Law in Colorado will prevent utilities from charging customers for lobbying

Utilities across the country use money collected from customers’ monthly bills to fund political campaigns and lobbying efforts, often with the goal of blocking climate progress. But in Colorado, that’s about to change. This week, the state passed the country’s most comprehensive legislation to prevent utilities from using customer funds to support political activities.

Colorado’s new Utility Regulation Act was passed on Monday by the state Senate after clearing the state House two days prior, and is expected to be signed by Governor Jared Polis soon. It prohibits investor-owned utilities from charging their customers — known as ratepayers — for any membership dues in trade associations, lobbying expenses, or any other activities influencing legislation, ballot measures, and other regulatory actions. It also bars utilities from spending ratepayer money on political advertising or any messaging intended to boost the utility’s brand.

“This is the first comprehensive effort by a state to protect utility customers from being forced to fund gas and electric utilities’ political machines,” said David Pomerantz, executive director of the Energy and Policy Institute, a utility watchdog group.

While federal and state regulations already bar utilities from spending ratepayer funds on lobbying, they tend to use a very narrow definition for lobbying and are “riddled with loopholes,” said Pomerantz.

It’s common practice, for example, for investor-owned utilities to funnel money from customers to trade associations like the American Gas Association and the Edison Electric Institute, which are well known for their political lobbying efforts to protect industry interests. One report from the London-based think tank InfluenceMap found that close to half of the 25 largest investor-owned utilities in the U.S. are actively working to delay the energy transition through lobbying, political messaging, or campaign donations, including via trade groups.

Dues collected from millions of utility customers add up to huge political spending budgets: The Edison Electric Institute has an annual budget of over $90 million, and has led national campaigns against rooftop solar and federal climate regulations.

The American Gas Association and the Edison Electric Institute did not respond to Grist’s request for comment in time for publication.

A few other states, including New York and Minnesota, have passed similar laws to address the issue, but none are as comprehensive as Colorado’s. Unlike previous laws, Colorado’s includes an annual reporting requirement to ensure that utilities are complying with the new rules. But the bill stops short of requiring the state’s Public Utilities Commission to impose fines on noncompliant utilities. In response to lobbying from utilities and trade associations, the law was amended to say the commission “may” impose fines — something the commission is already allowed to do. “It’s no real change to the status quo,” said Pomerantz.

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