A recent request by Michigan’s Attorney General Dana Nessel could require utilities to inform regulators about how much they spend on lobbying when requesting rate increases, giving officials and the public more insight into their spending to influence public policies that ultimately affect ratepayers.
Nessel’s request follows a recent report that showed DTE Energy-linked dark money groups funneled more than half a million dollars to Unlock Michigan, a group opposed to Governor Gretchen Whitmer’s COVID lockdowns and restrictions. Industry experts say many utilities opposed restrictions early in the pandemic, partly because of orders that compelled some of them to suspend utility shutoffs for low-income ratepayers temporarily.
Nessel proposed in comments to the Michigan Public Service Commission, which regulates energy and telecommunications utilities, that utility companies like DTE and Consumers report spending to influence legislation, policy and public opinion as well as information on charitable donations and expenses related to the rate cases themselves.
Nessel wants utilities also to provide information on money paid to “affiliates” or dark money groups like Michigan Energy First, which has paid hundreds of thousands of dollars to DTE-backed political candidates and is led by three DTE executives.
“Utilities are government-created monopolies regulated by the state,” Nessel said in a press release. “Accordingly, customers of these monopolies should have the right to know whether and how much their utility is spending to influence legislation or other public policy that impacts the utility and consumers.”
According to watchdog groups, DTE and other utilities use dark money groups to distance themselves from activities to influence policy. Previously, DTE spokesperson Peter Ternes told Planet Detroit that the company “unequivocally” did not donate to Unlock Michigan. “We do not speak” for the dark money group, Ternes said.
However, Matt Kasper, deputy director of the Energy and Policy Institute, a national nonprofit that tracks utilities’ political spending, said that’s a ruse.
“When they say they don’t control [Michigan Energy First] or it’s not part of the company … sure, it’s not part of the utility corporation itself, but they’ve had their top lobbyists running it for eight years,” Kasper said. “Customers see right through it, and regulators and lawmakers do, too.”
Crain’s reports that DTE and Consumers Energy were some of Michigan’s biggest political spenders last year. DTE spent around $235,000 lobbying state officials and Consumers about $219,000.
One example of this spending was a 2018 Republican primary race for a Bay City-area state Senate seat, where dark money groups backed by Consumers and DTE spent more than $1 million to defeat Gary Glenn. Glenn, a tea-party conservative, criticized “monopoly utilities” and wanted to make it easier for homeowners and businesses to invest in renewable energy.
Charitable giving is a political issue as well. In 2017, DTE gave $50,000 to the Detroit Association of Black Organizations run by Rev. Horace Sheffield III, who regularly speaks out in favor of the utility’s policies at public meetings and in the press.
Meanwhile, Detroiters continue to struggle with unreliable power, and Michigan residents pay the highest rates for energy in the Midwest. Adding to the problem in Detroit is a grid generally older than the one that covers most newer suburbs, which the nonprofit We the People Michigan referred to as “utility redlining.”
DTE and Consumers have pushed back against criticism of their political spending by saying these charges are not passed along to customers in rates. But the nonprofit Citizens Utility Board of Michigan and Nessel have requested additional oversight from the Federal Energy Regulatory Commission (FERC), saying that some spending DTE considers “non-political” goes to organizations that advocate for policy positions that benefit the company, like fighting rooftop solar or opposing bans on fossil fuels.
And this may be a good moment to get more transparency from utilities. The MPSC appears to be embracing more openness. For example, the body recently announced it would launch a website to track outages and storm response. And it has required utilities to publicly report shutoffs since 2020, suggesting an interest in demanding more information from these companies, which may translate into offering the transparency Nessel and others seek.