Several US senators have thrown their support behind a call for the Federal Energy Regulatory Commission to shore up accounting rules to prevent ratepayers from footing the bill for utilities’ political influencing activities.
”The COVID-19 pandemic has left many of our constituents struggling to pay their utility bills. We believe most of them would be as shocked as we were to learn that part of their utility payments may be used to fund industry trade association fees,” the senators said in a letter to FERC Chairman Richard Glick, dated June 24 but made public July 6.”We strongly believe that ratepayers should not be saddled with paying fees to support industry groups that may not align with their values,” they continued in the letter. “However, the Uniform System of Accounts, the accounting practice overseen by [FERC], and used by many utility providers to determine which costs are recoverable from ratepayers, allows for this practice.”
The matter is currently pending before the commission, as the Center for Biological Diversity in March asked FERC to change its accounting rules to require that all industry association dues be recorded in a way that makes those dues presumptively non-recoverable in rates instead of recoverable, thereby placing the burden on utilities to show why those dues should be passed on to ratepayers.
FERC already bars utilities from forcing ratepayers to fund their political activities. Utilities are therefore required to account for the cost of their trade groups’ lobbying activities in a way that does not become recoverable in rates.
But FERC has acknowledged the lack of a “clearly delineated” line between the kinds of influence-related expenditures that may and may not be recoverable in rates, CBD said in its petition for rulemaking (RM21-15). Given that utilities pay millions of dollars in dues to industry associations like the Edison Electric Institute that are routinely charged to ratepayers, the center wants FERC to reexamine the issue.
Industry oppositionA number of major power and gas industry groups and their utility memberships strongly opposed the petition in comments filed with FERC, arguing that the status quo already ensured that lobbying-related industry dues were not recovered in rates and pointing to what they believed to be a litany of misconceptions in CBD’s filing.
EEI, for its part, asserted that CBD sought to have trade groups’ activities with which it disagreed classified as lobbying. The investor-owned utility group added that CBD made “several misleading and incorrect statements” about EEI and its members’ positions on clean energy and climate policies to cast the utility group’s activities as political in nature.
But the senators who signed the letter found reason to support amending the Uniform System of Accounts’ treatment of industry association dues and urged FERC to initiate a rulemaking to do so.
”If public sector employees cannot be required to pay any portion of union dues as a result of the fact that unions are engaged in political activities they may not support, then ratepayers should not be required to pay any portion of their utility’s trade association dues, as they may not support the political activities of such trade associations,” the senators said.
Lobbying, dark money groupsThe senators pointed to a Florida Light and Power rate request that they said revealed plans to charge customers $9 million between 2015 and 2018 to pay for the utility’s EEI dues, while EEI supported groups like the now-disbanded Utility Air Regulatory Group, which took an oppositional stance on more than 200 clean air and public health matters.
”To prevent ratepayers from unknowingly funding lobbying and other political activities by trade associations and the dark money groups they fund, FERC should amend the USofA to classify industry association dues as presumptively non-recoverable, as is already the case for a utility’s civic and political activities, which are financed by the utility and not recovered from ratepayers,” the senators said.
The letter was signed by Democratic Senators Sheldon Whitehouse of Rhode Island, Edward Markey of Massachusetts, Jeffrey Merkley of Oregon and Jack Reed of Rhode Island, as well as Independent Senator Bernie Sanders of Vermont.
Support for the petition has also come from the Solar Energy Industries Association and public interest organizations including Earthjustice, Sierra Club, Clean Air Council, Friends of the Earth, POWER Interfaith and Southern Environmental Law Center.
While EEI may have a track record of providing value to ratepayers, “a number of associations do not share EEI’s reputation or mission,” and many of those trade groups funded by utilities “do not consider frontline communities and some … actively advocate against these communities,” SEIA said. As such, SEIA urged FERC to examine its accounting rules and make clear that influence-related spending should not be recoverable from ratepayers.
