News > Beat back monopoly utility bullies

Beat back monopoly utility bullies

• Energy democracy & policy

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.

In 2023, Connecticut, Colorado, and Maine passed the first laws to stop utilities from using our money against our own interests. In February 2024, there were nine more states where similar legislation had been introduced including Arizona, California, Illinois, Maryland, Michigan, New York, Ohio, Utah, and Virginia. See Energy and Policy Institute’s map and update on these bills for more information.

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

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

1. Membership, dues, sponsorships, or contributions to any trade associations [if any portion of those contributions supports political influence activities or advertising];
2. Charitable giving, including contributions to organizations qualified under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended, and any expenses related to charitable giving;
3. Political influence activities;
4. Advertising;
5. Any compensation for any employee of a utility, if any portion of that compensation is used for attempts by the employee to influence the decision of federal, state, or local government officials; 
6. Contributions to political candidates, political parties, campaign committees, issue committees, or independent expenditure committees or other political expenses;
7. Litigation regarding existing or proposed federal, state, or local regulations, legislation, ordinances;
8. Any costs, including marketing, administration, customer service, or other costs, for products or services not regulated by the Commission;
9. Penalties or fines, including tax penalties or fines, issued against a utility;
10. Travel, lodging or food and beverage expenses for a utility’s board of directors and officers or the board of directors and officers of a utility affiliate;
11. Any owned, leased or chartered aircraft for the utility’s board of directors and officers or the board of directors and officers of a utility affiliate;
12. Investor relations;
13. Annual compensation in excess of the current annual compensation of the governor for any individual, including employees of the utility, members of the utility’s board of directors and officers, or the board of directors and officers of a utility affiliate.

Section 2:  Prohibitions – Public Utility Commission advocacy expenses

[Note: this model bill presents two options for how a state should allow utilities to recover the costs of their advocacy in front of a Public Utility Commission. The first option prohibits the utility from recovering the costs that they incur for advocacy in any contested proceeding. The second option requires that the Commission take measures to limit those costs. Note that the language defining political influence expenses in Section 5 hinges on which option is chosen.]

Option 1:
No utility with more than [NUMBER] ratepayers shall recover through rates any direct or indirect cost associated with its attendance in, participation in, preparation for, or appeal of any contested proceeding conducted before the Commission. Such unrecoverable costs shall include, but need not be limited to, attorneys’ fees, fees for expert witnesses or consultants, the portion of employee salaries associated with such attendance, participation, preparation or appeal of a contested proceeding, and any other related costs identified by the Commission.

[OR]

Option 2:
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 shall consider:

1. Limiting the amount of expenses for outside experts, consultants, and attorneys’ fees 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 is proportionate to the overall expenses incurred by the statutory consumer advocate in the same proceeding. [NOTE: In states with intervenor compensation, the intervenor compensation budget may also be used as a limiting factor.]

Section 3: Report

1. 1. On or before April 30, and annually thereafter, each utility [optional: with more than [NUMBER] ratepayers] shall provide to the Commission a list of expenses from the previous calendar year to ensure the utility’s compliance with this Act.
   2. Such report shall include, but need not be limited to:
      1. An itemized list of all expenses associated with activities described in Sections 1 and 2 of this Act, including expenses paid:
         1.  To vendors, including a separate line item for each payment to a vendor for activities described in Sections 1 and 2 of this Act;
         2. To trade associations [if any portion of those expenses supports political influence activities or advertising]; 
         3. To organizations qualified under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended;
         4. To utility employees in the form of compensation or reimbursement; For each employee, the list shall include the employee’s job title, a job description sufficient to describe the employee’s responsibilities, each activity described in Section 1 or 2 of this Act in which the employee engaged and a description sufficient to describe the nature of that work, the total annual compensation for the employee, the percentage of annual compensation paid for work associated with the activities described in Section 1 or 2 of this Act, the percentage of annual compensation recoverable from ratepayers, and all Uniform System of Account codes to which compensation was recorded for the employee.
         5. To utility affiliates, including a separate line item for each payment to an affiliate for activities described in Sections 1 and 2 of this Act.  
      2. A list of all expenses paid to vendors;
      3. A list of covered business units of the utility. For each covered business unit, the utility shall include a list of employees who work in that covered business unit. For each employee, the utility shall include the employee’s job title, a job description sufficient to describe the employee’s responsibilities, and whether the employee conducted an activity that is prohibited for recovery by Section 1 or 2 of this Act. For employees who conducted activities prohibited for recovery by Section 1 or 2 or this Act, the report must list each activity described in Section 1 or 2 of this Act in which the employee engaged and a description sufficient to describe the nature of that work, the total annual compensation paid for work associated with the activities described in Section 1 or 2 of this Act, the percentage of annual compensation recoverable from ratepayers, and all Uniform System of Account codes to which compensation was recorded for the employee.
      4. Itemized lists shall include the billing amount, billing date, identity of payee, and an explanation of the expense sufficient to describe its purpose.
      5. Any other itemized information deemed relevant by the Commission.

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 recorded to an above-the-line account an expense that is prohibited for recovery from ratepayers by 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 the cost that the utility improperly recorded in the above-the-line account.
3. In addition to assessing a nonrecoverable penalty against a utility pursuant to Section (4)(2) of this Act, the Commission shall order the utility to refund the amount improperly recovered, plus interest, to ratepayers.
4. For each penalty assessed and collected from a utility pursuant to subsection Section (4)(2) 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. “Above-the-line account” means an account containing expenses the utility asserts are part of the revenue requirement, recoverable from ratepayers.
2. Advertising means 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 includes activities undertaken in support of activities listed in Section 5(2) of this Act, including research, analysis, reparation, or planning, or any other related costs identified by the Commission.
   2. Advertising does not include:
      1. Public communication required by law, regulation or order;
      2. Public communication with the primary purpose of communicating service interruptions, safety measures, or emergency conditions;
      3. Public communication  with the primary purpose of communicating employment opportunities with the utility;
      4. Public communication directly related to a program approved by the Commission regarding income-based service, special rates, or energy conservation.
   3. A communication shall be considered advertising if any portion of the communication is “advertising” as defined in this section.
3. Commission means the [State] Public Service/Utilities Commission.
4. Compensation means salary, bonus, benefits, or other consideration of any value.
5. Covered business unit means a division, department, or other organizational employee group within a utility that performs activities described in Section 1 of this Act.
6. Expense means any payment, expenditure, compensation, or costs.
7. Political influence activity means any expense for the purpose of directly or indirectly influencing the possible:
   1. Adoption, repeal, or modification of federal, state, or local regulations, legislation, or ordinances;
   2. Election, recall, appointment, or removal of a public official, or the adoption or rejection of initiatives or referenda;
   3. Approval, modification, or revocation of utility franchises;
   4. Public opinion with respect to federal, state, or local—
      1. Adoption, repeal, or modification of regulations, legislation, or ordinances;
      2. Election, recall, appointment or removal of a public official, or the adoption of initiatives or referenda;
      3. Approval, modification, or revocation of utility franchises;
      4. Utility rate setting;
   5. The decisions of federal, state, or local government officials;
   6. Political influence activities include activities undertaken in support of activities listed in Section 5(7)(A-F), including research, analysis, preparation, or planning, or any other related costs identified by the Commission;[** NOTE there are two options depending on SECTION 2 selection:]

      **IF OPTION 1 in SECTION 2 of the bill is chosen:
      
      g. Political influence activities do not include:

      1. Appearances before the Commission when the utility is the applicant in an uncontested proceeding;
      2. Appearances before a legislative committee, the Commission, or a government agency when the utility’s participation has been specifically requested in writing by the chair of the legislative committee, chair of the Commission, or head of the government agency.

      **IF OPTION 2 in SECTION 2 of the bill is chosen:
      
      g. Political influence activities do not include:

      1. Appearances before the Commission when the utility is the applicant in a proceeding;
      2. Appearances before a legislative committee, the Commission, or a government agency when the utility’s participation has been specifically requested in writing by the chair of the legislative committee, chair of the Commission, or head of the government agency.
8. Utility means an investor-owned gas or electric utility that serves ratepayers in the state.
9. Utility affiliate means an entity that is related to the utility as a subsidiary, parent, or sibling corporation, including by shareholding or other means of control.
10. Vendor means a person or business that provides goods or services.

Section 6: Severability

The provisions of this Act 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.