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State Lawmakers Look to Keep Utilities Out of Politics

March 18, 2024 (4 min read)

Utility companies are so unpopular in America these days that some headline writers don’t even bother trying to be objective about them anymore.

The simple reason most power utilities suck” was the headline of a 2017 Vox story. “Why Your Utility Company Sucks” read the headline of a 2022 article in The New Republic.

It might be kind of funny if not for the serious reasons why Americans are growing exasperated with their utilities, namely rising rates and a string of political scandals across the country.

In May CNN reported that nearly 20 million American households are behind on their utility bills. That same month the U.S. Energy Information Administration reported that Americans’ residential electricity bills rose 5% in 2022, after adjusting for inflation. 

If that’s not bad enough, utility executives keep getting themselves into trouble for trying to put their fingers on the political scale to aid their interests.

In 2014, for example, Arizona Public Service funneled $10 million to so-called dark money political groups to help elect its preferred candidates to the Arizona Corporation Commission, which regulates utilities.

In 2018, the New Orleans City Council fined Entergy $5 million after it learned the company hired actors to publicly support a proposed gas plant.

Florida Power & Light has been accused of supporting “ghost candidates” to draw support away from state legislative candidates it feared could stifle its push for rate hikes.

In Illinois last year a federal jury found that four former executives and associates of Commonwealth Edison conspired to “influence and reward” former Illinois House Speaker Michael Madigan so he would help them pass legislation benefitting the utility.

Just last month felony charges were filed against two former FirstEnergy executives and a former top utility regulator in what may be “the biggest bribery and money-laundering scandal in Ohio history.” Former Ohio House Speaker Larry Householder was sentenced to 240 months in prison for receiving nearly $61 million in bribes to bail out a FirstEnergy nuclear power plant.

Is it any wonder that state legislators are now looking to curb utilities’ involvement in politics?

Numerous Bills Aimed at Limiting Utilities’ Political Efforts

The legislatures in Colorado, Connecticut, Maine and New Hampshire have already passed legislation that basically prevents utilities from passing on the cost of their political influence efforts to their customers.

Similar proposals have been introduced in 11 more states.

California SB 938 would bar utilities from recovering political influence costs from ratepayers, as would Utah SB 249, Ohio SB 149 and Virginia HB 792.

Minnesota HB 4292 and Pennsylvania HB 2047 would broadly prevent utilities from passing on to their customers the cost of political activities, including even dues paid to trade associations. Companion measures in Maryland (HB 505 and SB 682) would do the same.

In Illinois, where utilities already can’t pass along the cost of lobbying and advertising to ratepayers, SB 2885 would also bar them from recovering the cost of trade association dues and charitable donations from customers.

Arizona SB 1514 would ban utilities from contributing to any political action committee or nonprofit that tries to influence the election of candidates to the Arizona Corporation Commission.

In Michigan HB 5520 and HB 5521 would prevent utilities from making contributions to PACs or nonprofits that engage in campaigns or lobbying, respectively.

Companion measures in New York (AB 7880 and SB 7637) would prevent utilities from passing on to consumers the cost of any lobbying or educational expenses.

Meanwhile, in Louisiana the Public Service Commission has opened a rulemaking docket to investigate utilities using ratepayer money for political influence, advertising or trade association dues.

States Targeting Utilities’ Political Activity

At least 11 states have introduced legislation this year that would prohibit utilities from passing along the costs of their political activities to their customers. Measures in two of those states have already failed. 

“(I)f utilities are going to be at the center of our transition from fossil fuels to clean electricity, customers need to be able to trust that they are not corrupt,” wrote the Energy and Policy Institute in a report last year entitled, “Getting Politics Out of Utility Bills.”

The report provides a “basic recipe for policymakers to protect customers from being forced to fund utilities’ political spending”:

  1. Tighten up rules to keep utilities from using ratepayer dollars for political activities.
  1. Require regular disclosures from utilities about their political spending.
  1. Establish clear enforcement mechanisms, including fines sufficient to deter violations.

The report says those three actions “work best as a three-legged stool,” with one or even two of them together not being enough. The watchdog group provides a tracker of legislation targeting utilities’ political action that indicates several of the pending bills would accomplish all three of those aims. Notably, none of the measures that have already been enacted appear to do so.

—By SNCJ Correspondent BRIAN JOSEPH

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