Sometimes it is hard to understand how a convicted criminal like PG&E continues to get their way with California lawmakers. How the utilities get away with rate hike after rate hike. Sneaking hidden taxes into legislation in the middle of the night. Landing body blow after body blow on the state’s most popular clean energy solution—rooftop solar.
The answer is pretty simple. The utilities and their top allies are rich with cash (your cash) and they spend generously on politicians and opinion leaders to get their way.
The utility industry gave $111 million to California politicians at every level of government since 2017
Between 2017 and 2022 alone, the utility industry in California made more than $111 million in campaign contributions to political candidates at every level of government..
Of the sum contributed during this period, $20 million went to current sitting members of the Legislature, and $4.5 million went to Governor Newsom.
The utilities’ political strategy: Get ’em while they’re young
The utilities’ political giving extends down to city council candidates, which is odd considering those offices don’t have much power over state electricity policy. “Get ’em while they’re young” appears to be the strategy. It’s smart: by generously contributing to candidates in the early stages of their career, the utilities increase the chances of loyalty if they end up as a state legislator or Governor.
The utilities spend additional millions to lobby your elected officials and regulators once they are in office
The utilities’ campaign contributions are just the beginning. They also have massive teams of lobbyists and paid consultants that can swarm decision-makers and exert enormous political pressure. They also pay for advertising, front groups, and junkets to wine and dine elected officials.
To give you just a snapshot, we looked at how much the utilities spent on lobbying during the fight over net metering. During that 21 month period alone, the utilities spent $12.5 million in lobbying.
The utilities also make payments to California nonprofits and academics
Even with so much campaign cash sloshing around, some politicians want to avoid the appearance of cozying up to the utilities. So the utilities also make generous payments to community organizations, who then later support the utilities’ political agenda. Politicians then say they are siding with those same community groups, which gives those politicians “cover” to side with the utilities.
Here are some examples:
- Between 2018 and 2020, the utilities gave $223,500 to a leading academic voice against rooftop solar.
- In 2020 alone, the utilities paid $1.67 million to nonprofit organizations to support the utilities’ agenda to gut rooftop solar.
- Between 2020 and 2022, the utilities paid $3.1 million to the nonprofit organizations that signed their letter supporting a Big Utility Tax. This includes many groups whose constituents would be harmed by the Utility Tax, such as Peralta Community College. The college’s teachers’ union was so outraged that they sent a letter to the Legislature exposing the hypocrisy.
They also buy influence through utility trade associations, friendly consulting firms, and the revolving door
The utilities also exert their influence through the activities of their well-funded trade associations. Here are some examples:
SDG&E’s influence in San Diego
A well-known pro-utility voice, Dr. David Victor at UCSD, sits on the Advisory Council of the utility industry’s national research association, Electric Power Research Institute (EPRI). SDG&E contributed almost $850,000 to EPRI in 2021. In that same year, EPRI pledged $900,000 to the UCSD institute that Prof. Victor runs, with the pledge specifically stating the money is to be controlled by Dr. Victor. A good example of Dr. Victor’s work is SDG&E’s 2022 decarbonization plan, which calls for more solar farms and power lines without regard for less expensive alternatives. This is typically the utilities’ preferred approach, since they get a guaranteed 8-12% profit off every dollar of new infrastructure spending.
The “cost shift” fallacy was invented by the utilities’ trade association in 2012
Many lawmakers repeat the utility claim that rooftop solar is responsible for rising utility bills. They may not know that the utilities’ other national trade association, the Edison Electric Institute, carefully crafted this argument in 2012.
A utility consulting firm did the CPUC’s cost benefit analysis on rooftop solar
E3 is one of the state’s go-to consulting firms for in-depth energy analysis. Yet, their client list includes most major North American utilities, including the ones in California. This is an obvious conflict of interest. Unsurprisingly, E3’s cost / benefit analysis of rooftop solar aligned with the utilities’ “cost shift” claim. This gave the CPUC and lawmakers the cover to send rooftop solar off a cliff in 2022.
PG&E’s top lobbyist was recently a CPUC commissioner
No joke, here is her biography. This practice goes back decades. In fact, the co-founder of environmental group NRDC later served on the CPUC from 1979-1982, and then jumped to Edison International and SoCal Edison in 1984.
The utilities’ influence over our government and society is breathtaking
It’s already eye-popping that the utilities gave $111 million in direct campaign contributions to California politicians over just six years. But their influence is breathtaking when we include their lobbying, payments to NGOs and academics, and the shadowy work of their trade associations.
Some state lawmakers are pushing back, sponsoring bills to block utilities from spending ratepayer funds on political activities (SB 938), and banning CPUC commissioners from working for the entities they regulate for ten years after they leave the commission (AB 2054).
The Legislature should pass these bills, of course, and do a whole lot more. But most important is for voters to ask prospective lawmakers, academics, and NGOs if they take money from the utility industry. See how much money the utilities donated to your state legislator