Petitioners Ask Feds to Investigate Utility Abuses of Monopoly Power — Episode 158 of Local Energy Rules

Date: 9 Jun 2022 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

Monopoly energy utilities have accrued vast service territories and extraordinary financial power — which they have used to purchase political power. At this point, state regulatory and legislative bodies can only do so much to rein them in.

For this episode of the Local Energy Rules Podcast, host John Farrell speaks with Howard Crystal and Liz Veazey. Crystal, Legal Director of the Energy Justice Program at the Center for Biological Diversity, and Veazey, Policy and Rural Energy Director at Solar United Neighbors, were two cosigners on a recent petition to the Federal Trade Commission. The Institute for Local Self-Reliance also signed the petition. Crystal and Veazey explain the petition and why electric utility practices require federal investigation.

Listen to the full episode and explore more resources below — including a transcript and summary of the conversation.

Howard Crystal: 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. Then 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
John Farrell: Nearly 100 years ago, the Federal Trade Commission performed a multi-year investigation of monopoly investor utility companies. Their findings of rampant anti-competitive and fraudulent behavior led to federal legislation to reign in the utilities. Just a few weeks ago, a quartet of organizations, including the Institute for Local Self-Reliance submitted a petition to the commission asking them to once again use their investigatory powers to look into utility abuses. Howard Crystal, Legal Director of the Energy Justice Program at the Center for Biological Diversity and Liz Veazey, Policy and Rural Energy Director at Solar United Neighbors joined me in June, 2022 to explain why the level of utility abuse requires a federal investigation and what potential remedies could come from the Federal Trade Commission’s scrutiny. I’m John Farrell, Director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a biweekly podcast sharing powerful stories about local, renewable energy. Howard and Liz, welcome to Local Energy Rules.
Howard Crystal: Happy to be here.
Liz Veazey: Yeah. Thanks for having us.
John Farrell: Yeah. I’m so glad to have you both. I’d love to start this off by asking a little bit about, you know, why should we care about this petition? What is at stake? And I tried to cover that a little bit in the introduction, but why don’t I talk toss this to you first, Liz, and I’m just kind of curious, can you give some examples of what are the issues at stake with utility companies about their behavior, about how we pay our utility bills that makes this petition so important?
Liz Veazey: Yeah, thanks John. There’s definitely a lot we could say on this. I would start by saying Solar United Neighbors, I think the biggest thing that we see is that electric investor owned utilities are really taking advantage of their monopoly power to squash the semi minimal competition from like rooftop solar and other distributed energy resources. And we know that rooftop solar and investments in energy efficiency and other distributed resource help lower peak energy demand and lower maintenance and upgrade costs and lead to a more efficient, localized energy system, which costs less and keeps more money in everybody’s pockets. So I think that’s a big one for us and we really see a need for someone to sort of step up and push back on these monopoly utilities who, you know, they already have monopolies, but they’re limiting this little bit of rooftop solar in any way they can.
John Farrell: So just to take a step back for people who may not be familiar, most folks who live in urban areas get their electricity from a utility company that doesn’t have any competitors and that’s on purpose. Like the law grants them this monopoly over delivering electricity to us, but it’s not supposed to give them a monopoly over like any electricity at all, right? I’m supposed to be able to put solar panels on my rooftop. I’m supposed to be able to make changes to how I use electricity. Other people are allowed to get into and compete with them on a range of kinds of services related to electricity, but they’re not so excited about sharing, even though the those rights exist for other folks. Does that seem like an adequate description?
Liz Veazey: Yeah, I think so. And you know, I didn’t say anything about who Solar United Neighbors is. So maybe I just add that in: we’re a national nonprofit organization. We help people go solar and then connect together and fight for their energy rights. So we started in like 2007 in DC. We now have 12 established state programs and we’re starting up three more right now. And those state programs really help people go solar through our solar co-ops or buying clubs and people get a good deal and go solar together. And then we work to organize solar homeowners and supporters to fight for good energy policies. And we also provide solar education and events and resources across all 50 states and beyond. And we’ve helped more than 6,800 homes and businesses go solar, bringing more than 57 megawatts of solar to the grid. So I guess I would just say that to say that, like, we have a lot of experience working with solar owners and fighting these utilities to try to protect fair credit rates for solar or all kinds of things. There’s, it’s hard. There’s a lot of fighting out there. <laugh>
Howard Crystal: John, if I, I could also just jump in on your question.
John Farrell: Yeah, please do. And then also give a little bit of background, obviously, Center for Biological Diversity really was kind the lead author on this petition and would love to hear a little bit more about the broader work that you do.
Howard Crystal: Sure. All credit to Jean Su our Program Director, who really is the one who has led our work sort of looking at different federal agency opportunities to address the overarching problem of utility abuse of the monopoly power that they have, which is, you know, we, there are several agencies where we’ve been taking that issue. And our work at the Energy Justice Program is really to address both the decarbonization and energy justice related issues that are inherent in our utility monopoly system that we’ve had for a long time, that may have made sense a hundred years ago, but just does not make any more sense anymore, but we still have this, you know, legislative scheme around the country that gives monopoly power to these utility companies and they’re abusing that power. And that’s what this petition is really about. And there’s like sort of two central ways to that. I see sort of problem that we’re trying to address. And then I’ll talk about the abuses.

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.

John Farrell: And you’ve got, I mean, numerous examples. The first thing I wanted just say really quick is to mention a recent report I just saw, you mentioned shareholders, the Roosevelt Institute just put out a report, I think in the past week about what they called shareholder primacy, which I thought was really interesting. I’ve sort of taken it for granted, like many people who work in this space that, oh, these utilities, they have shareholders, of course, they’re just gonna work for their benefit and ignoring the fact that like the monopoly that these utilities have was a public grant. And what the Roosevelt Institute report essentially says is we could say that utilities can’t send as much money to shareholders and that they ought to be reinvesting it in better things. I don’t think it really touches on necessarily issues of competition that are so central to this petition, but I thought it was really interesting, the timing of that report relative to this petition and the way that utilities continue to prioritize shareholders, you know.

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?

Liz Veazey: Yeah, sure. I mean, that’s the example that comes to my mind when we start talking about this. So Florida Power and Light or FPL is the largest investor owned utility providing electricity in Florida and is owned by Next Era Energy, which some may say is misnomer based on some of their anti-solar work, but they have been working to fight solar in Florida for years. The first thing that I’m aware of is a ballot initiative in 2016, they spent millions and millions of dollars to sort of, they were trying to dupe Floridians basically into voting for this thing that they thought would support solar when it actually would just further entrench FPLs power and make it harder for people to go solar in Florida. So thankfully I think someone found a video of FPL executives talking about how the public was stupid and they were duping the public with this initiative and people were upset about that. And so it didn’t pass.

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.

John Farrell: Howard, I wanna toss it over to you. And the example in Florida, I think is a really pointed one where FPL has had kind of these repeated abuses of its power and especially its political power. There’s obviously a lot more of examples that are baked into that petition. I was wondering if you could talk a little bit about why, why the federal trade commission, you know, these utilities are usually regulated at a state level. Maybe there’s a state regulatory commission. It might be called a public service commission or public utilities commission. We’ve got state legislators or state legislatures. If, so for example, in Florida, this, there was a bill that was written by the utility in this case, but you know, intended to change the rules for those energy utilities, what makes it worthwhile.. What makes it important that the federal trade commission take a look at this issue and, and to do it from that federal perspective?
Howard Crystal: Well, John, the, the fact is that the current system is just not working and there are two reasons for that and I’ve got a dog barking in the background. So I apologize.
John Farrell: <laugh> no, no worries.
Howard Crystal: Two main reasons for that. One is utilities have grown in size and power. They’re often ultimately holding companies that are multi-state and it’s become increasingly difficult for one state, set of state regulators to control their activities. With the repeal of the public utility holdings act in 2005, which severely limited the ability for these companies to engage in these broader multi-state activities without repeal. Again, we’ve had this great consolidation and increase in market power, which is much more difficult for individual states to control. But the second reason is that the, as they’ve gained more power, they’ve gained more control and influence over those state regulators, right? So they’re active in elections and appointments to state regulatory commissions. We see a problematic amount of revolving door between commissions and utilities. And so that’s part of the reason why we decided it was appropriate to go to the federal trade commission, which has national jurisdiction over exactly the kinds of practices that we’ve raised concerns about to launch an investigation, which is what we’re asking for and to see both what’s going on in the industry, again, across state lines and then to consider what might be appropriate, both enforcement wise or legislative wise or otherwise to reign in these abuses.
John Farrell: If I am not mistaken, Howard, there’s actually some precedent historically for this. You mentioned the public utility holding companies act that was repealed in 2005. That act as I understand it came out of a previous federal trade commission investigation of monopoly utility companies, right? I mean, are we, are we basically just repeating the same problem?
Howard Crystal: Well, well you’re exactly right. I, I would, I would say what we wanna do is repeat the same, repeat a solution. It may not be exactly the same solution, but yes, in the 1920s, there was an enormous problem of consolidated power of utilities. At that time, one of the major fights was fighting public power because there was more of a question than there should be today about, whether the system that the utility system should be dominated by public power players or private companies. And to address the serious abuses that were occurring at that time, the FTC launched a multiyear investigation of the utility industry and the outgrowth of that investigation was this public utility holdings act, which severely constrained the ability of utilities to sort of grow in size and, and market power, et cetera. So again, the, our view is not that the repeal of PUCHA as it’s known is the only reason why we’re having these problems today. There’s a lot of other things going on in the system, especially competition that just did not exist 80 years ago, but it’s certainly a contributing factor. And it’s one of the reasons why we think both, you know, there’s precedent for the FTC to look into this and that there are probably remedies that the FTC can help come up with that will help address these problems.
John Farrell: We’re going to take a short break. When we come back, we discuss what the petition asks of the federal trade commission and what the petitioners hope might come out of a commission investigation. You’re listening to a Local Energy Rules podcast with Howard Crystal, legal director of the Energy Justice Program at the Center for Biological Diversity and Liz Veazey, Policy and Rural Energy Director at Solar United Neighbors about a new petition asking the federal trade commission to investigate monopoly utility abuses.

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Liz Veazey: So I think in Florida, you know, there’s definitely more that I could say around this and FPL has been involved in and you know, this is legal to do, but maybe we would say sketchy or, you know, challenges the idea of a regulatory compact, but FPL has been involved in running ghost candidates. So someone with the same last name as say a climate champion, Javier Rodriguez had someone running against him who had the last name Rodriguez. And, you know, FPL was involved in setting up this candidate who siphoned off enough votes that the climate champion was not reelected. It was a, you know, it was a close vote, but the person lost because of that ghost candidate. FPL was involved in multiple cases of that and that sort of meddling in politics and making sure that people get elected that they control really leads to a reduction in any sort of regulation from the state legislature or the utility regulators, that would be the public service commission in Florida, who I think is appointed by the governor, but approved by the state legislature.
John Farrell: So let’s talk a little bit about what the petition is asking of the federal trade commission. What are some of the things, and we’ve talked about a few examples. We’ve really covered a lot of ground on Florida Power and Light. What broadly are the things that the petition is asking the Federal Trade Commission to look into that we see? And I should add that the Institute for Local Self-Reliance is a co-signer on this petition. So I’m not just interviewing you out of happenstance. I think this is a really important issue and obviously we’ve signed onto it as well. I’m not sure which one of you wants to take this first, but what is this petition asking of the Federal Trade Commission?
Howard Crystal: I’m happy to take a first stab at it. First I’d frame it this way is what we’re asking for is an investigation that FTC has the authority under 6B of the federal trade commission act to launch an investigation of an industry where it thinks there are issues under its jurisdiction that are worth exploring. So the first step, assuming the FTC takes up our request, would be for the FTC to issue subpoenas, request for documents and information to the utilities on various topics. And then in terms of what they would be asking about it sort of falls into two broad categories.

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.

John Farrell: Liz, are there particular things that you wanna highlight in the petition that you think are really important that the FTC address?
Liz Veazey: I mean, I think Howard summed it up pretty well. And you know, for us it’s just about sort of the unfair competition and deceptive acts and like really leading to us paying more for our electricity system than we should and making it harder and more expensive and really discouraging people from going solar and you know, choosing to provide their own energy. And that’s really the direction we really need to go in that direction, right. To address climate change. And you know, there’s a lot we can do within equality and addressing that if we have more distributed, locally owned energy. So I think there’s huge potential to really, if the FTC can address some of our concern really help us better move in that direction.
John Farrell: When you think about, you know, Howard outlined, I think really nicely that sort of the first step would be the FTC takes this petition and says yes, that we do think that this is, these are issues worthy of investigation. They then go out, start collecting documents and information from the utility companies, from utility commissions, maybe from private developers that compete with the utilities, consumer advocates, you can imagine kind of a wide range of folks. Let’s just imagine, you know, they, they do this investigation, they spent months, maybe even years gathering information, seeking testimony, et cetera. When it gets to the end of that, what are we hoping the federal trade commission does with that information? You know, are we hoping that there’s a new a 21st century public utilities holding company act? Is there, what seem like reasonable remedies that the federal trade commission might come out with after going through this investigation that we would see as addressing some of these problems that we’re posing in this petition?
Howard Crystal: So I’ll take a first crack of that one. We suggested a couple of possibilities in the petition itself. The first of which is enforcement actions, right? I mean, what we, there are a number of things identified in the petition that we think are right for both, you know, civil and or even criminal <laugh> enforcement frankly. And one of the concerns we raise is because of the influence that the utilities currently have over state regulators and other state decision makers, it may be more appropriate for these to be looked at maybe by DOJ and maybe by the federal energy regulatory commission in the nature of enforcement, or there may be enforcement that the FTC itself it’s appropriate. So that’s sort of one category.

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.

John Farrell: I’m gonna ask you this same question, Liz, and kind of the, the remedies that you’re seeing, or maybe some of the outcomes that we could see from this. But I wanted to stick on this issue about like the political stuff, cuz you had mentioned it Liz in the, in the context of Florida Power and Light. And I keep getting curious about, you know, there’s, the Supreme court recently has sort of established a legal line of thinking around this side notion of compelled speech. And they did it in the context of unions, but it seems to have a lot of potential relevance here where we have utilities that are monopolies. So I can’t choose where to spend my money on energy, right? If I want electricity service where I live in Minneapolis or where I’m living in Tallahassee or where I’m living in San Francisco, I have one choice. Just even describing it as a choice is a little bit silly and that, that utility, whether it’s part of its profits or whether it’s the money that’s going to cover expenses for the system like that money is captive, I’m captive. And then the utility goes out and they spend that money. Whether it’s helping a ghost candidate run for office, whether it’s buying political ads to support certain ideas or campaigns, they do lots of things that many of us would never want our money spent on in terms of political speech. I guess it seems to me like that is potentially one of the remedies that Congress could consider in light of any FTC investigation. I, yeah, I’m just so, Liz to pass to you, maybe you think that’s crazy, not interesting to talk about you have other things you wanna talk about, but I’m just gonna throw that out there as something that I saw as very interesting  in this idea about kind of utility political machinations.
Liz Veazey: Yeah. That is a good question. I mean, I think Howard might have more ideas since he’s a lawyer on like what actually could happen on that front in terms of, but there are some state laws that exist. I think that provide some limits to money that utilities can spend on lobbying or certain political activities or at least say that that money has to come out of the pot. That’s like for their shareholders versus rate payer funds.
John Farrell: Mm-hmm. Is there anything else Liz that you’d like to add? We can come back to Howard on the lobbying thing, if he’s interested, in terms of like the potential remedies from the petition things that you’ve been thinking about, Solar United Neighbors is particularly feeling like, oh, you know, this is a, this is one of those things. Maybe it’s around that energy metering compensation, rooftop solar interconnection. Is there something in the work that you do in particular, helping people go solar and the fight for solar rights that you see as really important and you hope that the FTC would provide some remedy to address?
Liz Veazey: Yeah, that is a good question. I think there could be action at the federal level that maybe helps enshrine people’s rights to go solar and have fair competition, maybe something around micro grids and other sort of aggregation of distributed energy resources. I mean, we’ve seen some action at, on that, you know, already around order 2, 2, 2, 2, and sort of the aggregation of distributed energy resources. But you know, maybe there’s more that could happen at the federal level around that to sort of increase this competition. You know, there could be potential increased support for public power and sort of like the REA of, you know, earlier this century and supporting rural electrification and rural electric co-ops and people coming together to bring electricity. I think the federal government could help support people in states to buy out investor owned utilities. And I know there’s an initiative, I just attended an event today with folks from Maine who are working hard on doing just that in Maine and you know, they want to lower rates and address climate change and really support distributed solar. And they want to create this public power authority in Maine to really drive that because they’re not seeing that from the investor owned utilities now. So I think that’s another interesting idea.
Howard Crystal: I’d like to go back to the, I’d like to go back to your first amendment question for minute, if that’s okay.
John Farrell: Yes, please do. I would love to hear more about it.
Howard Crystal: It’s an area I’ve spent a bunch of time working on. So the first thing to just tee off of Liz’s point, it’s true that there are laws that on the books that restrict the ability of utilities to charge rate payers for lobbying activities, but the first thing to note, and to tie it back to the petition that doesn’t, you know, regardless of, of whether they’re using their profits or rate payer money, they can’t do illegal things including like bribing legislators, right? So when they’re, when they’re bribing legislators, it doesn’t matter if they’re using their profits for that. It’s the division is irrelevant. So that’s like one category of abuses that kind of abuses that we talk about are illegal activities that utilities are engaged in. It doesn’t matter where the funds come from. So that’s sort of level one level two is this question about where, what pot of money, right.

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.

John Farrell: That’s so great to give that overview and we’ll make sure that we have, I just wanna note we’ll have links on our show page to the FERC petition, the FTC petition, the Salt River Project podcast, all the things that we’ve referred to in this conversation. So folks can follow that trail down a little bit further. I just wanna wrap up by asking, you know, is there anything that people who are listening to this podcast can do, I know that, you know, Solar United Neighbors had a webinar about this petition it’s, I’m, I’m guessing they can still get online. And hear a recording of that. The petition language itself is on the Center for Biological Diversity’s website, but what can people do? What, how can they either learn more? Or is there any particular action they can take to support this if they are so inclined?
Liz Veazey: Great question, John. Yeah. People can see the webinar on Solar United Neighbors’ YouTube channel, and on our website, we do have an action where people can, you know, sign on to this and send a message to the FTC and to their national representatives. I will send you a link to that and people can go to, and you should be able to find the action on that page. It’s called it’s time to hold monopoly utilities accountable.
John Farrell: That’s great. Thank you, Liz. Howard, anything?
Howard Crystal: I’ll just add it’s, this is an opportunity to sort of build power, right? The Federal Trade Commission is an incredibly powerful and important federal agency, but they do a lot. They’ve got a lot on their plate. So it’s incumbent upon all of us to convince them that this is important enough that they should conduct this investigation. And that involves not just, you know, as Liz said, individual, you as an individual, if you can join the call by signing on that’s fantastic. But if you are part of an organization, your organization can weigh in and shoot a letter to that Federal Trade Commission and show your support. If you have access to or involved in politics, and you could convince your town or your community otherwise, uh, to let the federal trade commission know that this is an important investigation, that’s also be hugely helpful. But I think the more groups and individuals that the FTC hears from that this is important. And again, just to be clear, we’re not, you know, the, the petition is not asking for a particular outcome, we’re asking for an investigation. So it’s a pretty low bar. So if you agree with us that there’s enough here. When you take a look at the petition to actually look further, then please do everything you can to try and help us convince the FTC to take this up.
John Farrell: I’m thinking of the dozens of leaders from cities that have made a hundred percent renewable energy commitments and run into the brick wall of their electric utility company ought to be the kinds of folks that would be interested at a minimum in signing on to this petition. So I really appreciate that, Howard, that there’s an opportunity for them as well. Well, Liz Veazey and Howard Crystal, thank you so much for taking the time to explain this petition, the potential role the federal trade commission, and helping to hold monopoly utilities accountable. Really appreciate you joining me today.
Howard Crystal: Thank you, John.
Liz Veazey: Yeah. Thanks John. It was great.
John Farrell: Thank you so much for listening to this episode of Local Energy Rules, where I discussed a new petition to the federal trade commission to address monopoly utility abuses with Howard Crystal, Legal Director of the Energy Justice Program at the Center for Biological Diversity and Liz Veazey, Policy and Rural Energy Director at Solar United Neighbors. On the show page, look for links to a press release about the petition and an action page where you and your organization can add their voices to those from the Institute for Local Self-Reliance, Energy and Policy Institute, and the organizations of my two guests. Also on our website, you can find out about the FERC petition to reign in utility lobbying spending as well as several relevant podcast episodes, including an interview we mentioned with Jean Su about an antitrust case against the Salt River Project utility in Arizona, a conversation with David Pomerantz about the dark side of utility monopolies and ILSR’s own report about the problems posed by the monopoly structure of our energy sector. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear more powerful stories of communities taking on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.

The Purpose of Monopoly Electric Utilities

Electric utilities were granted monopolies out of convenience; they could build one large power plant, one set of transmission lines, and serve all of the customers in the area — all while taking advantage of economies of scale. However, circumstances have changed. Solar technology is cost-effective at a small scale and empowers individuals to generate their own electricity.

Thanks to the Public Utility Regulatory Policies Act of 1978 (PURPA), homeowners have the right to generate their own electricity from rooftop solar installations. Beyond solar, home and business owners are reducing their energy dependence by making buildings more efficient, timing their energy use, or aggregating demand response.

Monopoly utilities see all of these innovations as competition. Acting on behalf of their shareholders, rather than their customers, they are using their monopoly power to suppress these threats to their profit margin.

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

— Howard Crystal

Utilities Abuse their Monopoly Power

Veazey highlights stories from Florida as examples of shady utility behavior. Florida Power and Light has been fighting against customer rights for years, says Veazey. The utility spent millions in 2016 on a campaign that would make it harder for people to go solar. More recently, the utility drafted its own bill to eliminate net energy metering. The bill passed the Florida House and Senate, but was vetoed by the Governor.

They spent millions and millions of dollars to sort of, they were trying to dupe Floridians basically into voting for this thing that they thought would support solar when it actually would just further entrench FPLs power and make it harder for people to go solar in Florida.

— Liz Veazey

Because utilities have grown in size and power, says Crystal, state legislatures and regulatory bodies are struggling to rein them in. The repeal of the Public Utility Holding Company Act in 2005 further diminished state control.

Now what we’re seeing around the country… 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 not so legal.

— Howard Crystal

A Petition to the Federal Trade Commission

235 organizations have petitioned the Federal Trade Commission to investigate energy utilities, including Solar United Neighbors, the Center for Biological Diversity, the Energy and Policy Institute, and the Institute for Local Self-Reliance. The Federal Trade Commission (FTC) can investigate across state lines, identify anti-competitive and anti-consumer practices, and then take appropriate action.

Investor owned utilities are really taking advantage of their monopoly power to squash the semi minimal competition from rooftop solar and other distributed energy resources

— Liz Veazey

If the FTC takes up the investigation and finds evidence of utility abuses, enforcement may come through the Department of Justice, the Department of Energy, or legislative improvements like the Public Utility Holding Company Act.

Episode Notes

See these resources for more behind the story:

For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.

Explore local and state policies and programs that help advance clean energy goals across the country, using ILSR’s interactive Community Power Map.

This is the 158th episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares powerful stories of successful local renewable energy and exposes the policy and practical barriers to its expansion.

Local Energy Rules is Produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.

This article originally posted at For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update

Featured Photo Credit: sha in LA via Flickr (CC BY-NC-ND 2.0)

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Maria McCoy

Maria McCoy is a Researcher with the Energy Democracy Initiative. In this role, she contributes to blog posts, podcasts, video content, and interactive features.