Citizens' attorneys disqualified again

Two lawyers from Brown and Bain were disqualified Wednesday by Judge Dwight Nodes from representing Citizens' Arizona Electric in a pending rate hike case.

Citizens has petitioned the Arizona Corporation Commission allow it to raise its consumer electricity rates.

Nodes ruled that lawyers Joseph Mais and Brian Lake could not continue to represent Citizens because they are likely to be called as witnesses.

One of the issues in the rate case is the dispute between Citizens and Arizona Public Service over charges for electricity APS delivered to Citizens under a single source contract in force when a price spike hit during the 2000 California power shortage.

Nodes ruled that other lawyers in the Brown and Bain law firm could represent Citizens in the current rate application under the purchased power and fuel adjustment clause (PPFAC).

The PPFAC allows a utility that purchases power from a generating company to pass price increases on to customers.

One of the issues in the case is the contract between Citizens and APS to supply electricity to Citizens.

Mais gave legal advice to Citizens concerning civil litigation to recover the extra charges from APS.

Citizens decided not to pursue that litigation and that decision is expected to be a major issue in the PPFAC case before the ACC.

Parties have until July 23 to file objections to the procedural order that disqualifies Mais and Lake.

If the ACC takes no action regarding any such objections by July 30, the objections will be deemed denied.

Following that time, the ACC will schedule next steps in the Citizens case.

Nodes ruled in March that the first Citizens lawyer, Michael Gallagher, could not represent them because he served on the board of Pinnacle West, the parent company of APS, beginning in 1997.

Gallagher and Kennedy law firm had represented Citizens in the PPFAC case before the ACC since the first filing was made in September 2001.

The challenge came in March just 13 days prior to the case going before the ACC judge for evidence hearing.

Tom Ferry, Kingman-based electric division manger for Citizens, has expressed disappointment with the continued delays.

Citizens serves 59,000 customers in Mohave County and 14,000 in Santa Cruz County and Nogales.

The rate increase would add an estimated 30 percent to ratepayers' bills for seven years.

That would allow Citizens to recover higher costs for electricity (an estimated $100 million) from the 2000 higher costs and under a new contract with APS negotiated later.