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THE SOLUTION
STOP BILLING CUSTOMERS FOR CORPORATE PERKS AND LOBBYING AND INFLUENCE EFFORTS
Three states — Colorado, Maine, and Connecticut — were the first to implement effective and comprehensive policies blocking utilities from being able to pass on charges for lobbying to ratepayers. In Colorado, customers are expected to save $775,000 annually, money that would have otherwise gone to Xcel Energy’s political expenses. Customers under Avangard Gas in Connecticut recently saved over $555,000 annually.
ENSURE REGULATORS REPRESENT THE PUBLIC INTEREST, NOT SPECIAL INTERESTS
Utilities should no longer be allowed to divert money that customers pay to power their homes toward expenses such as political lobbying and influence efforts, including misleading ad campaigns and high-priced stadium skyboxes used to hobnob with elected officials.
Government policymakers and utility regulators should serve the public interest — only allowing corporate utilities to raise prices when doing so will benefit consumers and communities, not for price gouging purposes. Regulators shouldn’t allow utilities to raise prices on struggling consumers in order to pad multimillion-dollar CEO salaries or inflate payouts to Wall Street shareholders.
Unfortunately, what should be and what is are not always the same. Too many utilities have too much influence over the regulators who oversee them, leading to the proverbial fox guarding the henhouse.
The revolving door between corporate utilities and government agencies should be closed, ensuring that policymakers and regulators can’t do favors for utilities in order to land high-paying jobs at those utilities. When crafting policy, lawmakers must listen to the communities they represent and independent experts working in the public interest instead of corporate utility lobbyists whose primary interest is to help utilities make a buck on customers’ backs.
Our democracy — including how we approach energy — must serve the people, not powerful for-profit utility polluters.
PREVENT PRICE GOUGING AND PROFITEERING
Unlike most corporations, utilities have a special status. They are allowed to operate as monopolies and avoid market competition. In exchange, utilities are required to obtain approval from state government regulators (called “public utility commissions” in many states) before raising energy prices. This is supposed to serve as a check on price gouging and excessive profiteering.
In practice, though, regulators are often too deferential to utilities — allowing them to extract far more profit from things such as infrastructure projects than businesses in a competitive marketplace could get away with. For-profit utilities often inflate customers’ bills and then spend excessive money on executive compensation and dividends for Wall Street shareholders like Blackrock and Goldman Sachs. One solution is for regulators to limit the “rate of return” that utilities can charge on infrastructure projects. In some states, this could cut customer’ bills by as much as 10% almost instantaneously.
Regulators must be more skeptical of methane utilities’ requests to raise prices for pipeline projects. These projects are often unnecessary, can cost billions of dollars over budget, and leave customers holding the bag to pay off construction debt. More efficient, affordable options are usually available, and utilities should be required to pursue these alternatives when they make sense, especially when the communities being served prefer them. The bottom line is that communities should have a choice, and decisions shouldn’t just be made by corporate CEOs.
ALLOW UTILITIES TO HELP CUSTOMERS UPGRADE TO MORE EFFICIENT EQUIPMENT
Changing outdated pro-gas state laws can unlock millions of dollars in existing funding to support clean energy upgrades in our communities. This change would allow utilities to take money that would have gone to methane gas pipelines — which can cost up to $6 million per mile to replace—and use it instead to pay for households to upgrade to highly efficient electric equipment. Communities would benefit through healthier air and long-term cost savings.
ALERT CONSUMERS ABOUT RISKS WITH WARNING LABELS
Consumers have a right to know when they are being sold products that harm their health. Gas ranges fill indoor air with carcinogens and other pollutants that the EPA defines as “hazardous,” but the methane industry has tried to downplay these risks, and methane utilities and their lobbyists have opposed adding warning labels to appliances to educate consumers. Just as cigarette cartons have labels explaining the harm smoking causes or how prescription drugs carry “black box” warnings about potentially dangerous side effects, gas stoves should come with labels so consumers can make informed decisions and take steps to protect their health. Many states are currently considering warning label requirements.
EDUCATE BUILDERS AND CONTRACTORS ABOUT THE LATEST TECHNOLOGY
Efficient electric technology has improved so quickly that home builders, HVAC contractors, and kitchen remodelers often aren’t aware that affordable state-of-the-art alternatives to gas appliances and equipment are available and are a superior technology. For example, modern induction electric cooktops (different from electric stoves of the past) are beloved by chefs because of their precision and speed — they can bring water to a boil much more quickly than gas stoves. Many builders and contractors also don’t know about the health and environmental downsides of gas appliances. Instead of being allowed to mislead builders and contractors about methane gas by, among other things, calling it “clean,” utilities should be required to provide the professionals who often make decisions about equipment that gets installed in buildings with accurate, up-to-date information. Utilities’ thirst for profits is no excuse to keep people unwittingly locked into inferior products that cost more and harm health.
All of these options and more – including applying pressure on utilities to take steps on their own to get cheaper, cleaner energy to consumers – are part of an overall solution that puts ratepayers over profits.
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