AG Dana Nessel Calls For More Oversight of Utility Political Activities

Michigan Attorney General Dana Nessel is urging state regulators to open up lobbying activities by utilities to more oversight and transparency by instituting a slate of much-needed reforms that would help groups like CUB counteract the influence that utilities have had on the political and ratemaking process — often to the detriment of ratepayers.

AG Nessel’s recommendations, submitted as comments to the Michigan Public Service Commission (MPSC) in an ongoing docket regarding rate case filing requirements, would take on a root cause of many of the problems facing Michigan ratepayers that CUB works to address: there is a mismatch of political power between utilities and ratepayers because the utilities are owned by well-funded, Fortune 500 holding companies. The utilities have every interest in charging ratepayers as much as they can, and they use their massive resources to affect the actions of legislators and regulators. For just two of many potential examples of how that influence leads to bad outcomes for Michigan ratepayers, see a) the policies restricting rooftop solar that the utilities have (thus far) successfully defended, and b) the degree to which the utilities have used the rate case process to wring higher and higher rates from residential customers, despite the generally poor, unreliable service that customers receive.

In the comments, the AG argued that the requirements for what the utility must file with the MPSC every time they request a rate increase “are currently deficient in providing sufficient information and insight on expenses incurred by the utilities to influence public policy and achieve rate case outcomes.” To remedy these deficiencies, the AG asked the MPSC to disclose the following information:

  1. Expenses for the purpose of influencing regulation or legislation directly or indirectly through affiliates. 
  2. Expenses for the purpose of influencing public opinion about policy issues or about the company’s reputation directly or indirectly through affiliates. 
  3. Expenses relating to all proceedings before the Commission, with specificity about how much and how the company spent on the previous rate case and forecasted for the current general rate case. 
  4. Contributions to 501(c)(3) and 501(c)(4) to each non-profit organization, including those organizations receiving contributions from the utility’s affiliated 501(c)(3) charitable foundations. 
  5. Expenses for any litigation that utilities file which seeks to overturn rules or statutes. 

These requirements would likely shed more light on practices like, for example, DTE Energy’s payments to church leaders to win their public support for DTE activities.

The AG’s efforts here are closely related to the question of whether utilities can spend ratepayer money on dues to associations like the Edison Electric Institute that take controversial political stances, like promoting regulations restricting rooftop solar. Last year, CUB worked with the AG on comments submitted to the Federal Energy Regulatory Commission, which was reviewing whether utilities should be able to continue to account for certain spending on political-related activities in a way that makes it easier for customers to be charged to pay for those costs.

We’re still waiting for action from FERC on that front. In the meantime, for a much deeper dive into this issue, check out the Energy and Policy Institute’s Getting Politics Out of Utility Bills report, released last month.