When households in the United States pay their gas and electric bills, they are not just paying for energy, but also the infrastructure it takes to deliver that energy to their homes. However, these monthly payments could also be funding utilities’ efforts to lobby against climate policies. Federal law prohibits utilities from passing lobbying expenses on to customers, but these rules are often not enforced strongly enough. This has led several states, including California and Maryland, to introduce bills that would prohibit utilities from charging customers for lobbying, advertising, trade association dues, and other political activities. Last year, Colorado, Connecticut, and Maine were the first states to pass laws preventing utilities from passing on lobbying costs to ratepayers.
There have been instances where utilities have used ratepayer money for lobbying campaigns against climate policies. For example, the Ohio utility company FirstEnergy admitted to wire fraud for using ratepayer dollars to bribe a lawmaker to pass legislation benefiting the company’s interests. Similarly, the gas utility SoCalGas in California charged ratepayers millions to fund lobbying efforts against building electrification policies.
Many of the bills introduced this year define lobbying broadly as any activity meant to influence political outcomes. This includes advertising and trade association dues paid by utilities. States like Maryland, Ohio, Utah, and Arizona are considering bills that would require utilities to report all lobbying and advertising costs. California’s bill goes further by imposing fines on utilities that fail to comply with the rules and allocating those funds to help low-income households transition to electric appliances.
Consumer advocates believe that making utilities accountable for their lobbying expenses will help protect ratepayers from unjust costs. These bills aim to ensure that utilities fund their advocacy work solely using money from shareholders, not customers. In a time when energy costs are rising, these protections are crucial for ensuring affordability for households.
