Should you pay trade association dues for utility companies?

Currently, utility companies are allowed to charge customers dues to trade associations that support the energy status quo. It’s a little-known part of your utility bill, and a 5-member commission is assessing whether it should continue to be allowed. You see, under the current accounting system, utilities are allowed to pass these costs on to customers, even though trade associations fight climate policies and customers oppose these activities.

Advocacy groups argue that trade association dues should be clawed back at rates that would increase transparency around the issue.

The Federal Energy Regulatory Commission (FERC) is embroiled in an investigation into whether it should change its accounting rules to prevent electric and gas utilities from recovering expenses related to political and lobbying contributions from their customers.

The Center for Biological Diversity, an environmental group, filed a petition in March asking the commission to reconsider this system. The petition argued that customers have the First Amendment right not to fund anti-environmental activities they oppose.

“It’s time to stop forcing people to support anti-environmental business groups that stand in the way of the urgent transition to clean energy,” said Howard Crystal, legal director of the Center for Biological Diversity’s Energy Justice program. Washington Post. “Often these groups work directly against the clients’ own interests, as well as the future well-being of their children.”

FERC issued a Notice of Investigation into the matter in December, asking the public and trade groups to intervene. Several trade organizations were named in the petition – many of which claim to be working for a clean energy future while, behind the scenes, are seeking to delay zero emissions through stalling techniques.

In its petition, the Center for Biological Diversity cited the Edison Electric Institute and the American Gas Association as two examples of trade groups that have fought climate policies and stuck taxpayers with the bill.

  • The Edison Electric Institute, the leading industry association for utility companies, has sought to delay implementation of the Clean Power Plan, according to the Washington Post. In 2015, the institute gave $7.7 million to the Utility Air Regulatory Group, a now-defunct group that argued against the Clean Power Plan in a federal appeals court.
  • The American Gas Association has lobbied state lawmakers nationwide to ban local governments from banning natural gas in new buildings. Arizona, Louisiana, Oklahoma and Tennessee passed laws protecting gas in new construction last year, and similar laws are being considered in 12 other states.

Other organizations in the energy trade group cited in the Center for Biological Diversity petition include the Nuclear Energy Institute, the American Public Power Association and the National Rural Electric Cooperative Association.

A first round of public comment was due last month; responses are due March 23, 2022.

The notice seeks comments on 22 questions focused on 3 areas:

  • Delineation of Recoverable and Non-Recoverable Industry Association Dues by Member Utilities for Ratemaking Purposes
  • Increased transparency of industry association expenditures and segments of industry association dues billed to utilities as well as utility and industry association expenditures from civic, political and related activities
  • A guidance framework if the Commission determines that action is needed to further define the possibility of recovering industry association dues billed to utilities and/or utility expenditures from civic, political and related activities

A coalition of Democratic senators last month sent a letter to FERC Chairman Richard Glick urging him to change course. “For too long, public utilities have financed the political activities of professional associations using captive taxpayer funds,” they wrote. “These business associations then push for policies that often run counter to the interests of taxpayers.” The letter was signed by Senators Sheldon Whitehouse (RI), Edward J. Markey (MA), Elizabeth Warren (MA), Jeff Merkley (OR) and Dianne Feinstein (CA), as well as Bernie Sanders (VT), an independent who caucus with the Democrats.

The natural gas bet

Cities and towns across the country are rewriting local building codes so new homes and offices can’t use natural gas, a fossil fuel that when burned emits carbon dioxide into the atmosphere . New laws would require builders to install heat pumps instead of gas furnaces and electric ranges instead of gas burners.

In response, the American Gas Association and its members are campaigning in state houses across the country to ban the new local ordinances. Last year, four states passed such laws and this year similar legislation was introduced in 12 more.

The hill joined the tirade, calling out FERC earlier this year for what is seen as “favoritism for renewables over natural gas, ignoring cost and reliability issues.”

Municipalities seem not to listen.

On February 1, the Seattle City Council voted unanimously to restrict the use of natural gas in new commercial buildings and multi-family homes over three stories. Puget Sound Energy, on the other hand, which distributes both gas and electricity to customers in Washington, says it is “fuel neutral” and has set an “ambitious goal” to be neutral. in carbon for its gas sales by 2045.

From the recent ban on gas in new construction in New York, to the constant march of Californian cities to “cut the pipe”, to the backlash and banning of gas bans in 20 states, methane has become a important battleground where America’s transition from fossil fuels is taking place.

In Colorado, the Denver Office of Climate Action, Sustainability and Resilience has approved a plan that calls for newly constructed homes and buildings to be largely electrified by 2027. Say goodbye to “natural” gas “.

The push for clean energy legislation

By investing in clean energy in the United States, utilities could accelerate the transition to a zero-emissions future. This is especially important at a time when access to energy is disrupted by foreign supply chain disruptions and the war in Ukraine. Trade association dues could be more appropriately directed to organizations that provide pathways to clean energy alternatives to fossil fuels, such as those promoting renewable energy in general, solar power, wind power, or vehicles. electrical.

The American Council on Renewable Energy (ACORE) brings together finance, policy and technology to accelerate the transition to a renewable energy economy. They focus on collaborative advocacy in the renewable energy sector.

The Solar Energy Industries Association® (SEIA) is leading the transformation to a clean energy economy, creating the framework for solar power to reach 30% of electricity generation in the United States by 2030. SEIA works with its 1,000 member companies and other strategic partners to fight for policies that create jobs in every community and shape fair market rules that promote competition and the growth of reliable, low-cost solar energy. .

The United States Renewable Energy Association (USREA) is a membership association that promotes sustainable energy, alternative energy, energy efficiency, and clean renewable technologies. Members of the association include people who believe in renewable energy, companies and schools in the renewable energy sector; and renewable energy customers.

The Electric Drive Transportation Association (EDTA) is a trade association that promotes battery, hybrid, plug-in hybrid and fuel cell electric propulsion technologies and infrastructure. EDTA conducts public policy advocacy, provides education and outreach, industry networking and conferences. Their members include vehicle and equipment manufacturers, energy companies, technology developers, component suppliers and government agencies.

American Clean Power is the voice of clean energy companies powering America’s energy future and providing cost-effective solutions to the climate crisis while creating jobs, driving massive investment in the American economy and driving high-tech innovation across the nation.


 


 


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Andrew B. Reiter