Connecticut Senate passes bill prohibiting utilities from charging ratepayers for political activities

Connecticut Senate passes bill prohibiting utilities from charging ratepayers for political activities

The Connecticut Senate passed legislation today that would prohibit investor-owned utilities from charging customers for lobbying, trade association dues, public relations expenses, and efforts to argue for rate increases. If the state’s House of Representatives passes the bill, Connecticut would join Colorado as the second state this year to pass legislation addressing utilities’ ability to fund their political machines from customers’ rates. 

The legislation, “An Act Strengthening Protections For Connecticut’s Consumers Of Energy,” or SB 7, passed the Connecticut Senate unanimously and with bipartisan support. One senator, a lawyer who also works for Eversource, the state’s largest utility company, recused himself from voting.

Colorado passed a similar law on May 11. That law prohibited utilities from charging their customers for legislative lobbying. The Connecticut bill uses a more expansive definition of lobbying, prohibiting utilities from charging customers for efforts to influence administrative action by executive agencies as well. 

The Connecticut bill would also require utilities to file annual disclosures to their regulator, the Public Utility Regulatory Authority (PURA), that would enable regulators and the public to better discern whether they are adhering to the prohibitions. The disclosures will begin next year, and would require utilities to include itemized lists of expenditures that they made on political influence activities, including both payments to third parties and the hours spent by utility staff on political influence activities. 

Beyond the sections prohibiting utilities’ cost recovery of political activities, the bill’s provisions advance the state’s efforts toward performance-based ratemaking that would set utilities’ profits according to their success in meeting goals for reliability and affordability, rather than their capital expenditures. The bill also tightens the rules and increases the transparency of rate case settlements, broadens the PURA’s ability to consider affordability in setting rates, increases utility reporting on outage events, and provides funding for non-utility stakeholders to intervene in proceedings at the PURA.

Consumer advocates support bill, utilities oppose

Consumer and environmental advocates supported the legislation in public testimony in February, with many highlighting the bill’s provisions to protect customers from paying for utilities’ political activities. Supportive groups included the state’s Office of Consumer Counsel, AARP Connecticut, the Connecticut Citizens Action Group, Operation Fuel, 350 Connecticut, the Conservation Law Foundation, and Save the Sound. The Energy and Policy Institute testified in support of the Connecticut bill’s reforms to cost recovery of political activities, and in hearings for the Colorado bill.

Connecticut utilities and their trade associations testified against the bill at the February hearing. No other groups opposed the bill, though two utility-supported arts organizations, the New Haven Symphony Orchestra and the Creative Arts Workshop, praised utilities as “supporters of the arts” using identical language, complete with verbatim spelling errors. The groups asked that “legislators consider United Illuminating’s longtime positive impact on the arts community as they evalaute [sic] the full impact of the consequences of this proposed bill.” Utilities frequently rely on recipients of their charitable largesse for political support, as the Energy and Policy Institute has documented. The Connecticut bill would prohibit utilities from charging customers for charitable contributions.  

Connecticut’s utilities have come under fire from citizens’ groups and legislators for their political influence. A 2021 report from the Institute at Brown for Environment and Society found that the state’s gas and electric utilities were the largest spenders on energy policy lobbying, frequently advocating against climate action.

Connecticut’s largest investor-owned utility, Eversource, spent over $305,000 on lobbying in the first quarter of 2023, making it the third-largest spender on lobbying in the state in that period, after two groups representing hospitals. 

Further reading: 

Energy and Policy Institute: Getting Politics Out of Utility Bills; How policymakers can protect customers from being forced to fund utilities’ political machines

Energy and Policy Institute: ​​Colorado law prohibits utilities from spending ratepayer money on politics

CT Mirror: Senate passes bill to reform utility regulation in CT

Grist: A new law in Colorado will prevent utilities from charging customers for lobbying

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