When households in the United States pay their gas and electric bills, they are paying for energy, the wires and pipelines needed to get that energy into their home, and the cost of maintaining that infrastructure. But those monthly payments can also fund efforts by utilities lobby against climate policy.
While federal law prohibits utilities from recouping lobbying expenses from customers, consumer advocates say those rules lack teeth and are not adequately enforced. Now states are taking the lead in banning the practice. According to the utility watchdog group Energy and Policy Institute, legislators in eight statesinclusive California and Maryland, introduced bills this year that would prevent utilities from charging customers for the cost of lobbying, advertising, trade association expenses and other political activities. The measures build on a growing trend in government policy: Last year, Colorado, Connecticut and Maine became the first states in the nation to pass sweeping laws preventing utilities from passing on the costs of lobbying to ratepayers.
“There’s a lot of recent success that states can look to for inspiration,” said Charles Harper, head of power sector policy at the climate advocacy group Evergreen Action. “People are starting to pay attention because they realize that they are paying for climate denial in their bills every month.”
Over the years, utility companies have come under fire for lobbying to thwart climate policy and keep fossil fuel plants running. In several high-profile cases, governments have discovered that those lobbying campaigns were partially funded by consumers. In one particularly egregious example, the Ohio utility FirstEnergy admitted to fraud in 2021 after use millions of taxpayer dollars to bribe the then speaker of the Ohio House of Representatives, Larry Householder, to succeed legislation saving FirstEnergy’s nuclear and coal-fired power plants and rolling back renewable power standards.
Meanwhile, in California, the state’s Office of Public Advocates found last year that gas utility SoCalGas charged taxpayers a total of $29.1 million between 2019 and 2023 to fund lobbying efforts against building electrification policies, which reduce the use of oil and gas-powered appliances in buildings.
Many of the bills introduced this year, including those in California, Maryland and Utah, broadly define lobbying as any activity intended to influence political outcomes. This includes advertising to boost a company’s image, as well as fees paid to utility associations, which often lobby at the federal level. The Edison Electric Institute, an industry group representing investor-owned electric utilities, advocated against rooftop solar programs and stricter federal carbon emission standards for example at power plants. Another trade group representing natural gas utilities, the American Gas Association, has petitioned against stricter federal energy efficiency standards and advertised the benefits of cooking with natural gas for decades.
John Minchillo/AP Photo
“Any claim that we have not been a leader in advancing environmental goals is simply not accurate,” Karen Harbert, president and CEO of the American Gas Association, told Grist in an email. Harbert also noted that the gas industry “has long been committed to working with policymakers and regulators to help meet our nation’s ambitious climate and energy goals.” Sarah Durdaller, director of media relations at the Edison Electric Institute, told Grist that the trade group is involved in lobbying and advocacy “to ensure that electricity customers have the affordable, reliable and resilient clean energy they want and need.” Durdaller noted that the institute complies with federal disclosure requirements and voluntarily provides an annual report on lobbying expenditures.
In Maryland, utility Potomac Edison, a subsidiary of FirstEnergy, admitted to state regulators last year that it improperly charged customers. nearly $1.7 million in lobbying expenses, including some related to Ohio’s FirstEnergy bribery scandal. Maryland’s bill, introduced in both chambers, would prevent utilities from charging customers for investor relations, and travel, lodging and entertainment for a utility’s board of directors or parent company. The bill, along with similar ones introduced in states such as Ohio, Utah and Arizona, would require utilities to file an annual report detailing all costs related to lobbying and advertising. In Maryland’s proposal, those costs would include the salaries and job descriptions of any staff involved in lobbying.
Legislation introduced in California would also require utilities to file detailed reports on all lobbying activities and explain that they were funded by shareholders — not customers. California’s bill, as measures introduced in Ohio and Utah, goes beyond Maryland’s bill by also requiring state utility commissioners to impose fines on utilities that don’t comply with the rules. Under the California bill, three-quarters of those fines would go into a fund to help low-income households switch to electric appliances. The other quarter would help fund enforcement of the law.
It is not uncommon for state regulators to fine utility companies for charging ratepayers for lobbying efforts. In 2022, for example, the California Public Utilities Commission SoCalGas fined $10 million for using taxpayer money to vote against local gas bans, federal energy efficiency standards and building electrification policies. But according to Katy Morsony, a staff attorney at the consumer advocacy group The Utility Reform Network, writing those fines and detailed annual reporting will make it much easier to hold utilities accountable.
Morsony also explained that the bills would not prevent utilities from engaging in lobbying — they would simply be forced to fund that advocacy work solely with shareholder money. But as households face rising energy costs, she added that any policy to prevent utilities from illegally extracting more money from consumers would make a tangible difference.
“This is common sense taxpayer protection,” Morsony said. “When you’re in the energy affordability crisis we’re in, every dollar counts.”
