By Lisa Sorg
The NC Utilities Commission closed several, but not all, loopholes in rules prohibiting public utilities, notably Duke Energy, from passing along lobbying and advertising expenses to ratepayers, according to a ruling issued last week.
This “discretionary spending” includes advertising that appears on social media, as well as promotional materials that serve only to burnish a utility’s image, compete with other utilities for customers, and are unrelated to providing service to the public.
Utilities must also keep detailed lobbying records involving conversations with the executive branch of state government — such as the governor’s office, the Department of Environmental Quality, and the Department of Agriculture and Consumer Services.
The ruling becomes effective on Sept. 1 and covers filings by all public utilities: electric, natural gas, water and sewer.
The commission had already passed similar rules regarding discretionary spending — defined in part as advertising that helps promote “effective and reliable service” — but the new rules make prohibitions even more explicit. Other expenses, such as political advertising and lobbying, must be covered by company shareholders.
NC WARN, Friends of the Earth, and the Center for Biological Diversity had petitioned the commission in 2019 to clarify and strengthen language. The Public Staff of the commission agreed with some of the public interest groups’ proposals.
In its written comments to the commission, Duke Energy said it has complied with the rules, and will continue to do so.
Jim Warren, executive director of NC WARN, an outspoken critic of Duke Energy, said that in previous rate cases the utility attempted, albeit unsuccessfully, to recover costs associated with discretionary spending.
Bob Hall, a campaign finance watchdog and former executive director of Democracy North Carolina, endorsed the changes. Hall commented that “political activity is not simple electoral but also includes promoting positions on controversial topics and issue advocacy.”
The commission agreed. It also removed the word “controversial” from the definition of political advertising, and broadened the language to include “any issue of public importance.”
