What would you do if you found out a portion of your electric bill funds lobbying and political activities that work against your interests? This isn’t a hypothetical situation; it’s unfolding right here in Florida. Investigations revealed the extent to which utility giants like Florida Power & Light are investing in influencing Florida’s political scene. This all unfolded simultaneously with the highest electric rate hike in Florida’s history. Let’s delve deeper into this issue and understand why some Florida politicians like Florida’s Congresswoman Kathy Castor (D-Tampa) advocate tightening industry oversight.
The Problem: Your Bill Is Paying to Rig Elections and Lobby Against You.
Currently, utilities are not allowed to charge ratepayers for lobbying activities. The utilities skirt these regulations by funneling tens of millions of dollars to industry associations, which lobby for the utility. The industry associations bill the utility for “association dues.” Then the utility in turn recuperates those “association dues” from ratepayers. These same trade associations also in turn give political donations to utility-friendly politicians who support higher electricity costs. It’s a system where customers inadvertently finance political maneuvers that work against their interests.
Who Benefits When Lobbying Costs Are Pushed onto Ratepayers?
Each state utility commission determines whether ratepayers or shareholders should pay for industry association dues differently, and each utility follows different procedures for reporting. Recent scandals and criminal prosecutions involving electric utility companies in states such as Florida, Ohio, and Illinois have brought to light this concerning relationship between industry associations and utilities. Evidence has emerged of industry associations being involved in illegal schemes that benefit utilities including bribery, candidate recruitment, and attempts to mislead voters in multiple states. When utilities can pass on the costs of lobbying and other political activities to ratepayers, then the investors and chief officers benefit financially.
Examples of Industry Association Lobbying
- Edison Electric Institute (EEI): This lobbying organization represents investor-owned utilities. Investigations have revealed that EEI invoices only attributed 7% of the association dues to lobbying. The other 93% was counted as a regular operating expense, which utilities can recuperate from ratepayers. One report from 2016 revealed that FPL’s customers paid more than $9.5 million to EEI from 2015 to 2018.
- U.S. Chamber of Commerce: The largest lobbying organization in the country engages in electioneering, litigation, and lobbying. One utility paid $1.02 million in dues to the Chamber in 2020, but only claimed that 20% was related to lobbying activities. The other 80% counted as a regular operating expense, which utilities can recuperate from ratepayers. FPL has donated $10.5 million to political committees controlled by the Florida Chamber of Commerce since 2010. It is the top single donor to the chamber’s active political committees.
- Dark Money Groups: There are 44 regulated investor-owned utilities across the US. Twenty-three of them self-disclosed giving nearly $100m to so-called dark money 501(c)(4) and 501(c)(6) groups between 2014 and 2020.
These examples reveal a pattern where the lines between operating expenses (what it costs to run the company) and non-operating expenses (like lobbying) are blurred. Some states and lawmakers argue that this lack of transparency is unfair to ratepayers, leading to efforts to change the rules and make sure customers know exactly where their money is going.
What’s Being Done Nationally: US Senators Write to the Federal Energy Regulatory Commission
At the federal level, a group of U.S. Senators have written a letter to the Federal Energy Regulatory Commission (FERC) urging changes to federal regulations in order to stop utility companies from charging ratepayers for their political activities.
“For too long, utilities have financed the political activities of trade associations using funds from captive ratepayers. These trade associations then lobby for policies that frequently run counter to ratepayers’ interests.”— Letter from US Senators Sheldon Whitehouse, Jeff Merkley, Edward J. Markey, Dianne Feinstein, Elizabeth Warren and Bernie Sanders
Florida’s Congresswoman Kathy Castor’s “Ethics in Energy Act”
On August 2, 2023, she introduced legislation known as the “Ethics in Energy Act,” aimed at prohibiting electric utilities from using ratepayer dollars to fund political activities. In a press release announcing the legislation, she wrote
“Electric utilities should be prohibited from using ratepayer money to bankroll their political slush funds. FPL used shady tactics and dark money to hijack elections, mislead voters and steal elections, and it is time for it to end. In fact, the numerous public corruption scandals involving electric utilities across the country require federal action immediately. Utility companies should be operating in the best interest of ratepayers, not raising electric bills to bankroll deceitful political activities and block clean energy.“— Congresswoman Kathy Castor
What Other States Are Doing
The following five states have made new rules that stop electric companies from using your money to pay for politics.
- Colorado: Passed a new law prohibiting investor-owned utility companies from using ratepayer money to fund industry associations, promotional advertising, certain kinds of lobbying, and other political influence activities.
- Connecticut: Passed a new law requiring utilities to file annual disclosures with itemized lists of expenses, enhancing transparency.
- Maine: Passed a new law requiring an annual itemized report for political expenditures.
- New York: Passed a law prohibiting utilities from charging ratepayers for the membership costs associated with industry associations that engage in lobbying
- Minnesota: Barred utilities from charging customers for advertising designed to influence public opinion or improve a utility’s image
How can you help?
It’s fair to know where your money is going. Most of us can agree that our electric rates should not pay for political donations or lobbying. We need more elected leaders to lead this charge at both the federal and the state level. Florida lawmakers can stand against the utilities and industry associations and lower our electric rates. Use this tool to communicate with your lawmakers at both the state and federal level that these practices are keeping our electric rates high, and should no longer be legal.