Report details utilities’ use of charitable giving to influence politics

By David Pomerantz, Energy and Policy Institute

In a first-of-its-kind analysis, the Energy and Policy Institute has examined the charitable contributions of 10 leading investor-owned electric utilities in the U.S. We found that all of these major utilities use their charitable giving to manipulate politics, policies and regulation in ways designed to increase shareholder profits, often at the expense of low-income communities whose communities are more likely to bear the brunt of climate impacts and suffer higher levels of air pollution.

Read the report: 

Strings Attached: How utilities use charitable giving to influence politics and increase investor profits

From 2013 to 2017, EPI estimates that the 10 utilities that we assessed – Ameren, American Electric Power, Arizona Public Service, Dominion Energy, DTE Energy, Duke Energy, Entergy, FirstEnergy, NextEra Energy, and Southern Company – gave approximately $1 billion to charitable organizations.

That number, for just 10 companies, is 13 times greater than the $78 million that the entire utility sector – including political action committees and individual employees – contributed to federal elections in the 2014, 2016, and 2018 cycle, according to the Center for Responsive Politics’ database.

Clearly, not all of the utilities’ charitable spending is directly political. Utilities’ charitable arms often collect some of their revenue from utility employees, the vast majority of whom are likely acting in good faith to support community-based organizations.

The data and case studies in this report prove, however, that much of the utilities’ charitable activity is geared explicitly to influence politics. If even if a small portion of the $1 billion that only these 10 utilities gave to charity was politically motivated – a proposition which seems likely based on the case studies documented here – then utilities’ influence-seeking via charity would be at least as large, if not much larger than, their other forms of political spending such as traditional campaign contributions.

Utilities Use Charities to Extort Support from Low-Income Communities and Communities of Color

One theme across EPI’s analysis is that utilities frequently use charitable giving to gain support from organizations that represent low-income communities and communities of color.

Michigan utility DTE Energy provides multiple examples of the practice.

DTE submitted a rate increase proposal in 2018 that included a proposal to change its compensation program for rooftop solar customers. DTE’s proposal would have not only significantly reduced the rate at which a customer would be compensated for the electricity their solar panels send back to the grid, but also would have added a fee on customers who install rooftop solar.

Michigan Public Service Commissioner Sally Talberg said the thousands of comments urging the PSC to reject DTE’s proposed fee and reduced rate for solar compensation were “unprecedented” during her time at the agency.

In response, the utility mobilized non-profit organizations to create the perception of public support for the anti-rooftop solar proposals, particularly from organizations representing communities of color.

Midwest Energy News reported that a group called Michigan Energy Promise emerged in January 2019 to back DTE Energy’s position on net metering and other issues before the PSC.

On February 26, Bishop W.L. Starghill, Jr, a member of the new group and the Michigan Democratic Black Caucus, authored an opinion piece in Bridge Magazine attacking the solar industry using various utility industry talking points.

The allies listed on Michigan Energy Promise’s website were mostly churches, chambers of commerce, and nonprofits that advocate for communities of color. Many of the groups had either received thousands of dollars from the DTE Energy Foundation over the past five years, list the utility as a corporate sponsor on organization websites, or include a utility employee as a member of the board.

Later in 2019, dozens of people gathered in a community room at the Wayne County Community College downtown campus for over four hours. Nearly everyone in the room was there to voice their displeasure with their electric utility company, DTE Energy, and its recently filed Integrated Resource Plan, which was weighted toward fracked gas and away from renewable energy.

Of the 50 individuals who provided public comments, only nine voiced support for DTE Energy. Almost every DTE supporter was in some way connected to the company, including five speakers who represented charities or churches that collectively had received at least $578,500 from the DTE Energy Foundation since 2013. Most of those charitable organizations represented communities of color.

Particularly in recent years, diverse voices that represent communities of color have fought back against utility manipulation or co-option of this type. In Michigan, Jeremy Orr, the state chairperson of environmental and climate justice for the Michigan State Conference of the NAACP, rejected DTE’s argument that rooftop solar power harmed low-income customers. “Clean energy isn’t just an environmental issue: It’s a civil rights issue,” Orr wrote in an op-ed. “Instead of keeping power in the hands of billion-dollar utilities, we envision a future where everyone can participate in and benefit from the clean energy economy — and the potential is huge.”

Indeed, while utilities have tried to influence some state chapters of the NAACP with donations, the national NAACP has argued aggressively against utility co-option. The NAACP released a report in 2019, “Fossil Fueled Foolery” which denounced attempts by utilities and other fossil fuel companies to “pacify or co-opt community leaders and organizations and misrepresent the interests and opinions of communities.”

“Over the years, the companies will regularly support local groups financially, have officials attend meetings and sometimes gain seniority in the membership of local groups, and even invite representatives of influential groups to serve on their boards of directors. All this relationship building results in a false sense of common cause and affinity. This is the approach most commonly used with NAACP units,” the NAACP wrote. The organization added that “energy companies that use fossil fuels are always harmful to consumers, as their business model is rooted in keeping their customers dependent on them, limiting consumer choice, preserving their monopoly, and maximizing profit at the expense of the sustainability of our environment and the health and well-being of our families and communities.”

Utilities’ efforts to co-opt or manipulate communities of color are particularly egregious given many of the companies’ track record of pushing for regressive rate structures that hurt low-income customers the worst, and of environmental injustice, including the siting of polluting power plants and waste facilities in poor communities and communities of color.

Many of the civil-society and non-profit organizations described in this report as receiving money from utilities do crucial work in fields such as affordable housing, community development, racial justice, civil rights, or healthcare. Community organizations tend to operate on small budgets and are not in a position to antagonize potential large donors. They also often have limited experience with energy issues. If a utility’s charitable arm calls and asks them to sign onto a letter or testify at a hearing about the utility’s positive role in the community, they may not have much of a choice but to say yes.

The utilities manipulating community groups, however, have no such excuses for their actions. These companies spend millions of dollars, earned from captive customers, to prosecute their political arguments, and have the resources to employ fleets of lobbyists and lawyers to represent them at public utility commissions and state legislatures.

More information, including details on the report’s methodology, is here:

Strings Attached: How utilities use charitable giving to influence politics and increase investor profits