Electricity customers pay for groups that lobby against clean energy, report says
Successful oversight of trade group membership dues has faded away in many states, report says.
Few political organizations have the “luxury of subsidization” enjoyed by the Edison Electric Institute (EEI) and other trade groups that represent the utility industry, according to a new report.
Utility customers foot the costs of “political and public relations” activities of these industry trade groups, the report’s authors contend. Requiring customers to pay a portion of the annual membership dues means customers might be paying for political activities with which they may not agree and from which they may not benefit, the report says.
Electric utility companies routinely receive permission from state regulators to include at least a portion of their dues payments to industry associations in their operating expenses, the Energy & Policy Institute, a research and watchdog group, said in the new report. Those operating expenses are passed on to customers, not to the shareholders of these investor-owned utilities.
“Given how these organizations promote fracking and natural gas infrastructure, propose bailouts for nuclear power plants, and spread misinformation regarding the science of climate change, they are also all political in nature,” the authors wrote in the report.
The report, “Paying for Utility Politics: How Utility Ratepayers Are Forced to Fund the Edison Electric Institute and Other Political Organizations,” focuses on the Edison Electric Institute (EEI), the trade association for the nation’s investor-owned electric utilities, as an example of political influence from a utility association. The report’s authors argued that the membership dues might not be funding activities that EEI defines as lobbying, under the Internal Revenue Code, but they still fund certain types of political activities.
For many years, the National Association of Regulatory Utility Commissioners (NARUC), an association of state regulators, worked with industry trade groups like EEI and the American Gas Association (AGA), which represents gas utility companies, to break out the membership dues and decide which costs could be recovered from ratepayers.
But that system ended more than a decade ago. Today, on its membership invoices to members, EEI highlights what percentage of costs are used for lobbying, based on the Internal Revenue Code. The utility company then uses that percentage to determine what to charge to shareholders. The remaining portion is charged to customers.
When asking regulators for rate increases, electric utility companies provide “evidence to support each recoverable expense, including a portion of trade association dues,” EEI spokesman Brian Reil said in a statement emailed to ThinkProgress.
“The lobbying portion of EEI’s dues, which is not recoverable, is calculated and reported each year using the Internal Revenue Code’s … definition of ‘lobbying and political activities’ as required to be reported on IRS Form 990,” Reil said. “EEI activities in certain regulatory proceedings and communications efforts, for example, are not lobbying as defined by federal law.”
The D.C. metropolitan region is filled with associations that represent almost every business or industry. These groups create educational materials, provide training to their members, and engage in public advertising campaigns, while their lobbyists seek to change policy at federal, state, and local levels. The groups can also conduct fundraising on behalf of political candidates through associated political action committees (PACs).