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

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.”

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.