Who is behind anti-regional transmission organization ads in the Southeast?

Google users in North Carolina were furnished with anti-regional transmission organization (RTO) advertisements when searching for clean energy-related terms this July and August. The ads’ sponsors are not currently known, but the ads appeared as Duke Energy, Southern Company, and more than a dozen other utilities confirmed efforts to create a loosely-administered energy imbalance market in the Southeast earlier last month – the formation of which could thwart more thorough market reforms that some legislators in the region are considering, and which could integrate more renewable energy at lower prices.

The message of the Google ads echoed anti-RTO Facebook advertisements sponsored by a 501(c)(4) group late last year; that group does not disclose its funding, but its leader has connections to Duke Energy. 

Duke Energy did not initially respond to a request for comment regarding whether it placed the anti-RTO Google ads, or if it had a relationship to the 501(c)(4) group and that group’s advertising. A spokesperson for Southern Company said the utility was not involved with either. (Update: A Duke spokesperson provided comment after publication, writing, “Duke Energy has not contributed to Energy Consumers of the Carolinas and has no relationship to the ads referenced.”)

NC Google searches yield anti-RTO ads as utilities reveal market reform plan

Google searches conducted in North Carolina for the terms “clean energy”, “solar”, and “RTO” this July and August yielded ads calling RTOs “a failed experiment” and “federal overreach”. The advertisements further claimed that RTOs “hurt renewables development” and that wholesale power markets are “costing customers millions”. 

An RTO is an electric transmission system operator that ensures reliability and access to transmission infrastructure, and facilitates day-ahead or real-time electricity transactions, often across state lines. Some version of an RTO exists in most midwestern and northeastern states, but states in the Southeast do not have their own RTO, absent which utilities operate their own electric systems. 

Studies from the Brattle Group, the Brookings Institution, and faculty at Harvard University, among others, have concluded that RTOs promote greater deployment of renewable energy, along with fair and transparent pricing. An analysis by the Duke University Nicholas Institute for Environmental Policy Solutions found that a southeastern RTO “would likely produce the most benefits compared to other options”, reducing both emissions and costs. Both North and South Carolina lawmakers have called for utility market reform, with representatives in each state introducing legislation last year to study the formation of an RTO.

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In a move that could be an attempt to preempt these sweeping reforms, seventeen Southeastern power companies including Duke Energy and Southern Company announced initial plans to form an energy exchange mechanism across 10 states. This Southeast Energy Exchange Market (SEEM) would facilitate real-time power sales between participating utilities. Key details are scarce, and clean energy stakeholders have expressed concern that they have been excluded from the negotiations. Unlike other energy imbalance markets in the United States, utilities would preserve control over the exchange, rather than allowing for independent governance.

Map of proposed SEEM territory (Source: Southern Company)

Google advertising echoes anti-RTO Facebook ads by dark money group 

Similar anti-RTO ads appeared on Facebook in late 2019, backed by a dark-money group. Energy Consumers of the Carolinas (ECC) sponsored advertisements last November claiming “[a]n RTO is not a simple, one-size-fits-all remedy for electric power needs.” One ad, which earned 15,000 to 20,000 Facebook user impressions, linked to a blog post from the organization alleging that “RTOs do not drive renewable energy growth,” and calling consideration of such a market in the Southeast “a buzz-word solution in search of a problem.”

ECC is incorporated as a 501(c)(4) “social welfare” organization, which means it is not obligated to disclose its donors, and can engage in lobbying and political advocacy during elections. Such 501(c)(4) entities – and utility involvement therein – are under greater scrutiny from some investors and the public following federal charges against Ohio House Speaker Larry Householder, a 501(c)(4) group called Generation Now, and several lobbyists, who allegedly took over $60 million in exchange for passing a law that bailed out coal and nuclear plants, undoing Ohio’s renewable energy and energy efficiency standards. The money came primarily from the utility FirstEnergy Corporation and was routed through Generation Now, according to the prosecutors. The prosecutors have not charged FirstEnergy with any crimes to date. 

Energy Consumers of the Carolinas describes its mission as “advocat[ing] for fair, clean and reliable electricity through constructive dialogue”. Both its website and Facebook page were created in March 2018. ECC has also run pro-investor-owned utility (IOU) Facebook ads, stating that “[f]or accountability, flexibility and resources, the future points to IOUs as best suited for consumers” in November 2019. The group has run 20 Facebook advertisements in 2020 critical of South Carolina state utility Santee Cooper, which NextEra Energy, Dominion Energy, and Duke Energy have all bid to acquire, with the utility’s fate pending state legislative action. Duke Energy finished out of the running. The ads advocate for the sale of Santee Cooper, arguing that “reform won’t work”. Some of ECC’s advertised content explicitly promoted NextEra Energy as a Santee Cooper buyer, exhorting policymakers to vote for the company’s “proven track record”.

NextEra, whose Florida utility is not part of the SEEM proposal, did not respond to a request for comment as to whether the company is affiliated with ECC, or involved in its advertising.

According to its 2018 tax filings, ECC received $525,000 in revenue in 2018. It gave a $100,000 grant to the Palmetto Promise Institute, a South Carolina-based right-wing advocacy group and member of the State Policy Network, which is a lattice of state-based conservative “think tanks” and pressure groups with a history of advocating for state policies that would aid its corporate donors. The Palmetto Promise Institute ran ads on Facebook advocating for the sale of Santee Cooper in 2018 and 2019. The Energy and Policy Institute has requested a copy of ECC’s 2019 tax filings, which are not yet publicly available.

Duke Energy connected to leader of dark money group behind ads

Scott Carlberg is the Executive Director of Energy Consumers for the Carolinas, according to the group’s website. He is also its listed contact on the November Facebook ad disclosure, and is the author of the blog post to which the ad links. 

Carlberg previously worked for Duke Energy for over six years, including as Director of Community Relations and an officer of the Duke Energy Foundation, “plus other positions”, from 1998 to 2004, according to his LinkedIn profile. 

From 2012 to 2014, Carlberg served as President of E4 Carolinas, a 501(c)(6) group whose stated mission is “to cultivate a collaborative Carolina energy cluster to accelerate economic growth, efficient resources and care for our environment”. Duke Energy is a “Titanium”-level E4 Carolinas member company, the highest tier.

He lists his work at his own public affairs firm, Talking Points LLC, from 2004 to 2012, and then again from 2017 to present. In the first stint, he describes working to “[c]oordinate the ‘Charlotte USA – The New Energy Capital’ economic development effort” and “[a]ssist Duke Energy to convene the original meeting on behalf of Duke’s CEO in 2009.”

Carlberg also worked as Director of Strategic Communications for the Electric Power Research Institute (EPRI), a research and development organization. EPRI is a 501(c)(3) organization funded by electric utilities, who generally recover their dues from ratepayers.

This post has been updated to include comment from Duke Energy (8/19/2020 at 5:00pm EDT).

“Transmission Lines” by Chris Hunkeler is licensed under CC BY-SA 2.0