New York State Climate and Environment

New Bill Would Block Utilities From Lobbying at Customers’ Expense

The legislation follows New York Focus reporting that showed a major gas utility may have been siphoning off customers’ bills to fund an anti-electrification campaign.

Colin Kinniburgh · July 24, 2023

Assemblymember Michaelle Solages at a rally in Albany's State Capitol for the Build Public Renewables Act, with other supporters behind her.

Assemblymember Michaelle Solages at a rally in the State Capitol for the Build Public Renewables Act, March 23, 2023. | Courtesy of Sane Energy Project

Staying Focused

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Is your electric or gas company using your money to advance its political agenda?

It’s a question utilities have increasingly faced as energy bills have gone up and evidence has mounted that the companies have used those bills to pay for lobbying. And lawmakers have responded: In just the last two months, Colorado, Connecticut, and Maine have all passed legislation that would ban the practice.

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Now it looks like New York could join them. A bill introduced Wednesday by Assemblymember Michaelle Solages of Nassau County would bar utilities from conducting political activity at their customers’ expense. That includes donating to candidates, funding trade associations, or lobbying — including what’s known as “grassroots” lobbying, when organizations enlist the wider public to press their cause to lawmakers.

“We need to ensure that utilities are using their funds solely to provide utilities — whether it’s gas, electric, or water — to the consumer, and nothing else,” Solages said. Given “the high prices of utilities, coupled with the climate crisis that we’re going to, we really need to ensure that we’re protecting the ratepayers.”

The bill comes after New York Focus revealed extensive lobbying efforts against electrification mandates by the gas utility National Fuel. The company robocalled its western New York customers in February, warning that a gas ban “could lead to power outages and cost increases” and patching them through to state lawmakers. And it used a ratepayer-funded website — officially intended to promote energy efficiency upgrades — to spread a similar message.

National Fuel has consistently denied that it has used customer funds to lobby, saying that shareholders were the ones who footed the bill. New York Focus’s reporting prompted the New York Public Service Commission to open an investigation into the matter in early March. But more than four months later, regulators have reported no progress.

The agency “continues to review the matter and, at this time, has no additional public information to share,” spokesperson James Denn said on Monday.

Watchdogs say utilities deserve greater scrutiny. Itai Vardi, research and communications manager at the utility watchdog group the Energy and Policy Institute, called Solages’s bill an important step.

“As captive consumers, ratepayers shouldn’t fund political machines — certainly not lobbying efforts that go against ratepayers’ interests,” he said.

Utilities are unique in that they are generally private, for-profit companies but are granted a legal monopoly to serve electricity, gas, or water in a given area. If someone moves into that area, they have little choice over who to buy their power from. In exchange for this monopoly, investor-owned utilities get an entire branch of state government — known as a public utility commission — devoted to regulating them.

Many states, including New York, already restrict utilities from using customer funds to lobby. New York public service law bars electric or gas companies from using ratepayer funds for “legislative lobbying,” and that prohibition was expanded in 2021 to include dues for trade associations. But critics say the law still contains loopholes: It doesn’t include lobbying on regulations by state agencies, for example, and there’s some ambiguity as to whether it covers “grassroots” lobbying like the robocall campaign.

“In our experience, if you don’t close the loopholes, then the utilities will exploit them,” Vardi said.

Solages’s bill explicitly bars grassroots lobbying and — like those passed in Colorado, Connecticut, and Maine — would require major utilities to submit annual reports to regulators on their political spending. It does not address lobbying around state regulations. Nor does it create any new penalties for companies that break the law, but Solages said state law already has provisions in place to fine utilities found guilty of wrongdoing.

New York Focus reached out to six of New York’s major electric and gas utilities for comment on the legislation, but they did not immediately respond.

The prospects of Solages’s bill remain uncertain. It does not yet have any cosponsors in the Assembly, and she said she is still seeking a lead sponsor to introduce a matching bill in the Senate.

“It’s in the infancy stages,” she said. But, given how the building electrification fight unfolded this spring, “I’m sure people are going to galvanize around this.”