Executive Summary: Why and How Fossil Fuel Interests are Attacking Clean Energy?

Fossil fuel and utility interests, concerned about the rise of cheap clean energy, are financing attacks on pro-clean energy policies, in an effort to delay the growth of a market competitor.

The price of a solar panel has dropped more than 60% since early 2011, and the price of wind power is down by more than 50% in the past four years. Approximately 29% of the power added in 2013 in the United States was solar energy.

But, special interests tied to the fossil fuel and utility industries are spreading disinformation about the cost of clean energy. The Koch Brothers and their allies want to continue selling as much coal, oil, and gas as possible — and in their effort to rollback clean energy policies, are spreading falsehoods about the energy market.

Why would Koch Industries and other fossil fuel interests want to make clean energy seem expensive? Because they have a financial interest in squashing the market for clean energy.

Furthermore, these attacks on pro-clean energy policies are not about “creating free markets” as opponents of clean energy policies, like the State Policy Network (SPN) and the American Legislative Exchange Council (ALEC), claim. It’s about manipulating markets to benefit their allies (and financiers) in the fossil fuel business.

In a majority of states in the U.S., there is no free market for electricity; individuals cannot choose from which company to buy their electricity or from what source their electricity comes. In many locales, Public Utilities Commissions regulate monopoly utility companies in a closed marketplace.

Renewable portfolio standards (RPS) and net metering policies are sparking massive investment and deployment of clean energy technologies. And these two key policies, driving more of the grid to clean energy, are now under assault at the state level from fossil fuel and utility interests.

Renewable portfolio standards set requirements for utilities to slowly increase the use of clean, renewable energy sources — which is exactly why fossil fuel interests like Koch Industries, Peabody Energy, and others want to eliminate them. RPS laws have driven billions of dollars of investment into cleantech projects and generated thousands of jobs. The fossil fuel-funded Heartland Institute sponsored model legislation at ALEC’s meeting in June 2012 to eliminate RPS laws. In the past year and a half, these rollback attempts have surfaced in at least 15 states around the country.

Net metering policies ensure that utilities pay consumers the full retail price for electricity generated by customers when they invest in distributed energy systems (like a rooftop solar system). Edison Electric Institute (EEI), the utility industry’s trade association, “worked with ALEC on the [model] resolution” calling for the weakening of solar net metering policies, which was approved during ALEC’s meeting in December 2013, and has now appeared in numerous states. EEI released a report in January 2013 entitled, “Disruptive Challenges,” detailing the threat that distributed energy (especially solar) poses to the traditional utility industry business model and began taking action on the issue in 2013, pushing to repeal solar policies to protect utilities’ financial interests.

Ultimately, clean energy’s downward cost trends pose a serious threat to the fossil fuel and utility industries’ business model. Until recently, the electricity grid relied on centralized, mostly fossil fuel power plants to meet electricity demand. The emergence of affordable, clean electricity presents a serious threat to an industry that’s operated largely in the same way since Thomas Edison turned on the first investor-owned power station in 1882.

Due to the realities of the electricity market, fossil fuel and utility interests are attacking RPS and net metering in order to protect their business interests. ALEC is one front group that the utility industry is using to weaken or eliminate pro-clean energy policies, and is a valuable tool for utilities (and others) to lobby state legislators across the country. However, the real genius of this attack by special interests is the widespread use of additional front groups to lobby, spread disinformation, and pressure decision makers to eliminate clean energy policies.

How are Fossil Fuel Interests Attacking Renewable Energy Standards? Front Groups.

Fossil fuel-funded front groups repeatedly spread disinformation on renewable energy standard and net metering policies in an effort to overturn pro-clean energy laws in 2013 and 2014. This report details the efforts of these front groups to eliminate clean energy policies across the country.

The fossil fuel lobby aggressively uses lobbying and propaganda to achieve their goals. Self-identified “free market think tanks” are among the most effective advocates for the fossil fuel industry to lobby for policy changes. Dozens of these so-called free market organizations, a majority of which are members of the State Policy Network (SPN), worked to influence state level energy policies and attack the clean energy industry.

These organizations are usually described in neutral, nondescript terms, such as “think tank,” “institute,” or “policy group,” but publicized internal documents from the American Tradition Institute, Heartland Institute, and the Beacon Hill Institute suggest that these types of organizations embrace transactional relationships with the corporate lobbying interests that fund their operations.

The Beacon Hill Institute, a “think tank” based out of Suffolk University (and a Koch-funded member of SPN) submitted a controversial grant request to the Searle Freedom Trust, a prominent conservative foundation, in they expressly stated: “Success will take the form of media recognition, dissemination to stakeholders, and legislative activity that will pare back or repeal [the Regional Greenhouse Gas Initiative (or RGGI)].” In other words, the Beacon Hill Institute proposed to pursue biased economic research to support the express goal to “pare back or repeal” a regional climate change accord — all before the institute performed any research determining the economic effect of the law.

Another example of the pay-to-play nature of these so-called “think tanks” comes from Heartland Institute’s Internal fundraising documents which stated: “Contributions will be pursued for this work, especially from corporations whose interests are threatened by climate [change] policies.”

Despite positioning themselves as ideologically-focused on smaller government, dozens of these organizations aggressively denounce policy investments in clean energy as market-distorting and unnecessary, while remaining silent on the far-larger, decades-old stream of taxpayer dollars and policies supporting oil, gas, and coal interests.

Over the years, government support for fossil fuels has come from a variety of sources: tax deductions, tax credits, direct subsidies, cheap access to public property, pollution remediation, research and development, and entire government agencies devoted to helping promote and assist fossil fuel industry growth. By all credible measurements, fossil fuel subsidies are massive and extremely unpopular, and are flowing to some of the most highly profitable industries on earth.Yet, fossil fuel subsidies go largely unmentioned by these “free market” groups, such as the Heartland Institute, despite their avowed opposition to wasteful government spending.

Fossil fuel-funded front groups operate in multiple areas to influence the policy-making process in their attempts to eliminate clean energy policies. First, groups like the Beacon Hill Institute provide flawed reports or analysis claiming clean energy policies have negative impacts. Next, allied front groups or “think tanks” use the flawed data in testimony, opinion columns, and in the media. Then, front groups, like Americans for Prosperity, spread disinformation through their grassroots networks, in postcards mailed to the public, and in television ads attacking the clean energy policy. Finally, lobbyists from front groups, utilities, and other fossil fuel companies use their influence from campaign contributions and meetings with decision makers to push for anti-clean energy efforts.

Instead of advocating for a fair and free market for electricity, over the past year and a half, fossil fuel front groups have advocated to repeal, freeze, and eliminate pro-clean energy policies across the country on behalf of allies and funders in the fossil fuel industry.