Are Electricity Customers Funding Anti-Clean Energy Groups?

As consumers, we often find ourselves in a common conundrum: paying for a product or service from an organization that doesn’t align completely with our values. Maybe that organization even provides financial support to causes that completely undermine what’s in our best interest. 

For some homeowners and renters, one example of this type of dilemma is when a fraction of our monthly power bill to the utility company is funding organizations fighting against clean energy policies. 

While this is not the case for all utility companies nationwide, it’s nonetheless a reality that has come to light in recent years.

Utility customers can be understandably upset by this, especially if they are personally invested in large-scale renewable energy initiatives for the sake of minimizing harmful fossil-fuel-based emissions into the atmosphere. 

So, yes: grid-paying customers, with their utility payments, are (inadvertently) funding anti-clean energy groups. 

While technically not illegal, the laws in place that are intended to prevent this are often vague and contain loopholes that allow the practice to continue through trade associations, which isn’t classified as lobbying by the IRS. 

We’ll provide some context to this issue by discussing the history of solar as an industry disruptor, including past and present political efforts to curtail it.  

Solar: an energy innovator and disruptor   

Look around online, on billboards, and even at your doorstep, and it seems like solar power companies are everywhere, vying for your business. But it wasn't always that way.

Solar panels used to be just for the wealthy. But in recent decades, solar energy has undergone a renaissance of sorts, a money-saving scientific breakthrough within the reach of a large portion of homeowners. And that evolution continues with progress yet to be made in solar battery affordability. 

But how did solar get to the point where it could very realistically change the energy industry as we know it — including unleashing the power of lobbyists invested in fossil fuels as the forever status quo? 

Turns out solar is no stranger to current controversies, with many ups and downs in terms of public interest and skepticism in the past century.

1880s–1900s: The first solar cell 

While solar technology is thought to have been discovered in the 1400s, in 1883 Charles Fritts invented the first solar cell that could transform solar power into electric power. More than two decades later, Henry Willsie would become the first person to figure out how to store energy generated during the day for use at night. 

Unfortunately, in the early 1900s, coal and petroleum became easier and cheaper to obtain, and interest in solar technology tapered off.

1920s–1960s: Development and utilization  

Despite a general lack of interest from the public, solar energy continued to linger in the minds of scientists. Even Albert Einstein took a crack at converting light into electricity and was awarded a Nobel Prize for that very accomplishment in 1921.

In an attempt to power telephones better, Bell Labs invented (some say accidentally) the modern solar cell out of a mix of purified silicon and arsenic. Almost immediately, the first solar cells hit the market, showing up in toys and radios in 1956 and in the first satellites and crafts of the Space Race.

Unfortunately, solar cells were too expensive for serious use in daily life. A one-watt solar cell would cost the average citizen $300, which today would be equivalent to about $3,750. 

1970s–1980s: Carter, Reagan, and big oil  

In 1974, private homes in North America that were entirely heated or cooled by solar power systems numbered only six. But as the 1973 oil embargo and 1979 energy crisis took their toll, solar technology re-entered the spotlight as a much-needed alternative to fossil fuels. 

President Jimmy Carter showed his support for solar power by having a solar water-heating array set up on the roof of the White House. He gave a compelling speech addressing his hope for America to harness “the power of the sun to enrich our lives as we move away from our crippling dependence on foreign oil.” 

A generation from now, this solar heater can either be a curiosity, a museum piece, an example of a road not taken, or it can be a small part of one of the greatest and most exciting adventures ever undertaken by the American people.

— President Jimmy Carter, June 20, 1979

Unfortunately, even then, solar power wasn't immune to special interests. 

In 1983, oil prices fell again and oil companies exercised their influence on the new Reagan presidency, a presidency in which “an antisolar sentiment prevailed.” To show his support for fossil fuels, Ronald Reagan had President Carter's solar water heater system removed from the White House roof in 1984.

Side note, in case you’re curious: Solar panels returned to the roof of the White House in 2013, during the Obama administration. 

1985: Ratepayers said to fuel utility lobby 

The National Association of Regulatory Utility Commissioners (NARUC) investigated the Edison Electric Institute’s (EEI) use of utility customer money and conducted annual audits of the organization's financial records, finding that customers were inadvertently funding politics potentially contrary to their interests. 

The November 18, 1985 Washington Post article explained that Michael Foley, NARUC’s director of financial analysis, said that passing along such expenses to consumers violated most states’ laws. 

"It is clear to us, based on a rather probing analysis of their expenditures, that the principal thrust of the Edison Electric Institute's activities is that of attempting to influence the affairs of the federal government," he said. "The majority of the dues received from utilities are directed toward that goal."

In the aftermath of this investigation, regulations were put in place and utilities collected a significantly smaller portion of their dues from ratepayers.

1990s–2000s: Renewable Portfolio Standards (RPS) 

Once again triggered by issues with fossil fuel supply problems, and aided by increased awareness about global warming and the other side effects of using oil and coal, solar power started to get another look from utility companies and consumers. 

Starting in the mid-1990s, solar power plants and residential solar systems emerged nationwide. 

States began creating their own renewable portfolio standards, or requirements for how much of their power would come from renewable sources (one percent, for example), like solar and wind. While Iowa was the first state to do this in 1983, most states began establishing and enforcing these standards in the early 2000s. 

2003: The Power Purchase Agreement (PPA)

Through his company SunEdison, mechanical engineer Jigar Shah figured out how to make solar power a financial possibility for almost any household, offering customers a solar-power purchase agreement. 

Third parties contracted with SunEdison to have solar panels put up at no initial cost to the homeowner or renter. SunEdison then charged the homeowner or renter for the amount of energy produced at a fixed rate and time period. This rate was less than what they were paying utilities anyway, saving them money as energy prices rose. 

But it wasn't an act of philanthropy that made this arrangement possible. The third party (often a solar installer, bank, or investor) who had paid to put up and maintain the solar equipment was making money on the leases since they sold the leftover electricity off to local utilities.

Shah's model made solar energy, which had once been an unjustifiable extravagance, accessible to nearly any American household.

How utility companies continue to influence politics 

We’ll continue on with an explanation of more recent events exposing conflict between fossil fuel-based groups and renewable energy proponents — and where consumers fit in. 

Of course, we don’t intend to villainize utility companies or lobbyists: humans make up each of these entities, and the understandable desire for wealth, control, and maintenance of the familiar is often behind a seemingly problematic agenda. 

Additionally, millions of Americans — just shy of 1 percent of the nation’s workers —  are employed by the fossil fuel industry, so the situation is far from simple. 

2017: Energy and Policy Institute exposes EEI 

According to a May 2017 report published by watchdog organization The Energy and Policy Institute, utility ratepayers had continued to be forced to fund political groups such as the EEI that fight against clean energy. 

In fact, the EEI's budget of $90 million in 2015 was the highest in decades: an increase that the nation's electric utility customers helped pay for.

But how do special interest political alliances work? 

Efforts of the EEI and similar groups (decades ago and now) include the following: 

• Promoting fracking and natural gas infrastructure
• Proposing bailouts for nuclear power plants
• Attempting to debunk the science of climate change among the general public 

In this particular case, the EEI and similar trade associations charge dues to every investor-owned electric utility company in the United States in exchange for representation and political influence. The utilities then assign a significant portion of these dues to ratepayer profits. 

While this portion amounts to pennies for each individual homeowner or renter, as a whole, it’s a mind-blowing amount of cash. The Energy and Policy Institute report cited that in 2016, Georgia Power charged 71 percent of its dues to electricity customers and only 29 percent to shareholders. 

As mentioned previously, this issue came to light in the 1980s, after which regulations were established to prevent this misuse of customer funds. 

However, the NARUC quit performing audits in the late 2000s, and external oversight of the EEI's dues faded away, replaced by a system of self-reporting that blurs the lines of what exactly ratepayers were funding. 

One thing was clear, though: electric utility customers were footing more of the bill than they did when the EEI was subject to external audits. Invoices from the EEI to the Oklahoma Gas and Electric Company revealed that member dues increased by a total of 26 percent from 2011 to 2016, while Florida Power & Light recovered more than $2.4 million from ratepayers in 2018, up over $1 million from 2008.

Again, not all of the ratepayer-funded activities carried out by trade organizations such as the EEI are technically classified as "lobbying" by the Internal Revenue Code, but they are still political in nature and do not benefit the utility customers who are covering the bill. 

2020s: Same game, different details 

In 2021, fossil fuel companies, electric utilities, and other industries increased their lobbying spending significantly in the midst of debates over President Biden and congressional Democrats’ climate change bills. 

At the same time the Clean Electricity Performance Program (CEPP), fees for methane emissions, and new incentives for electric vehicles (EV) were being proposed, the energy industry and its allies doubled down on efforts to influence these policies — a 91 percent increase in spending for the National Mining Association, a 67 percent increase for the American Gas Association, and a 4 percent increase for the American Petroleum Institute. 

While specific power companies and other organizations within specific states vary in their precise agendas and methodology, it’s accurate to say that electricity customers are still funding anti-clean energy groups with their monthly utility payments. 

That’s not to say that these organizations are completely unwilling to consider alternative energy sources to fossil fuels. But they favor fossil fuels as “affordable” and “reliable” as compared to solar. 

The American Petroleum Institute (API) is the largest U.S. trade association for the oil and natural gas industry, claiming to represent nearly 600 corporations involved in many aspects of the petroleum industry. 

In February 2023, API told the nonprofit government transparency group Open Secrets that its lobbying has actually included pushing for carbon pricing and direct regulation of methane emissions. “We continue to work to defeat a punitive and duplicative natural gas tax and other misguided efforts to restrict the affordable, reliable energy needed to fuel America’s economic recovery,” said spokesperson Bethany Aronhalt Williams. 

API also said they regularly engage with “a broad range of stakeholders on the critical role U.S. natural gas and oil can play in providing affordable, reliable energy to meet growing global demand while advancing a lower carbon future.” 

Energy independence as an individual action  

Like it or not, it’s a reality that every time you pay your utility bill, you’re also providing funding to political groups fighting for causes you may or may not agree with. 

This may be one more motivation for switching to solar. If you’re looking for thoroughly vetted, highly reviewed solar companies in your area, we’ve got you covered.