3-2 vote at the Corporation Commission. Votes that end in a deadlock simply do not pass.

Daniel Scarpinato, a spokesman for Gov. Doug Ducey, said the governor "still believes he’s the best person to do the job.”

Scarpinato said Ducey chose Tobin “because he’s a person of great integrity and because he’s a voice for rural Arizona and there are priorities that come before this board on a number of issues. The fact that Andy has disclosed this and will be looking on a case-by-case basis … is reflective of exactly the reason the governor appointed him."

Tobin's conflict was not caught by the governor's office when he was interviewed for the Corporation Commission appointment.

However, Scarpinato emphasized the governor is pleased with his choice. Had Ducey known of the conflict before the appointment, “I don’t think that would’ve changed anything,” Scarpinato said.

"We looked at his (voting) history on issues before the commission and anything that could be an issue or compromise him and we found nothing,” Scarpinato said. “We found he took a very fair approach to these issues in the Legislature and believe that he will take that approach in this new position.”

It was the fourth time Ducey turned to the Paulden Republican since January 2015, when he named Tobin director of the Arizona Department of Weights and Measures. In October, Ducey announced Tobin as director of the Arizona Department of Insurance, and in December made him interim director of the Arizona Department of Financial Institutions.

Tobin said that in late January, the Corporation Commission screened him and those he wishes to hire as his staff at the commission. When asked whether he had any family members who had jobs that might conflict with his duties, he mentioned the son-in-law, who took the job with SolarCity in November.

That set off alarms and the governor's office was notified, and Tobin decided he would recuse himself from all matters involving SolarCity.

"The law appears clear to me," Tobin said.

Arizona has a law specifically prohibiting Corporation Commissioners from serving if they have an interest in any regulated company and a broader law for public officials aimed at avoiding conflicts of interest.

"In my view, while it seems a long stretch, I think it applies," Tobin said of his son-in-law's position.

He said he might ask state lawmakers to review the statute and provide a clearer definition of what constitutes a conflict, but does not want to challenge that definition by voting on matters and possibly having those votes challenged.

Tobin's experience also includes owning a Farmers Insurance agency and an employee-benefits company. He was CEO of a 200-employee aerospace company until 2003. He served as a state lawmaker from 2006 to 2015, eventually serving as House speaker.

Although he won't participate in matters involving SolarCity, Tobin said he looks forward to giving rural Arizonans a voice on the commission and increasing the engagement of state residents outside of metro Phoenix. He also said that the numerous small-water-company issues decided by the commission offer an opportunity for him to contribute to the decision-making.

Tobin will serve the remainder of Bitter Smith's term, which runs through this year. He has not decided whether to run for a full term in the office.

"Ethics officer"

After Bitter Smith's resignation and other high-profile accusations of conflicts at the Corporation Commission, Director Jodi Jerich in December announced the hiring of Christopher Kempley to serve as an "ethics officer."

Kempley's newly created position was designed to help the agency deal with conflicts of interest and other matters, such as complying with public records laws.

Kempley served as an attorney adviser for the Federal Energy Regulatory Commission. He was chief counsel for the commission from 2002 to 2008 and assistant chief counsel from 1985 to 2002.

"Once Mr. Tobin is sworn in, I will be discussing a variety of legal matters with him," Kempley said Tuesday.

He said any advice he gave Tobin would be privileged and not discussed publicly.

Fellow commissioners welcomed Tobin to the job during Tuesday's ceremony.

"I certainly am thrilled you are with us today," Commissioner Bob Stump said. "You are going to be in for a hell of a ride."

At a glance

Arizona law states that: 

• "Any public officer or employee who has, or whose relative has, a substantial interest in any decision of a public agency shall make known such interest in the official records of such public agency and shall refrain from participating in any manner as an officer or employee in such decision."
• A separate provision defines "remote interests" that can be considered conflicts.