NC WARN Calls out Progress Energy for Charging Political Pay-offs to Customers via an Accounting Fiction
Millions to Influence Politicians Should be Rejected in Rate Case, Says Watchdog Group
Durham, NC – A utility watchdog group said today it will press the NC Utilities Commission to disallow millions in annual political expenditures that Progress Energy wants to charge annually to rate payers by using accounting gimmickry. Durham-based NC WARN says the monopoly utility – whose rates and stockholder returns are set by the Commission – is granted too much profit if it is using customer money to influence political campaigns and public policies.
Progress recently filed political campaign contributions and lobbying expenses as part of its new request to boost residential rates by over 14 percent. But the utility – now owned by Duke Energy – blacked out the page showing the contributions, claiming the figures are confidential.* After NC WARN attorney John Runkle reminded Progress that the Commission recently ruled that Duke-Progress can claim confidentiality only for legitimate trade secrets, Progress agreed to release the political numbers sometime later this week.
NC WARN said today the amount will range well into the millions, citing a Democracy NC report showing that in 2010, Duke and Progress combined spent $19 million on lobbying and political donations just at the North Carolina and federal levels in the 2009-2010 election cycle.** That doesn’t count spending in other Duke and Progress Energy states, and it came before the US Supreme Court unleashed corporations to spend unlimited amounts to sway politicians.
Progress doesn’t seek direct reimbursement of the political money as part of operating expenses, claiming it’s paid for by shareholders. NC WARN called that an accounting fiction with an ill-defined line that allows the Duke-Progress to bill customers through a back door; the political expenditures are contained within the guaranteed rate of return the Commission grants as it sets rates for monopoly utilities.
“Progress Energy gets all its money from the ratepayers,” said Jim Warren, NC WARN’s Executive Director. “We’re saying the Utilities Commission needs to make sure that ratepayers aren’t forced to pay for the corporation’s political operations – especially because they’re used against the public interest.”
He pointed out that, if passed in a rate case, such amounts get locked in for annual recovery until the next rate case. Worse, Warren said, tens of millions more is similarly charged every year to fund image ads, targeted philanthropy and other items that allow the utilities to polish their corporate images and to mute criticism – all at customers’ expense.
“People are sick and tired of corporations polluting our democracy with their political pay-offs,” said Warren today. “It’s particularly odious when Duke-Progress use ratepayers’ own money against them – to press for fracking, the Annual Rate Hike Bill and other measures that harm our wallets, health and environment.”
He said NC WARN will be seeking full documentation of the various corporate giveaways as part of the group’s formal intervention in the rate case.