Hundreds of environmental, consumer groups request investigation of electric utility industry

More than 230 consumer, environmental and public interest groups urged the Federal Trade Commission: to investigate the electricity sector for widespread abuses. These include bribery, fake dark money campaigns and denying customers access to renewable energy.

“Today, abusive practices by utilities are driving higher electricity rates, hindering clean energy competitors in the face of climate change, and interfering utility companies in democratic processes,” the groups said in the petition to the FTC. “The urgency of a federal investigation into the unfair competition and anti-democratic practices of utilities at this time cannot be overstated.”

The petition details widespread anticompetitive abuses by monopoly electric companies across the country, including tens of millions of dollars in bribes to government officials, bankrolling schemes to lead “ghost candidates” to keep political allies in power, and repairing the market to block competitors from supplying renewable energy to customers.

“Utilities are ripping off taxpayers and cutting off power as they stuff politicians’ pockets and manipulate the system to block planet-saving renewables,” said Jean Su, director of the Center for Biological Diversity’s energy justice program. “Just like a century ago, the FTC should use its authority to investigate the broken utility sector and put a stop to this blatant self-dealing. The FTC must stand up for consumers and give competition in renewable energy a chance.”

An FTC investigation into the electricity industry has set a precedent. Mass industry consolidation in the 1920s led to consumer abuse, corruption and a relentless campaign against competitors in public power. These actions sparked a seven-year FTC investigation into power utility abuses.

The findings of the study laid the groundwork for the Public Utility Holding Company Act of 1935. This landmark legislation put limits on the ability of utility companies to merge and manipulate the market. Congress repealed the law in 2005, exacerbating many of the problems facing the United States today.

Some of the abuses described in the petition include:

  • Ohio utility company, FirstEnergy, paid $60 million in bribes to the Ohio House speaker’s political machine. In return, the utility received a $1 billion taxpayer-funded bailout for several of its unprofitable nuclear and coal plants.
  • Florida Power and Light has spent millions of dollars on political advisers who devised a plan to transfer votes to outside “ghost candidates” of candidates committed to holding utilities accountable, according to reporting from the Orlando Sentinel The ghost candidate won in all three races. A utility opponent lost by just 32 votes.
  • A recent national survey found that nearly three-quarters of solar developers experience delays in connecting projects to the grid. Eighty-five percent of respondents specifically identified non-compliance with utility interconnection procedures as a problem. These delays can increase the cost of distributed solar projects and cause customers to pull out of long-delayed projects. Minnesota Regulators fine Xcel Energy $1 million for not keeping a backlog of projects. Two years later, the backlog remains a barrier to solar growth.

The five-member FTC is on full blast with last week’s confirmation from law professor Alvaro M. Bedoya. The committee was split along party lines, but the Democrats now have a 3-2 majority.

Proponents say the FTC should take action to stop utility misuse and recommend legislation that will protect consumers. Legislation should include structural changes that remove conflicts of interest and reduce utility companies’ ability to exercise market power over their competitors.

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