Study Says FPL Charges Customers Millions in Lobbying Fees Every Year UPDATED
Florida Power & Light
Update: After this story was published, Florida Power & Light disputed the entire Energy and Policy Institute report as factually inaccurate. The EPI says it stands by its report.
Florida Power & Light, the
Here's the worst part: FPL charges its own customers to pay for those lobbying groups who are working against the customers' interests, and state regulators have let the monopoly get away with it. According to a new report released Tuesday by the nonprofit Energy and Policy Institute (EPI), the Florida Public Service Commission — the group that's supposed to regulate FPL — let the company recoup $9.5 million in lobbying fees from consumers from 2015 to 2018, despite the fact that those rate hikes did not meet the PSC's own transparency standards.
"Regulatory oversight of requests by utilities to recover (lobbying) dues from ratepayers has lapsed in many states," the report says.
Peter Robbins, a spokesperson for FPL, did not dispute the report Wednesday night, before this story was published. Instead, he criticized the nonprofit that produced it for refusing to disclose its own list of donors to the Palm Beach Post for a prior story. He called the group "secretive" and said it was "ironic" that the organization is criticizing energy utilities without revealing its own backers. (The EPI's mission statement says the group is dedicated to advocating for clean sources of energy. Most of FPL's energy comes from carbon-emitting fuel sources.)
"Costs related to industry associations have been included in utility rates in Florida and across the country for many decades because they are recognized as important to a utility’s operations," Robbins said via email. "In fact, in our most recent base rate proceeding, none of the customer advocacy groups identified these costs as issues that needed to be addressed." (See FPL's full statement below.)
At issue is what constitutes "lobbying" or "government influence" — while FPL and the PSC say none of the dues utilities pay are allowed to be spent on formal lobbyists, the newly released report makes a case that the money FPL spends on the Edison institute still goes toward political work, like setting up meetings or conventions where utility regulators and corporate executives can mingle. Likewise, the report says FPL's requests to recover trade-industry dues from consumers have gotten less transparent over the years, making it more difficult to track where that money is being spent.
In 2015, FPL’s vice president of environmental services Randy LaBauve testified that fees to similar trade-industry groups are not going to lobbying — but are instead going toward government "advocacy."
"The Florida Public Service Commission follows laws established in Florida Statutes when evaluating and reviewing all utility filings for a rate case," Florida PSC spokesperson Cindy Muir said via email. "Utilities are not allowed to recover expenses for lobbying, and the PSC ensures this law is followed. Expenses for association memberships are recoverable if they are deemed to be of benefit to the customers, such as industry education and research."
She added that every rate-request is "thoroughly reviewed" for compliance with the law.
But the study claims that consumers "should not be paying for" dues to the Edison Institute trade group, among other organizations.
A separate study released in March showed that NextEra receives so many tax breaks that the company did not pay a dime in federal income taxes from 2008 to 2015, and instead received $313 million back from the government. In that time period, NextEra made $21 billion in profit.
The report says that across the country, energy companies are increasingly leaning on state regulators to set up sweetheart deals that let electricity firms charge government lobbying costs to ratepayers. To the customer, those fee increases function like added taxes, since, in most cases, there is often only one electricity or natural gas company in town.
In turn, those lobbyists have usually advocated against a whole host of things the public generally says it wants, like better clean-air regulations, cheaper home solar panels, or rules that prevent companies from dumping waste into rivers and streams.
FPL, for example, is one of the state's four "investor-owned electricity utilities," which function as monopolies in their coverage zones. The PSC is supposed to approve any and all rate hikes from the four companies, but the regulators seem to have stopped caring about how much lobbying money the utilities
The Energy and Policy Institute places much of the blame on a national group that's supposed to regulate state public service commissions — the National Association of Regulatory Utility Commissioners (NARUC). From The 1980s through the 2000s, NARUC conducted regular audits on how the industry's trade group used money from utility customers. In the '80s, NARUC criticized the way the Edison trade group was spending its money, and, as a result, FPL's regulatory body decreased the amount of trade organization lobbying money the company was allowed to recoup from Florida residents. In 1984, the PSC ruled FPL could only charge customers two-thirds of its EEI dues, down from 98 percent in the years prior.
But NARUC, the nationwide group, has since stopped doing those all-important audits. And now, the amount of lobbying money utilities charge back to customers keeps creeping higher, as rate requests to states have gotten less transparent. The Florida PSC says FPL needs to provide rate-hike requests that "adequately segregate" the money the company spends on its trade group lobbying, compared to the other dues the company pays that organization.
But the study released this week maintains that the PSC approved FPL's $9.5 million trade-group-recovery measure, despite the fact that the company's requests weren't remotely "segregated" or transparent enough, and didn't lay out what money was going toward lobbyists.
"The utility’s request to include its EEI dues went unchallenged despite a lack of transparency or segregation, and its request was approved," the study says.
The report also says FPL documents show the company has charged customers $63,000 to pay dues to the U.S. Chamber of Commerce, as well as $157,000 to the Chamber's Institute for 21st Century Energy in operating expenses.
"The Chamber, which has also received EEI money, has been a leading voice against the EPA’s Clean Power Plan and greenhouse gas emission regulations, ozone and fine particle regulations, vehicle emission standards, and rooftop solar policies," the EPI's study
Here is FPL's full response to the claims in the EPI report:
This group has been pitching its "research" to reporters for months. (See September blog post by the Palm Beach Post.) I find it ironic that a secretive group that refuses to disclose who is paying them is criticizing organizations that provide extensive financial information publicly.
As one of the largest energy providers in the U.S., serving nearly 4.9 million customers, FPL has long participated in a number of industry organizations that provide a wide variety of important information and services to help us better serve customers — such as research on new technologies and analyses of best practices. Costs related to industry associations have been included in utility rates in Florida and across the country for many decades because they are recognized as important to a utility’s operations. In fact, in our most recent base rate proceeding, none of the customer advocacy groups identified these costs as issues that needed to be addressed.
Update: Here's FPL's response to the article:
· FPL customers do not pay for any lobbying whatsoever.
· FPL and NextEra Energy – at shareholder expense – have lobbied in favor of the Clean Power Plan.
· FPL is approximately 30% cleaner in terms of CO2 than the national average. Since 2001, FPL's investments in high-efficiency natural gas generation alone have enabled the company to cut its use of foreign oil by more than 98 percent.
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