Dive Brief:

• A new report from the watchdog Energy and Policy Institute says utility ratepayers are being "forced" to fund political activities of the Edison Electric Institute, the trade group for U.S. investor-owned utilities, and other power sector groups. 
• The report from the liberal nonprofit highlights the "widespread practice" of IOUs including their EEI membership dues in general operating expenses, resulting in "ratepayers subsidizing the political activities of EEI."
• EEI says its members "provide necessary record evidence to support each recoverable expense" in their rate cases, "including a portion of trade association dues." Lobbying expenses, an EEI spokesman said, are not recoverable, and the EPI report uses a definition of lobbying that is too broad.

Dive Insight:

The new report from EPI calls into question just how much utility ratepayers should be charged for legislative, research and policy efforts at EEI and similar trade groups for municipal power providers and nuclear energy.

While EEI reports direct lobbying expenses each year, which may not be recovered from customers, the EPI report argues a number of other trade group operations like legislative advocacy, policy research, advertising and public relations.

In the most recent year with complete data (2005), those various advocacy, marketing and PR functions made up nearly 70% of EEI expenditures, the report notes. Direct lobbying, meanwhile, amounted to 14% of total expenses between 2004 and 2015.

Many of EEI's policy achievements, the report argues, are the result not just of direct lobbying, but "EEI staff doing work that is not technically considered nondeductible, but is certainly political in nature by any reasonable definition."

The authors argue that utility ratepayers should not be on the hook for these political activities, and that state commissions should step up oversight of membership dues for trade groups. The report outlines a number of individual utility dues to EEI, as well as concerns of consumer advocacy groups. 

EEI, however, says its activities are above board and that it follows all guidelines regarding financial disclosure. The lobbying portion, a spokesperson said, is reported each year using the Internal Revenue Code's (IRC) definition of "lobbying and political activities."

"In filings required under the Lobbying Disclosure Act, EEI elects to use the same IRC definition, which broadly captures not only federal lobbying, but also state and grassroots lobbying and political activities," the spokesperson said. "EEI activities in certain regulatory proceedings and communications efforts, for example, are not lobbying as defined by federal law. EPI cannot change the definition of ‘lobbying,’ as set by law, to fit EPI’s own definition.”