Are Your Gas Bills Paying for the Campaign Against Banning Gas?

National Fuel customers paid for a website directing New Yorkers to oppose electrification mandates, documents show.

Colin Kinniburgh   ·   May 17, 2023
Photo of a shocked woman with paperwork
A brochure sent to National Fuel customers directs them to a website urging them to defend natural gas against electrification plans. | Illustration: Maia Hibbett

National Fuel has an ominous warning for its customers: Governor Kathy Hochul is proposing “drastic measures” to phase out natural gas, driving up energy bills and threatening the reliability of the grid. “The time to speak up is now,” the utility urges.

It’s a familiar message coming from the gas-only utility. The twist? The website where it appears, targeted at National Fuel customers in western New York, was funded directly by the utility’s own customers — to the tune of hundreds of thousands of dollars.

State law bars utilities from recovering lobbying expenses through rates. Unlike other businesses, utilities are monopoly providers: If you live in a certain area, you generally don’t have a choice who supplies your gas or electricity, and the companies face tight regulation in exchange for this privilege.

But certain activities can slip through the cracks of those regulations — and critics say utilities are exploiting their monopoly power to lobby against the interests of the people they serve.

Spokesperson Karen Merkel denied that National Fuel used customer funds to lobby. “As a utility, we believe we are obligated to discuss energy issues,” she said. “We are dutybound to educate our customers on major energy developments that impact their bills, and certainly on developments that might impact energy choice in the future.”

National Fuel directs customers to the “Fueling Tomorrow Today” website through brochures sent out with monthly gas bills, among other means. The section on New York’s climate law is only one part of the site, which mostly offers tips on how to conserve energy and take advantage of incentive programs.

A button on the site sends users to a pre-written email telling their state representatives that “the push to limit or ban natural gas is incredibly irresponsible” and that “I worry about public safety during the next major winter storm, and whether my neighbors and I will be able to stay warm if the electricity goes out.”

According to filings with New York’s Public Service Commission, National Fuel spent $100,000 on the website and associated digital media during its 2022 fiscal year. It plans to spend just over that amount — $110,000 — this year. The funding comes from an energy efficiency program, the Conservation Incentive Program, that is paid for through a line on customers’ bills.

Merkel said that the page directing users to lobbying materials was “not paid for by utility customers.” It was National Fuel’s shareholders who picked up the tab, she said. She acknowledged that the utility keeps an advertising firm, the Martin Group, on retainer to update its website and create associated promotional materials.

Itai Vardi, research and communications manager at the utility watchdog group the Energy and Policy Institute, said National Fuel’s claim that the individual lobbying page on its site was not funded by customers amounted to “splitting hairs.”

The utility’s disclosures show that the cost of making the site was “recovered wholesale from ratepayers,” he said. “For the utility here to claim that this web page alone was exempt … is not reasonable.”

Utility rates are set in months-long state-run proceedings, which operate much like court cases. Companies are restricted in how they can spend the money they earn from customers, or “ratepayers,” as a result of those proceedings.

National Fuel is “using a website that they designed originally to serve as a place where customers can get helpful tips about energy efficiency … and within that website, they’re inserting a call to action against important climate legislation,” Vardi said. “That’s a pretty bold strategy.”

Looking at the website, Assemblymember Monica Wallace — whose office was flooded by National Fuel-prompted robocalls in February — said it seemed “totally inappropriate.”

“It would appear to be a violation of both the spirit and the letter of the law,” Wallace told New York Focus. “I would urge the Public Service Commission to investigate that further and hold them accountable if that is in fact the case.”

The Public Service Commission is already investigating whether National Fuel has illegally used customer funds to lobby, spurred by New York Focus’s reporting on the company’s robocalls to customers in early March. PSC spokesperson James Denn could not provide a date when the investigation is expected to conclude, but said that “if the website is in violation of those regulations, the Department will seek appropriate financial penalties or appropriate remedies.”

Merkel said the campaign has generated more than 16,600 emails to Hochul and western New York elected officials, and Buffalo-based Senator Sean Ryan said he has seen the effects first hand.

“Campaigns opposing building electrification in New York have created a lot of unnecessary confusion and consternation about the state’s plans to move toward a more sustainable future,” he said. “My office has received hundreds of form emails and fielded dozens of phone calls from people mobilized by National Fuel’s campaign.”

New York state regulators opened an investigation into National Fuel lobbying in March, spurred by New York Focus’s reporting.

No other major New York utility has used customer funds to oppose electrification so directly, according to filings reviewed by the Energy and Policy Institute. New York’s largest gas utility, National Grid, reported last year that it has sworn off promoting natural gas expansion.

One small gas utility, Corning Natural Gas — which serves about 15,000 customers in New York’s Southern Tier — has created a grassroots lobbying page similar to National Fuel’s. It includes the same campaign slogan, links back to the Fueling Tomorrow Today site, and offers a detailed form letter to lawmakers opposing fossil fuel bans.

Corning’s site, Don’t Fool With My Fuel, only came online this spring, and the company’s latest outreach report to the PSC doesn’t include any details on how it was funded. Corporate secretary Julie Lewis told New York Focus that the company is “tracking all costs for the campaign” and allocating them “below the line, not to our customers.”

Propane Parallels

Utility activities are well documented because, as monopoly providers, they are closely regulated by the PSC. But other fossil fuel companies have also put customers’ money to legally questionable ends — most notably, the propane industry.

Under a 1996 federal law, an industry group called the Propane Education and Research Council is allowed to collect a half-cent fee on every gallon of propane sold, ostensibly to promote gas safety and research cleaner-burning fuels. But critics say PERC has abused this “checkoff program,” using its roughly $40 million budget to market propane and fight electrification.

The group funneled $615,000 to its New York affiliate last year, to help cover the costs of a spirited campaign in defense of gas. According to a February 2022 budget, the bulk of that funding went toward digital ads, while $55,000 went toward a leaflet that local propane suppliers send out with customers’ bills.

“Historically high energy costs in Europe, blackouts in Texas and California — that could all happen here,” warned one edition of the leaflet last year. Another, this January, railed against New York’s “extreme and unrealistic” climate plans, which could spell “potentially catastrophic changes” to the state’s electric grid. It included a call to action, encouraging customers to contact state lawmakers and pointing them toward a campaign website with the necessary tools.

The communications consultant behind that website wrote in an industry publication that the Propane Matters leaflet has “has been funded with state PERC dollars for years.”

Bill Overbaugh, director of the New York Propane Gas Association, confirmed that the group had used PERC funding to solicit comments on the climate plan. But he said they were directed only at the Climate Action Council, an advisory group, and therefore didn’t amount to legislative lobbying — which is specifically barred by federal law. Any messaging addressed to lawmakers was paid for separately, with funds raised by the gas association’s members, he said.

The January edition of the group’s leaflet specifically encourages customers to contact Hochul and state legislators. Overbaugh said PERC helped pay for the leaflet, but that the front page — which includes the call to action — was funded only by the New York propane association.

Erin Hatcher, PERC’s head of communications, said the group had not directly funded the campaign against gas bans in New York or paid for Propane Matters. PERC, a national group, funds its New York affiliate, which in turn partners with the New York Propane Gas Association on materials like the newsletter, Hatcher explained in an email sent after this story was first published.

Following an exchange with Hatcher, New York Focus also received a message from Overbaugh, saying that his previous comments were based on a misunderstanding and that his group does not plan to use “any of our PERC dollars” for Propane Matters this year.

Some states have stepped up their scrutiny of energy suppliers. Colorado recently passed a law requiring utilities to report annually on lobbying activity — including around rulemaking — to ensure that customers aren’t the ones footing the bill. That goes a few steps further than the laws currently in place in New York.

Charlie Spatz, a researcher at the Energy and Policy Institute, said it matters who pays for lobbying. Any funding from shareholders cuts into their profits, so they tend to be cautious in how they spend it.

“When it is ratepayer funding, it’s essentially like a free credit card,” Spatz said.

Update, May 18: This story has been updated to include comments sent after publication from the Propane Education and Research Council and the New York Propane Gas Association.

Colin Kinniburgh is a reporter at New York Focus, covering the state’s climate and environmental politics. Over a decade in media, he has worked in print, television, audio, and online news, and participated in fellowship programs at CUNY’s Graduate School of Journalism and… more
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