Beat back monopoly utility bullies

By Solar United Neighbors on September 26, 2023

“Stop hitting yourself!”

This taunting command is familiar to anyone who has experience with a schoolyard bully. It’s also what monopoly utilities are doing to their customers. They’re using the money they collect from our monthly bills to lobby against our interests and make it harder for us to go solar.

That’s why people in states across the country are fighting back, and winning.

They’re passing legislation to stop utilities from spending ratepayer funds for lobbying state legislators and other decision makers, excessive CEO pay, and, other inappropriate uses.

This year Connecticut, Colorado, and Maine passed the first laws to stop utilities from using our money against our own interests.

We want to keep this momentum going. That’s why Solar United Neighbors and several coalition partners have put written model bill language (also see below). It is a template that other states can use to stop utility bullying.

Want to get involved to stop utility corruption in your state? Contact your Congressional representatives or reach out to us at advocacy@solarunitedneighbors.org.

Model Bill on Utility Cost Recovery of Political Expenses

Section 1: Prohibitions – political and investor-related expenses

In [refer to relevant section of Code], [add/revise/repeal and substitute the following in lieu thereof]:

No utility shall recover through rates any direct or indirect cost associated with:

  1. Membership, dues, sponsorships or contributions to a business or industry trade association, group or related entity incorporated under Section 501 of the Internal Revenue Code of 1986, as amended;
  2. Charitable giving expenses, including contributions to organizations qualified under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended;
  3. Lobbying as defined by [relevant section of state code, assuming that the code defines lobbying to include any actions to communicate directly or solicit others to communicate with any official or their staff in the legislative or executive branch of government or in a quasi-public agency, at any level including municipal, state and federal, for the purpose of influencing any legislative or administrative action. If the state code does not define lobbying in those terms, then the bill should define lobbying in its own definitions; see bottom], including any costs for activities undertaken in support of lobbying such as policy research, analysis, preparation, and planning undertaken in support of lobbying. 
  4. Advertising, marketing, communications, or public education that seek to influence public opinion, including any costs associated with activities such as research, analysis, preparation or planning undertaken in support of advertising, marketing, communications, or public education, or any other related costs identified by the Commission, unless such marketing, advertising, communications or related costs are specifically approved or ordered by the Commission.
  5. Contributions to political candidates, campaign committees, issue committees, or independent expenditure committees or similar political expenses;
  6. Litigation to influence, modify, or repeal existing Federal, State or local regulations, legislation or ordinances.
  7. Marketing and administration or customer service for unregulated products or services provided or sold by the utility or the utility’s affiliates.
  8. Tax penalties or fines issued against the utility
  9. (1) travel, lodging or food and beverage expenses for such company’s board of directors and officers or the board of directors and officers of such company’s parent company; (2) entertainment or gifts; (3) any owned, leased or chartered aircraft for such company’s board of directors and officers or the board of directors and officers of such company’s parent company; or (4) investor relations.
  10. Annual compensation for any employees or members of the board of directors of the company exceeding the current annual salary of the governor.

Section 2:  Prohibitions – contested proceeding advocacy expenses

No investor-owned utility with more than [NUMBER] customers shall recover through rates its direct or indirect costs associated with its attendance in, participation in, preparation for, or appeal of any contested proceeding conducted before the Commission. Such costs shall include, but need not be limited to, attorneys’ fees, fees to engage expert witnesses or consultants, the portion of employee salaries associated with such attendance, participation, preparation or appeal of a contested proceeding and related costs identified by the Commission. 

[OR:]

The Commission shall establish rules to limit the amount of expenses associated with a utility’s attendance in, participation in, preparation for, or appeal of any contested proceeding conducted before the Commission that a utility may recover from ratepayers. In establishing the rules, the Commission may consider:

  1. Limiting the amount of expenses for outside experts, consultants, and legal resources that are recoverable;
  2. Setting an overall percentage of the utility’s expenses in a contested proceeding that are recoverable;
  3. Limiting the utility’s recoverable expenses to an amount that takes into account the overall expenses made by the statutory consumer advocate in the same proceeding.

Section 3: Report

  1. On or before [DATE], and annually thereafter, each utility [optional: with more than [NUMBER] customers] shall report to the Commission a list of expenses to ensure the utility’s compliance with this Act.
  2. Such report shall include, but need not be limited to:
    1. A list of all outside services or vendors paid by the utility;
    2. An itemized list of all expenses associated with activities described in Section 1 of this Act, including expenses made:
      1. To third-party vendors
      2. To utility affiliates, subsidiaries or parent companies
      3. To utility employees in the form of compensation.
    3. For each itemized expense associated with activities described in Section 1 of this Act, the billing amount, date, identity of payee, and an explanation of the expense sufficient to describe its purpose. 
    4. The job title, portion of salary, and expenses of any employees of the investor-owned utility, or any affiliates or parent company of the investor-owned utility, for performed work associated with the activities described in Section 1 of this Act.
    5. In the case of an expense associated with activities described in Section 1 of this Act made to a third-party vendor by a centralized service company, parent company, or other corporate affiliate of utility, the identity of that third-party vendor;
    6. Any other itemized information deemed relevant by the Commission.
  3. For each business unit of the investor-owned utility that performs work associated with prohibited activities described in Section 1 of this Act, a list of each employee job title, a job description sufficient to describe each employee’s responsibilities, the total annual compensation for each employee, and the percentage of that total annual compensation that was charged to ratepayers.
  4. No public service company shall recover through rates any costs associated with the preparation of such report.

Section 4: Enforcement

  1. The Commission shall monitor and investigate compliance and noncompliance with this Act. 
  2. If the Commission determines that a utility improperly recovered costs pursuant to Sections 1 or 2 of this Act, the Commission shall assess a non-recoverable penalty against the utility in an amount that is not less than the total amount of costs improperly recovered.
  3. In addition to assessing a nonrecoverable penalty against a utility pursuant to subsection (5)(B) of this Act, the commission shall order the utility to refund the amount improperly recovered, plus interest, to customers.
  4. For each penalty assessed and collected from a utility pursuant to subsection (5)(B) of this Act: 
    1. A portion of the penalty, as determined by the Commission, may be distributed to ratepayers, through a rebate;
    2. A portion of the penalty, as determined by the Commission, may be distributed to the Commission for the purpose of increasing resources for enforcing this Act.

Section 5: Definitions

  1. Utility means an investor-owned gas or electric utility that serves customers in the state.
  2. Lobbying [if not defined appropriately elsewhere in statute]: Any actions to communicate directly or solicit others to communicate with any official or their staff in the legislative or executive branch of government or in a quasi-public agency, at any level including municipal, state and federal, for the purpose of influencing:
    1. The adoption, modification or repeal of regulation, legislation or ordinances;
    2. Election or appointment of public officials or referenda
    3. The approval, modification, or revocation of utility franchises
  3. Expenses: Any payment that a utility pays to an external firm, a corporate affiliate, or an employee of the utility in the form of compensation.
  4. Commission: The [State] Public Service/Utilities Commission.
  5. Advertising: the act of publishing, disseminating, soliciting, or circulating written, online, video, or audio communication intended to induce a person to patronize a product, service, business, or industry; promote a business’s brand; otherwise emphasize desirable qualities about a product, service, business, or industry; or influence public opinion with respect to legislative, administrative, or electoral matters.
    1. Advertising does not include:
      1. Advertising required by law, regulation or order;
      2. Advertising with the primary purpose of communicating service interruptions, safety measures, or emergency conditions; 
      3. Advertising with the primary purpose of communicating employment opportunities with the utility.
      4. Advertising directly related to a program approved by the Commission regarding income-based service, special rates, or energy conservation.

Section 6: Severability 

The provisions of this bill are severable. If any provision of this bill or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.