New Laws Curbing Utility Political Spending Saving Ratepayers Millions of Dollars

Gas and electric customers in Connecticut have been spared from footing the bill for up to $10 million of their utilities’ political spending on lobbying, advocacy, and advertising activities since the state passed a law prohibiting recovery of such costs. 

The legislation, which went into effect in June 2023, prohibits utilities from using money they collect from ratepayers for various political influence expenses such as lobbying, advertising, and marketing, and contributions to trade associations and groups incorporated under Section 501 of the Internal Revenue Code. Additionally, the bill bars the recovery from ratepayers of perks and extravagant spending for the companies’ board of directors, corporate aircraft expenses, and the costs of investor relations. The law also prohibits charging ratepayers for costs associated with utilities’ attendance and participation in any rate proceeding before the state utility regulatory authority.

According to an analysis by EPI, recent disclosures by Eversource and Avangrid, the state’s investor owned utilities, show that since the law went into effect both companies spent a total of at least $9,738,302 on the costs prohibited from recovery. The law required utilities to file the annual, line-item disclosures of these expenses. Eversource’s disclosures do not include the entire sum, since the company redacted the salary figures of its internal employees’ labor on lobbying, advertising, and investor relations, and instead provided only the hours they spent on these tasks. According to Eversource’s tally, their employees spent a total of 7,889 hours on these three activity categories since the accountability bill passed

Eversource Connecticut (CL&P & Yankee Gas) – Political Costs Prohibited June ‘23-September ‘24

	Lobbying or legislative Action	Advertising& Marketing	Rate Case Attendance	Board of Directors & Investor relations	Membership& Contributionto Groups	Total
Cost	$921,482	$399,608	$207,665	$457,405	$2,289,831	$4,275,991
Hours spent internally*	3,222	9	3,445	1,213		7,889

* Eversource detailed the hours its employees spent on these activities instead of the dollar amounts they received as compensation.

Avangrid Connecticut (UI, SCG, CNG) – Political Costs Prohibited June ‘23-September ‘24

	Lobbying or legislative Action	Advertising& Marketing	Rate Case Attendance	Board of Directors & Investor relations	Membership & Contributionto Groups	Total
Cost	$350,030	$1,329,945	$1,574,408	$923,492	$1,284,436	$5,462,311

It’s not certain that the utilities would have sought to recover all of these costs in rates, absent the state’s landmark 2023 law. But the law prohibits them from doing so and requires the utilities to disclose the expenses in detail.

These latest disclosures detail a myriad of costs that do not benefit ratepayers. Yankee Gas, Eversource’s gas subsidiary in Connecticut, spent tens of thousands of dollars last year on extravagant Board of Directors meetings, including in Florida’s EAU Palm Beach Resort and LaPlaya Beach Resort and Wequasset Resort in Massachusetts. Other notable Eversource recent expenses in Connecticut include:

• Eversource paid Boathouse Group, Inc, a Massachusetts-based marketing agency, nearly $400,000 for “Strategic Corporate Advertising Campaigns.”
• Connecticut Light & Power, Eversource’s electric company in the state, paid over $1.6 million to various trade associations and charities, including $245,021 to the Edison Electric Institute, $83,740 to the MetroHartford Alliance, and $39,777 to the Connecticut Business & Industry Association. 
• CL&P spent $149,971 under the category “Benefits Overheads” for internal lobbying.

Avangrid paid over $52,000 to the Mason Marketing Agency for such campaigns as “Energy CT Needs” Meta ads, “UI Powers CT,” and “UI IG Likes Ad,” UI FB Page Likes.” Other notable Avangrid expenses in Connecticut in the past year include: 

• Over $1.2 million to various trade associations and charities, including $508,961 to the Electric Power Research Institute, $65,294 to the American Gas Association, and $83,376 to the Bridgeport Regional Business Council.
• Over $750,000 for attendance and participation in rate cases.
• Over $100,000 to Garrand Moehlenkamp LLC, a Portland, Maine-based branding agency. 
• Over $163,000 on corporate aircraft costs. 

Connecticut’s regulator, the Public Utilities Regulatory Authority, and intervenors in the companies’ rate cases can use the annual data to query the utilities about any irregularities or signs that the company may be charging customers for activities prohibited for cost recovery.

As EPI detailed in a recent report, the utility accountability bill that passed in Colorado in 2023 is also beginning to make a difference on ratepayers’ pockets. In a current gas rate case in the state, the Public Utilities Commission has disallowed more than $775,000 in annual costs for lobbying fees, trade association dues, and investor relations that Xcel Energy tried to recover. The PUC made clear that these costs were prohibited for recovery by the accountability law, and criticized Xcel for applying its lobbying prohibition too narrowly.