Petitioners Ask Feds to Investigate Utility Abuses of Monopoly Power — Episode 201 of Local Energy Rules

Howard and Liz, welcome to Local Energy Rules.

One is as it relates to decarbonization, which is of course so, so important. I mean, these monopoly companies are heavily invested in fossil fuels. So they, and they make decisions, unfortunately, the nature of our private company system that provides our essentially utility services, they’re acting on behalf of their shareholders, not really in the public interest, even though that’s supposed to be their charter. And so making decisions about how to make investments and how to charge customers, et cetera, they are driven by their bottom lines, which lead them to make decisions that prefer both centralized power and fossil fuels, which is most of the power they provide.

And that sort of brings us back to your question and point about rooftop solar and distributed solar. The basic problem is that our monopoly utility system has these private companies that don’t make money off of the rooftop solar that you generate in your home. And you’re right in saying that when the system was set up, it was not contemplated that customers in their homes wouldn’t be allowed to provide their own electricity anymore, that it was contemplated that they wouldn’t be allowed to put up insulation that might also reduce their reliance on the centralized power system. But now what we’re seeing around the country, and our petition highlights, a whole host of examples is utility companies abusing their monopoly power to continue to control the power system. And one of the forms that that takes of course is efforts to disincentivize and dissuade customers through all sorts of means both kind of legal, although problematic and, and not so legal so that customers are less likely to actually make those investments and are no longer getting the rewards from those investments in rooftop solar that we really think they should. They’re entitled to.

Liz, I was hoping maybe you could talk about as a great example of this tension between utilities kind of abusing their monopoly power and dissuading their customers. Can you talk a little bit about what happened in Florida recently as I think a really powerful example of how this plays out?

And then, you know, in more recent years, there have been attempts to push back net energy metering or net metering for solar, which provides solar owners or people who lease solar a fair credit for the solar energy that they put back on the grid and share with their neighbors. And there was a huge fight this year that we were very involved in in Florida. Starting with legislation that was introduced last November. It was written by FPL and the State Senator and the State Representative who introduced the bills both got large contributions from FPL right around the time that they introduced the legislation. So it really was bought and paid for and written by FPL and legislators we heard were given basically a mandate to pass it. And I guess to sort of summarize what happened, it passed both the House and the Senate, and then was vetoed by governor DeSantis, who vetoed it saying that he was standing up for consumers and trying to help fight inflation because the legislation basically gave FPL a blank check to add fees to solar customers.

And that came on top of a recent rate increase and minimum bill, which means that consumer, you know, rate payers instead of paying $10 a month or $5 a month fee plus whatever they use, they can’t lower their bill with energy efficiency or with solar below 25 or $30 a month. But people in Florida were upset. And I think that’s some, you know, part about the new rates, the higher rates and the minimum bills, and that sort of helped build discontent against that proposal. And, you know, we put up a huge, huge fight. Solar United Neighbors and many of our allies and partners in Florida and the solar industry in Florida, dozens of people spoke hearings, you know, who were probably at their jobs that we talked about, the $18 billion a year impact of the solar industry in Florida and 40,000 jobs that it supports in addition to helping provide, you know, more resiliency and local power, particularly when partnered with storage. The coalition drove thousands comments to legislators, but overall the legislature, the legislators, you know, some people stood up against it, but you know, they are, many of them are bought and paid for by FPL. And so the most we could get was some slight tweaks to the bill to make it a little bit less bad. And so instead of like immediately ending net metering, it got pushed back and then there was a bit of a glide path, but that’s, that was the best we could get through the legislature, but it was, was vetoed by the governor and he stood up, you know, for rate payers. Stood up to FPL and I think that was a really big victory to see governor DeSantis do that.

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One is the anti-competitive practices of the utilities that are principally directed at market competition from, as we’ve talked about earlier, non-centralized power generators, right? We’ve solar companies, community solar projects, home solar, you know, individuals and homes who wanna install solar businesses who wanna install solar. There are a host of actions, some of which have been approved by commissions again, over which the companies have a lot of influence and some of which have nothing to do with the commissions. Like for example, taking an exceedingly long time to connect rooftop solar, or community solar project to the grid, all of which, you know, we want the commission to look into and ask questions about and explore those anti-competitive practices.

Then the other side is the, which ties in more to the kinds of examples Liz has been talking about, are sort of the deceptive acts that we think should be investigated. Some of them are not technically illegal, but they’re certainly problematic, especially coming from these companies that have this monopoly power, which is supposed to be an exchange for acting in the public interest. But the reality is that the way the system is set up, the companies have, you know, the amounts that they charge rate payers for electricity, et cetera, but they also have their profit that they’re entitled to get for the things that they build, which is part of the problem. Of course, cuz they constantly wanna build more things and those profits they can spend however they want. So if they wanna spend that those profits on electioneering, et cetera, they’re free to do that, but it becomes very problematic when they’re spending it in the kinds of ways Liz gave examples of and other ways that are really, you know, undermine the overall democratic process, you know, events, this kind of abusive power that we really want the FTC to look into.

Another one going back to the inherent in your question is the legislative possibility. It may be that there are legislative improvements that can be made, not necessarily a return to PUCA, but maybe other proposals that the FTC could help develop over time. And maybe they would seek also seek some stakeholder input about that. And then, you know, another area in this we haven’t really touched on, this is one of the kind of issues or problems that that’s baked into all this is as part of these monopoly utilities, having this agreement with the states that allows them monopoly control over service territories. They therefore in general are often immune from antitrust laws. And a lot of the kinds of concerns that we’re raising really sound in antitrust, particularly as it relates to anti-competitive actions against rooftop solar, et cetera, there are some efforts being made. There’s a case pending right now against the Salt River Project, which I think you may have talked about in an earlier podcast, that’s addressing that state action immunity defense, but they’re kind of a unique quasi-public quasi private entity, the SRP, but there may also be legislative reforms that would help open up the utilities to more accountability from an antitrust standpoint. And that would potentially allow both government enforcers, but also frankly, private parties, including the, the companies and individuals who are being harmed by the utilities anti-competitive practices to actually hold them accountable under antitrust law. Uh, so that’s another one of the reforms that we sort of have suggested that the FTC might explore once it’s collected information.

And it is true that in general, under the current state of the law, there is a lot more latitude for how companies lawfully spend their profits than how they spend rate payer money. But again, and there are examples of this in the petition, including in the First Energy context, Energy and Policy Institute has helped to uncover that not only was First Energy involved in illegal activities, they were using rate payer money for that. So it is kind of adding insult to injury. And that absolutely is not allowed, not just for illegal activities, but for the kind of lobbying activities that as Liz said, most state laws and at the federal level, the federal energy regulatory commission generally prohibit utilities from charging rate payers for their lobbying.

But there’s another, a third layer to that, which is what constitutes lobbying. And on that, we actually have a, a separate petition that’s pending before the Federal Energy Regulatory Commission (FERC) having to do with the way in which currently utilities routinely charge rate payers for their membership dues and trade associations, like the Edison Electric Institute and the American Gas Association who then used that money for all kinds of regulatory advocacy. Now this isn’t going to a legislator and trying to convince him to, you know, classic lobbying. This is participating in regulatory proceedings, right? Writing comments, opposing, you know, greenhouse gas regulations, et cetera, or then litigating in court against those protections. I mean, these are things that cost, you know, regulations, right? Those things cost utilities money. They don’t generally support them. And they use for the current system, they’re often using rate payer money. So you might be quite surprised to know that you, when you pay your electricity bill, part of that money is actually being used to file a lawsuit against a regulation. That EPA is for that to actually protect your clean air and clean water. But that’s the way the system currently works. And we’re trying to reign that in before FERC with a new accounting system that would make it much more difficult for rate payers to be charged for that kind of advocacy.