Code of Ethics

PREAMBLE

The Arizona Corporation Commission is dedicated to ensuring the public trust. As members of a public body, the Commissioners should respect and comply with the law and should conduct themselves at all times in a manner that promotes public confidence in the integrity and impartiality of the Commission. This code of ethics is intended to recognize and establish the moral duties and obligations of Commissioners that involve not only obeying the law, but also performing their duties with the highest standards of ethical and professional conduct.

Source: NARUC Code of Ethics, Canon I; Ariz. Code of Judicial Conduct, Canon I, Rule 1.2

I. GENERAL ETHICAL DUTIES

Rule 1.1

Commissioners shall discharge their duties in full compliance with applicable laws concerning ethical conduct.

Source: 1992 Ariz. Sess. Laws, ch. 134 § 1; NARUC Code of Ethics, Canon I; Ariz. Code of Judicial Conduct, Canon I, Rule 1.1

II. PROPER PERFORMANCE OF COMMISSIONER DUTIES

Rule 2.1

The official duties of Commissioners take precedence over all other activities.

Source: NARUC Code of Ethics, Canon III; Ariz. Code of Judicial Conduct, Canon II, Rule 2.1

Rule 2.2

Commissioners should be faithful to and constantly strive to improve their competence in regulatory principles.

Source: NARUC Code of Ethics, Canon III; Ariz. Code of Judicial Conduct, Canon II, Rule 2.5

Rule 2.3

Commissioners should maintain order and decorum in the proceedings before them. Commissioners should be patient, dignified, and courteous to litigants, witnesses, lawyers, and others with whom the Commission deals in an official capacity, and should require similar conduct of lawyers, staff, and others subject to the Commissioners’ direction and control. Commissioners should afford to every person who is legally interested in a proceeding, or his or her lawyer, the full right to be heard according to law.

Source: NARUC Code of Ethics, Canon III; Ariz. Code of Judicial Conduct, Canon II, Rule 2.8

Rule 2.4

Commissioners should not perform an act in a private capacity that may be construed as an official act.

Source: A.A.C. R2-5A-501

Rule 2.5

Commissioners shall not with corrupt, malicious, unscrupulous, unethical, or intimidating intent use their political influence or position to cause the firing, promotion, or demotion of any Commission employee or the hiring or failure to hire any applicant for employment with the Commission.

Source: A.R.S. §§ 1-215, 13-1202, 41-753; Black’s Law Dictionary (10th ed. 2014)

Comment: The following definitions shall apply: Corrupt means a wrongful design to acquire or cause some pecuniary or other advantage to the person guilty of the act, or to some other person. Malicious means a wish to vex, annoy, or injure another person, or an intent to do a wrongful act. Unscrupulous means behaving in a way that is dishonest or unfair in order to gain advantage. Unethical means lacking moral norms or standards of professional conduct. Intimidating means using words or conduct to threaten (1) physical injury to another person, or (2) serious damage to the property of another person, or (3) serious public inconvenience.

III. PROHIBITION ON HARASSMENT

Rule 3.1

The Commission is committed to maintaining human dignity and protecting its employees from unlawful harassment, whether it is of a sexual nature or based on race, color, national origin, religion, age, disability, genetic information, gender, pregnancy, military or veteran status, or any other status protected by law. Commissioners are prohibited from engaging in unlawful harassment in any form, whether verbal, physical or visual.

Source: 42 U.S.C. § 2000e, et seq.; 29 U.S.C. § 621, et seq.; 42 U.S.C. § 12101, et seq.; Ariz. Code of Judicial Conduct, Canon II, Rule 2.3

IV. AVOIDING CONFLICTS OF INTEREST

Rule 4.1

Commissioners or their relatives who have a substantial interest in any contract, sale, purchase, or service to the Commission shall disclose that interest in the public records of the Commission, and shall refrain from voting on or participating in matters in such contract, sale, or purchase. Commissioners shall also disclose any substantial interests in any decision of the Commission, and shall refrain from participating in any manner in such decisions.

Source: A.R.S. § 38-501, et seq.

Comment: A Commissioner should disqualify himself or herself in a proceeding where that Commissioner determines that he or she cannot be impartial, such as when the Commissioner has a personal bias or prejudice concerning a party. Commissioners should also not allow family, social, or other relationships to influence their official conduct or judgment. A substantial interest exists if all of the following are present: (i) the decision could affect, either positively or negatively, an interest of the Commissioner or his/her relative; (ii) the interest is pecuniary or proprietary, such as a financial interest or ownership interest; and (iii) the interest is not “remote” as defined by A.R.S. § 38-502(10).

Rule. 4.2

Commissioners shall not be employed by, hold an official relation to, or own stocks or bonds in, a corporation that is regulated by the Commission.

Source: A.R.S. § 40-101; NARUC Code of Ethics, Canon II

Comment: It is permissible for a Commissioner to be indirectly invested in the stock of a regulated entity, provided such investment is through entities not regulated by the Commission. For example, it is permissible for a Commissioner to be invested in a brokerage account that permits the broker to invest the client’s funds in various entities.

Rule. 4.3

Commissioners shall not receive, or agree to receive, compensation other than as provided by law, for any service rendered or to be rendered by the Commissioner, related to matters pending before the Commission.

Source: A.R.S. § 38-505

Comment: Other than at educational conferences, Commissioners shall not solicit or accept food, refreshments, lodging, or other items at any time from entities that are funded or supported by public service corporations regulated by the Commission or entities that regularly appear at the Commission.

Commissioners should not solicit or accept food, refreshments, or other items paid for by public service corporations, entities or organizations that regularly appear at the Commission or who are involved in pending matters before the Commission, except that Commissioners can attend educational conferences e.g. the National Association of Regulatory Utility Commissioners conferences.

Rule 4.4

Commissioners shall not use their official position to secure any valuable thing or valuable benefit that would not ordinarily be provided to the Commissioner in the performance of the Commissioner’s official duties, if the thing or benefit is of such a character as to manifest a substantial and improper influence on the Commissioner.

Source: A.R.S. § 38-504

Comment: Commissioners should self-regulate their outside activities to minimize the risk of conflict. But, the receipt of a benefit by a Commissioner does not, standing alone, establish a substantial and improper influence. For example, a Commissioner’s attendance and participation in trade industry events related to matters within the Commission’s jurisdiction often serve the public interest.

It is appropriate for Commissioners to attend luncheon meetings, dinner meetings, or industry-related gatherings and conferences sponsored by industrial, technical, and professional associations, when attendance and participation serves the public interest and involves a discussion of matters of mutual interest to the Commission and in furtherance of the Commissioner’s duties. Likewise, it is appropriate for Commissioners to accept travel-related reimbursement for events related to Commission business when (i) attending educational or informational settings; (ii) attending events or meetings in which the Commissioner is scheduled to meaningfully participate; or (iii) the events relate to the Commissioner’s official duties. No benefit or travel-related expense may be accepted if it is offered in exchange for official action.

Rule 4.5

A Commissioner shall not represent another person or entity before the Commission for a period of one year following the date the Commissioner’s tenure as a member of the Commission ends.

Source: A.R.S. § 38-504

V. DISCLOSURE

Rule 5.1

Commissioners must file with the Arizona Secretary of State a verified financial disclosure statement each year. The matters disclosed include sources of personal compensation, the identity of personal creditors and debtors, and ownership interests in investments, businesses, and real property.

Source: A.R.S. §§ 18-444; 38-541; 38-543–38-545

Comment: Commissioners shall make their verified annual financial disclosure statements available to the public on the Commission website.

Rule 5.2

A Commissioner shall not knowingly communicate with any person, representing an industry or public service corporation whose interests will be affected by Commission decisions, and whose intent is to influence any decision, legislation, policy, or rulemaking within the Commission’s jurisdiction, unless that person has registered as a lobbyist with the Commission prior to making or attempting to make such communication. This registration requirement shall not apply to individuals representing themselves, subject matter experts or other persons who answer technical questions or who provide technical information at the request of a Commission lobbyist, or licensed attorneys whose primary purpose in communicating with a Commissioner is to advocate on behalf of a party in the course of Commission proceedings.

Source: A.R.S. § 41-1231, et seq.

Comment: Lobbyist registration is administered by the Commission and is separate from other statutory lobbyist registration requirements. The Commission shall make lobbyist registration information available on its website. The information provided shall be consistent with the lobbyist registration form prescribed by the Arizona Secretary of State, which includes the lobbyist’s current and former list of clients. Commissioners are encouraged to access information regarding licensed attorneys who have made an appearance on behalf of a party in the course of a Commission proceeding through the Commission’s e-docket system.

Rule 5.3

Commissioners shall disclose on a quarterly basis any gifts or things of value received directly from any person or entity affiliated with a public service corporation regulated by the Commission. “Gifts or things of value” under this code shall be limited to those things or services with a cash value of more than $20.

Source: A.A.C. R2-5A-501; Ariz. Code of Judicial Conduct, Canon III, Rule 3.13

Comment: Commissioners should not accept any gifts or things of value from anyone when the purpose is, or appears to be, designed to influence official action. Commissioners should likewise not permit themselves to be placed under any kind of personal obligation that could lead a person to expect official favors. Commissioners shall make these quarterly disclosures available to the public on the Commission website.

VI. CAMPAIGN CONTRIBUTIONS

Rule 6.1

Commissioners receiving campaign contributions shall conduct all necessary due diligence to properly and accurately document those contributions, to fully comply with campaign finance reporting laws.

Source: A.R.S. §§ 16-926; 18-444; 38-541; 38-543–38-545; Citizens United v. Federal Election Commission, 558 U.S. 310 (2010)

Comment: Commissioners who are running for re-election should remain actively involved in financially managing their own campaigns so that contributions can be properly recorded. Commissioners shall make these disclosures available to the public on the Commission website. To avoid any appearance of impropriety or conflict of interest in the Commissioner’s official conduct, Commissioners should be particularly mindful of any campaign contributions received from regulated entities, or campaign contributions received from individuals or entities affiliated with regulated entities.

Commissioners are not expected to know or disclose the funding source of any independent expenditures, unless these funding sources are confirmed by the donors; however, Commissioners must continue to disclose any and all campaign contributions as required by Arizona law. Commissioners should educate themselves on the financial disclosure handbook and be familiar with the law, including any amendments or changes to the law regarding disclosure.

Rule 6.2 (A)

With the exception of Citizens Clean Elections Act candidates, beginning with the 2020 election cycle, if a candidate is elected to the Commission and knowingly accepted individual contributions to his or her Commission candidate committee from a party to a matter before the Commission, the elected candidate shall recuse himself or herself from participating and/or voting on any matter before the Commission involving the party associated with the contribution. Recusal is subject to the doctrine of necessity.

This rule shall apply to a sitting Commissioner who is also running for any local, state, or federal office.

This rule shall also apply to contributors who: (1) represent a party or an organization that represents a party in a matter before the Commission; (2) is associated with a firm or organization in which the contributor is also associated; (3) is an owner, officer, employee, or member of a party or a party affiliate; (4) is an individual or entity retained by a party in connection with a matter before the Commission, even if the retained individual or entity does not formally appear on behalf of a party in a matter before the Commission; (5) is a lobbyist registered with the Commission; (6) is a member of the contributor’s family; (7) is a separate segregated fund established by a corporation, limited liability company, labor organization or partnership that is required to register as a political action committee.

Comment: A successful Commission candidate is subject to recusal under the code for violation of this rule, even if the candidate was not a Commissioner during the period of candidacy. For the purposes of this rule, a candidate for the Commission means any person, including a sitting Commissioner, who is seeking selection for the office of Arizona Corporation Commissioner by election or appointment. A person becomes a candidate for the Commission, or any local, state, or federal office, as soon as he or she makes a public announcement of candidacy, declares or files as a candidate with the Secretary of State, or other filing authority, authorizes or, where permitted, engages in solicitation or acceptance of contributions or support, or is nominated for election or appointment of office.

For the purposes of this rule, a contribution means any money, advance, deposit or other thing of value that is made to a person for the purpose of influencing an election.  A contribution means any money, advance, deposit or other thing of value that is made to a Commissioner, that Commissioner’s family, or that Commissioner’s interest/cause. A party means any applicant, complainant, respondent, intervenor, or protestant to a matter before the Commission as defined in A.A.C. R14-3-103. An affiliate means an organization, person, or group that is connected with, or controlled by, a larger group. A member of the contributor’s family means a spouse, domestic partner, child, grandchild, parent, grandparent, or other relative or person with whom the contributor maintains a close familial relationship. Member of household shall be as defined in the Judicial Code of Conduct. Known shall mean known to the Commissioner without that Commissioner having to do special research into publicly available documents, e.g., a utility reveals in the press that it has provided funds to an independent expenditure group that has contributed funds to a Commissioner’s campaign.  Known would not mean that same utility provided funds to that same independent expenditure group, but that was not revealed publicly other than in some required filing with some government agency.

If a contributor is a party to a matter before the Commission at the time of contribution or after, their party status continues through the duration of the Commissioner’s term and applies to any future matters that involve the party. The election cycle means the two-year period beginning on January 1 in the year after a statewide general election and ending on December 31 in the year of a statewide general election. A contributor shall not give, and a political action committee or a political party shall not accept, a contribution that has been earmarked for a candidate for the Commission.

(B)

Prior to voting on a matter before the Commission, a Commissioner shall declare any known campaign contributions or contributions of any kind which indirectly benefit that Commissioner (e.g. independent expenditure), or directly or indirectly benefit that Commissioner’s immediate family (mother, father, sister, brother, spouse, children, and members of household), and/or that Commissioner’s personal interest/cause (e.g., favorite charity), where the contribution is from:

  1. A business entity, that is a party in the matter (or a related entity) before the Commission, where the owners, and/or officers, and/or employees who are in executive positions, have indirectly (e.g., through independent expenditure, or other third-party independent expenditure, etc.) contributed, in aggregate, one thousand dollars ($1,000) or more.
  2. An individual that is a party in the matter before the Commission where the individual and/or members of that individual’s immediate family have contributed indirectly (e.g., through independent expenditure, or other third-party independent expenditure), in aggregate, one hundred dollars ($100) or more.

The declaration shall be made in writing as soon as possible after the Commissioner knows that a matter that meets the above criteria (if a charity or cause, the name of that charity or cause need not be revealed) will be on an Open Meeting agenda, but no less than two business days before a vote on the matter.  The declaration shall identify the donor, state the dollar amount of the contribution and whom it benefited.  The declaration shall state whether or not the contribution was returned to the donor.  The declaration shall also contain the following language:

“Any party to this who believes that I should recuse myself may file the reasons for recusal in this docket.  I may or may not recuse myself from this matter.”

The same declaration shall also be made orally by the Commissioner immediately following the Commission Chairman announcing the matter for discussion at the Open Meeting.  Any party to the case shall be given the opportunity to state, at the Open Meeting, why the Commissioner should not be voting on the matter.

The contributions contemplated above shall include all contributions received:

  1. Within eighteen (18) months of a Commissioner’s election/appointment to the Commission, even if the contribution is returned to the donor.
  2. While a Commissioner is in office, even if the contribution is returned to the donor.

Source: A.R.S. §§ 16-901, 16-905, 16-911, 16-913, 16-916, 16-918, 16-922, 16-926; A.A.C. R14-3-103; Ariz. Code of Judicial Conduct, Canon IV; Citizens United v. Federal Election Commission, 558 U.S. 310 (2010)

VII. PUBLIC ACCESS TO INFORMATION

Rule 7.1

Meetings involving a quorum of Commissioners, where legal action is discussed, deliberated, proposed, or taken, shall be conducted in public and in accordance with Arizona Open Meeting Law. The Arizona Open Meeting Law requires public notice of meetings, prohibits certain discussions between public officers outside of those meetings, and limits discussion at public meetings regarding official action to items related to the agenda.

Source: A.R.S. § 38-431, et seq.

Comment: Calls to the public are governed by different rules and allow the public to address the Commission on any topics of concern within the Commission’s jurisdiction, even if the topic is not specifically on the agenda. During open calls to the public, a Commissioner may not dialogue with the presenter if the topic is not on the agenda, however, the Commissioner may (i) respond to criticism; (ii) ask staff to review an item; or (iii) ask that an item be placed on a future agenda. In addition, a Commissioner who proposes that the Commission have the opportunity to consider an off-agenda subject at a future public meeting, without more, does not violate the Arizona Open Meeting Law because it does not propose legal action.

Rule 7.2

The Commission shall designate from among existing employees a Public Records Officer. The Public Records Officer shall be responsible for complying with public records requests as required by Arizona law.

Source: A.R.S. §§ 39-121–39-161

Comment: Electronic messages sent or received by government-issued electronic devices that have a substantial nexus to Commission activities are public records and subject to public inspection. Commissioners likewise have a duty to reasonably account for official activity, even when that activity is conducted on private devices or through private e-mail accounts. Commissioners cannot use private devices and accounts for the purpose of concealing official conduct.

To ensure transparency and promote accountability to the public, Commissioners shall make their official calendars available to the public on the Commission website on at least a quarterly basis. Commissioners shall, at a minimum, disclose in accordance with the following schedule: Q1 (January, February, and March) will be available on the Commission website beginning May 1; Q2 (April, May, and June) will be available on the Commission website beginning August 1; Q3 (July, August, and September) will be available on the Commission website beginning November 1; and, Q4 (October, November, and December) will be available on the Commission website beginning February 1.

Rule 7.3

Ex parte rules prohibit communications to or from a Commissioner, not on the public record, concerning the substantive merits of a contested proceeding. The ex parte rules commence when a matter is set for a public hearing and terminate once an application for rehearing has been denied. Commissioners shall not initiate or knowingly participate in ex parte communications with any public service corporations and their lobbyists, or any party to a pending case. Any violation of this rule requires immediate recusal and participation from the matter by the Commissioner(s) that violated this rule.

Source: A.A.C. R14-3-113

Comment: The ex parte rule similarly applies to communications to or from agents of the Commissioner involved in the decision-making process, such as the Commissioner’s policy advisors and interns. The ex parte rule does not prohibit discussions about procedural matters or comments from the public. For example, Commissioners can communicate or inquire about scheduling issues, docket filing issues, or other case administration issues, without violating the ex parte rule.

VIII. ETHICS OFFICER

Rule 8.1

The Commission’s Ethics Officer shall be the Commission’s Chief Counsel (Director of the Commission’s Legal Division). If the Commission determines (by a majority vote) or the Chief Counsel determines that the Chief Counsel is unable to perform the duties of Ethics Officer on a particular matter, the Commission’s Assistant Chief Counsel shall be the Commission’s Ethics Officer for that matter. The Ethics Officer shall provide an annual training to Commissioners to ensure familiarity with the Commission’s Code of Ethics, applicable Arizona laws related to the conduct of public officials, public record laws, and open meeting laws. The Ethics Officer shall likewise be available to provide advice to the Commissioners on ethics issues as needed.

Comment: Any complaint alleging a violation of any provision of these rules should be submitted in writing and under oath to the Ethics Officer, who shall report such complaint to the Commissioners and the Executive Director. Commissioners are likewise expected to disclose any job-related illegal or unethical behavior on the part of any individual, including the Commissioner him/herself.

IX. ENFORCEMENT

Rule 9.1

The Attorney General shall bring an action against any Commissioner who usurps, intrudes into or unlawfully holds or exercises that Commissioner’s public office, when the Attorney General has reason to believe that that the Commissioner’s public office is being usurped, intruded into or unlawfully held or exercised.

The Attorney General may also empanel a state grand jury to investigate and return indictments for knowing or corrupt misconduct involving Commissioners. Commissioners may be impeached for high crimes, misdemeanors or malfeasance in office, and/or recalled by the voters. Commissioners are also subject to the federal and state criminal laws.

Source: Ariz. Const. Art. VIII; A.R.S. §§ 12-2041 et seq.; 38-311–38-312; 38-441 et seq.;

21-422(B)(1)

Comment: Violations of Arizona law by any Commissioner should be referred for review to the Attorney General or the county attorney for the county where the events allegedly took place.

X. ADOPTION OF CODE

Rule 10.1

With the exception of Section V, Rule 5.2, this Code of Ethics shall take effect immediately upon approval of the Commission and shall be re-adopted at the swearing in of each new Commissioner. Section V, Rule 5.2 shall take effect ninety (90) days from the effective date of this Code of Ethics to allow parties time to register with the Commission. The Commissioners shall review this Code of Ethics periodically to determine if any amendment is required.

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