Meet the group lobbying against climate regulations — using your utility bill
The federal government is considering a rule change that would make it harder for utility companies to recover trade association dues.
A typical electricity bill leaves the customer with the sense that she knows exactly what she’s paying for. It might show how many kilowatts of power her household has used, the costs of generating that electricity and delivering it, and the amount that goes to taxes. But these bills can hide as much as they reveal: They don’t indicate how much of the customer’s money is being used to build new power plants, for example, or to pay the CEO’s salary. They also don’t show how much of the bill goes toward political activity — things like lobbying expenses, or litigation against pollution controls.
Most U.S. utility bills also fail to specify that they’re collecting dues payments for trade associations. These organizations try to shape laws in electric and gas companies’ favor, in addition to more quotidian functions like coordinating regulatory compliance. On any given billing statement, these charges may only add up to pennies. By collecting them from tens of millions of households, however, trade associations have built up enormous budgets that translate to powerful political operations.
The Edison Electric Institute, an association that counts all of the country’s investor-owned electric utilities as its members, is the power industry’s main representative before Congress. With an annual budget of over $90 million, Edison is perhaps the largest beneficiary of the dues-collection baked into utility bills. In recent years, it’s attracted attention for its national campaign against rooftop solar panels, and for its role in the legal fight against the Obama administration’s Clean Power Plan.
Within the next year or two, however, this financial model could come to an end. The Federal Energy Regulatory Commission, or FERC, the top government agency overseeing the utility industry, is considering a rule change that would make it harder for companies to recover these costs. While utilities are already nominally barred from passing lobbying costs along to their customers, consumer advocates and environmental groups argue that much trade association activity that isn’t technically “lobbying” under the IRS’s definition is still political in nature — and that households are being unfairly charged for it.
Emily Fisher, Edison’s general counsel, said the organization works with its members to make sure customers aren’t held responsible for the portion of the budget that goes toward lobbying. Advocates counter that this is essentially an honor system, because often regulators don’t have time to look closely at how Edison’s revenue is being spent. Instead, the advocates want these costs to be non-recoverable by default. They say the burden should be on utilities to prove that dues passed on to ratepayers are not going toward prohibited political activity.
Half a dozen liberal senators, including Bernie Sanders, Elizabeth Warren, and Sheldon Whitehouse, are pushing for the change, along with numerous state governments and several hundred advocacy groups.
The argument that has dominated this discussion so far has been about consumers’ rights. Ratepayers have been “captive” to the industry, the senators wrote in a joint letter to FERC, and the trade associations use their money to “lobby for policies that frequently run counter to ratepayers’ interests.” These policies might include the right to build unnecessary power plants (the costs of which get passed on to ratepayers) and to impose extra charges on customers who use solar panels…
