Charlie Spatz The Maine legislature passed a bill this week prohibiting investor-owned utilities from charging customers for lobbying, trade association and chambers of commerce dues, charitable contributions, and public relations expenses. The bill also includes a provision to prohibit utilities from recovering contributions or gifts to political candidates, political parties, political or legislative committees, or any committee or organization working to influence referendum petitions or elections.
The bill, LD 325, sponsored by Senator Michael Tipping, passed the state Senate with a bipartisan 25-9 vote on June 13. The state House engrossed the legislation the following day with a voice vote after previously approving an earlier version of the bill on June 8. The bill now heads to Democratic Governor Janet Mills’ desk.
Maine’s legislation follows similar bills passed in Connecticut and Colorado last month. Colorado’s law prohibits utilities from charging their customers for legislative lobbying. Connecticut’s law goes further by using a more expansive definition of lobbying, prohibiting utilities from charging customers for efforts to influence administrative action by executive agencies as well. Maine’s legislation also includes a comprehensive definition of lobbying, eliminating the risk of loopholes that may have left ratepayers exposed to paying for certain political advocacy activities.
All three pieces of legislation also include requirements for annual detailed disclosure filings to ensure compliance. Colorado and Maine utility regulators and customers will be able to see descriptions of the expense, including the date, payee, amount, and purpose. Connecticut utilities must also disclose any political expenses spent by the parent company directly billed or allocated to the regulated utility.
Alongside state lawmakers, other officials are pushing utility accountability reforms. The Louisiana Public Service Commission recently opened a docket to explore utilities’ political and advocacy spending that might set the stage for implementing similar restrictions. Similarly, Michigan Attorney General Dana Nessel filed comments with utility regulators in February that requested greater transparency on utility influencing expenses.
Maine’s investor-owned electric utilities under pressure from citizen initiative
The passage of LD 325 comes at a challenging time for Central Maine Power (CMP) and Versant, Maine’s two investor-owned electric utilities, which are campaigning against a citizen initiative to establish a statewide consumer-owned utility. To date, political action committees affiliated with CMP and Versant have spent over $15 million fighting the initiative that would force the electric utilities to sell their regulated assets to a non-profit called Pine Tree Power Company.
For years, the two utilities have faced public outrage over reliability and other operation failures, and ranked in last place for consumer satisfaction scores in their respective business segments last year. Further consumer discontent has risen from high electric rates, which has contributed to 13% of Maine’s 700,000 residential electric customers receiving disconnect notices this year, according to the Bangor Daily News. This year CMP sent out 62,000 notices as of mid-May. Maine Public Advocate William Harwood told the Bangor Daily News at that time that he expected Versant, which is noticing customers for disconnection gradually, to send out 32,000 this year. In an email to the Energy and Policy Institute, Versant spokesperson Judy Long disputed that estimate, saying that the company had sent 9,000 disconnection notices as of mid-May, but that “while we did have more than 30,000 customers in arrears at the end of March, we do not expect to send out that many disconnection notices.”
Utility accountability policies gain momentum after years of scandals
As EPI and others have detailed, electric and gas utilities are using money that they collect from customers’ monthly bills to fund political machines that push legislation, curry favor with regulators, and alter the outcomes of elections – sometimes even breaking laws in the process. In the last three years alone, the public has learned that:
- FirstEnergy, an Ohio utility, paid $60 million in bribes to the Ohio House speaker’s political organization. In return the utility secured a $1 billion ratepayer-funded bailout for several of its unprofitable nuclear and coal plants, and another lucrative provision that guaranteed the profits of FirstEnergy’s Ohio utilities at ratepayers’ expense.
- Florida Power & Light spent millions of dollars on political consultants who engineered a scheme to siphon votes to third-party “ghost candidates” who were recruited to appear on the ballot for competitive state Senate seats without actually running, according to reporting by the Orlando Sentinel. The utility-backed effort targeted legislators who were trying to hold the utility accountable, the Sentinel reported.
- ComEd, the largest electric utility in Illinois, arranged jobs and contracts for associates of then-Illinois House Speaker Michael Madigan to influence and reward the official for his efforts to pass legislation favorable to the utility.
In at least the Ohio and Illinois examples, subsequent regulatory actions have made it clear that the utilities used customer money to fund portions of their schemes, while investigations into the Florida scandal remain ongoing.
Editor’s note (6/23/23): additional detail and context added about customer dissatisfaction with Maine’s utilities.
Editor’s note (6/26/23): added comment from Versant disputing the estimate for the number of customers to whom it will send disconnection notices this year.
Further reading:
Washington Post: Three states just barred utilities from charging customers for lobbying
Energy and Policy Institute: Getting Politics Out of Utility Bills; How policymakers can protect customers from being forced to fund utilities’ political machines
Energy and Policy Institute: Connecticut passes bill prohibiting utilities from charging ratepayers for political activities
Energy and Policy Institute: Colorado law prohibits utilities from spending ratepayer money on politics
CT Mirror: Senate passes bill to reform utility regulation in CT
Grist: A new law in Colorado will prevent utilities from charging customers for lobbying
