Nessel requests greater transparency from utilities on lobbying spend

Michigan Attorney General Dana Nessel's office is requesting the state regulator of utilities demand more transparency around the money spent to influence public policy when electric and gas companies file their rate cases.

The current requirements aren't sufficient, according to the filing signed by Assistant Attorney General Michael Moody. It suggests requiring details around the utilities' and affiliates' expenses for influencing regulation or legislation directly or indirectly and for influencing public opinion.

Additionally, Nessel's office asked for transparency for costs related to Michigan Public Service Commission proceedings, for contributions utilities make to nonprofit organizations and for litigation to overturn rules or statutes.

The comments recommend utilities provide the information for the most recent five years and for the forecasted period in rate increase requests. Michigan's major utilities say these types of costs aren't factored into customers' rates.

Utilities are traditionally major political players. Lawmakers on both sides of the aisle have criticized and accepted money from utilities. How much isn't always clear thanks to unreported "dark money" contributions and those made by connected nonprofit funds, which are used for political advertising in elections that don't expressly tell people how to vote. 

In 2018, then State Rep. Gary Glenn, R-Midland, blamed his loss in a state Senate primary in part to dark money from "monopoly utilities." Fellow GOP state Rep. Kevin Daley won after Glenn estimated that nonprofits Faithful Conservatives for Michigan, Citizens for Energizing Michigan's Economy, and Alliance for Michigan Power spent more than $1 million against him. Reports indicate Faithful Conservatives for Michigan spent at least $263,000 on TV ads in the 31st District primary season, according to the Michigan Campaign Finance Network.

Citizens for Energizing Michigan’s Economy benefited from roughly $20 million in contributions from Consumers Energy in 2017, according to reports the utility submitted to the Michigan Public Service Commission.

Legislation and regulation are influential in grid reliability and how quickly the utilities transition to renewable and cleaner energy sources, raising concerns over bias and how it influences Michigan's electricity rates being some of the highest in the Midwest.

“Utilities are government-created monopolies regulated by the state,” Nessel said in a statement on Wednesday. “Accordingly, customers of these monopolies should have the right to know whether and how much their utility is spending to influence legislation or other public policy that impacts the utility and consumers."

The comments filed on Friday are a part of the MPSC's process dating to 2017 to revise standard rate application filing forms and instructions to be able to process rate cases under a shorter time of 10 months instead of a year.

The MPSC declined to comment Wednesday because the case remains open.

Jackson-based CMS Energy Corp. and its subsidiaries, including Consumers Energy, advocate through "regular, constructive and transparent interactions" with government officials, policymakers and other stakeholders, spokeswoman Katie Carey said in a statement, adding the company complies with state and federal disclosure requirements.

"No costs to influence public policy," she said, "are included in rate case filings and are not reflected in customer rates.”

Echoing those remarks, DTE Energy Co. spokesman Pete Ternes in a statement said the Detroit-based utility reports its expenses toward lobbying, political contributions and memberships to the MPSC. Those costs "are not included in rate charged to customers," he added.

Nessel's comments also make recommendations to help stakeholders more quickly and effectively review utility rate increases requests. Those include reducing the length of a utility's forecast, requiring cost-and-benefit analyses to justify expenses, mandating greater details from multi-state utilities and taking other steps around the litigation process.

In March, a new time-of-day standard rate goes into effect for DTE Electric customers.

bnoble@detroitnews.com

Twitter: @BreanaCNoble