Customer bills could fund utilities’ generous discounts • Louisiana Illuminator

“Our analysis, which focused on many of the nation’s largest utilities, found that it was quite common for utilities to charge customers such inappropriate expenses,” said Karlee Weinmann, research and communications manager at EPI and one of the reporting authors . “It was common for them to succeed.”

In some cases, gas utilities have even tried to charge their customers fees for lobbying against electrification, which would reduce greenhouse gas emissions from buses, homes and ports, the report said. Since 2019, four states – Colorado, Connecticut, Maine and New Hampshire – have passed laws banning utilities from passing on political spending to customers. Eleven other states have considered such legislation.

“The strict federal lobbying regulations and disclosure laws that investor-owned electric companies adhere to help ensure that lobbying costs are borne by shareholders, not customers,” responded Brian Reil, managing director of external affairs Communications at the Edison Electric Institute, an energy supplier association. “In addition, investor-owned electric companies are among the most heavily regulated companies in the country, and their investment plans and expenditures are carefully scrutinized through open and transparent rate review processes.”

The customers pay the bill for the company’s enjoyment

How do customers’ electricity bills ultimately finance the energy suppliers’ corporate benefits? It depends on who is keeping an eye on the utilities.

In return for protection from competition, electricity and gas companies are supposed to have their spending regularly audited by federal and state regulators. And when they ask regulators to allow them to raise gas or electricity tariffs, consumer advocates and nonprofit organizations can often participate in the process, giving them the opportunity to verify the company’s calculations.

But in some states, utilities’ campaign contributions help elect regulators. Other states like Georgia lack independent consumer advocates. And utilities everywhere can bury their questionable spending in reams of data.

“I think our public regulators are simply superior to utilities,” said John Farrell, co-director of the Institute for Local Self-Reliance and an expert on utility influence. “Most utilities are so big that the repeal of a New Deal-era law in 2005 allowed them to merge and form these giant multistate corporations.”

What luxury perks were hidden in the regulatory data according to the report? In 2018, Southwest Gas in Nevada attempted to bill customers for weekly and bi-weekly massages from a local massage school.

Massachusetts utility National Grid charged customers thousands for business class travel to France and London. DTE Energy of Michigan, Duke Energy Indiana and Georgia Power have all tried to charge their customers for private jet travel. And Brooklyn Gas tried to charge customers more than $1,170 for an employee’s apparent wedding.

In many cases, these types of fees were not identified by regulators but were instead uncovered and disputed by consumer advocates or nonprofit organizations involved in the regulatory process.

“It’s definitely hard to see,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School. “And the burden is on consumer advocates, ratepayers and the utility commission to sift through reams of data and try to pick out spending that is miscategorized.”

Massages are just the tip of the iceberg

The lavish corporate benefits are just the tip of the iceberg, the report says. The same regulatory systems that allow utilities to charge their customers for luxury trips and spa treatments also allow them to funnel ratepayers’ money into lobbying and self-serving advertising campaigns.

A three-year investigation by the California Public Advocates Office found that Southern California Gas charged customers for lobbying to prevent the electrification of bus fleets, homes and the Port of Los Angeles. These efforts included establishing and funding a front group opposing restrictions on gas connections in new buildings and organizing fake grassroots protests.

According to EPI, these campaigns often descend into “greenwashing.” Washington Gas portrayed methane as “safe” in a baseball sponsorship campaign, despite its well-documented environmental and safety risks.

In another case, Chesapeake Utilities ran ads promoting methane gas as “cozy” and “cozy” while attempting to recoup those advertising costs from ratepayers. Maryland regulators deemed such advertising “not in the public interest.”

YOU MAKE OUR WORK POSSIBLE.

SUPPORT

Floodlight is a nonprofit newsroom that investigates the powerful interests impeding climate action.