Infrastructure & Environment

How Georgia Energy Companies Influence Energy Regulation

by | May 9, 2014

By Matt Kempner

The utility industry's money is flowing again this year to fill the campaign pools of state regulators who vote on issues dear to the industry.

The five commissioners on Georgia's Public Service Commission are little known by the public, but they influence electricity and natural gas bills, giant pipeline projects, a multibillion-dollar nuclear plant expansion and rural phone company subsidies paid by anyone with a land-line phone.

Two of the commissioners are running for new six-year terms for the $116,452-a-year jobs, and their campaign accounts are being boosted by tens of thousands of dollars from some of those closest to their votes.

Giving by energy and phone companies or their executives and affiliates accounts for nearly 86 percent of Commissioner Doug Everett's campaign contributions this season and about 84 percent of Commissioner Lauren "Bubba" McDonald's, according to an Atlanta Journal-Constitution analysis of candidate disclosures.

Contributions to incumbents dwarfed donations to their challengers.

The dollar flow comes with a twist this season. Lawyers for the main firm representing energy giant Georgia Power didn't pump money into the regulators' campaigns this time around. But, for the first time, upstart solar companies did in a significant way.

Other donors funneled in thousands of dollars more. Executives and lobbyists with natural gas marketer SCANA Energy contributed nearly twice as much as solar companies did to McDonald's campaign. And more than a fourth of McDonald's war chest came from construction-related companies, particularly those who build, engineer and design gas pipelines and could fall under the PSC's oversight.

Executives and others associated with Atlanta Gas Light and with rural phone companies also gave heavily.

Everett and McDonald say campaign money doesn't influence their commission actions.

"I abide truly by the law," said McDonald, who, unlike Everett, has competitors on the ballot.

McDonald pointed out that donations he received from solar developers only came after he had pushed Georgia Power to put more solar projects in its long-range plans.

SCANA officials and lobbyists donated more than $18,000 to McDonald. The PSC doesn't set SCANA's rates, but it had unanimously approved a one-year extension of SCANA's contract to provide natural gas to low-income consumers unable to get service elsewhere.

"I don't think there is a correlation at all," between donations and the vote, said SCANA spokeswoman Simone McKinney. The PSC decision "speaks to our customer service and rates."

Both McDonald and Everett said such contracts are handled primarily by PSC staff members and the commission usually follows their recommendations.

Running a statewide campaign is costly. And both McDonald and Everett said often the ones most likely to fund their campaigns are in the energy industry, which understands what the PSC does.

"If money is legal and is ethically given to you, you are going to accept it," Everett said.

In fact, he said, it would be wrong to decline campaign contributions from individuals who happen to work in the utility industry, because it would negate their opportunity to support candidates as other citizens can.

For years, questions have centered around whether campaign giving and lobbyist spending for commissioner meals and outings give big donors more influence than consumers have.

That's an issue broader than the PSC, said Liz Coyle, acting executive director of Georgia Watch, an organization that pushes for lower utility bills and cleaner energy.

"Our political system would be better off if money was not so much of a factor in it," she said. "In general, money and influence in the political realm serve to cause average citizens to think this is not a level playing field."

Georgia Power and other regulated utilities are barred from making campaign donations to PSC commissioners. But there's no legal limitation on private giving by company executives, lobbyists, vendors and others tied to the utilities. Attorneys at Troutman Sanders, which represents Georgia Power, gave thousands of dollars in past elections.

Pete Robinson, the managing partner for Troutman's Atlanta office, was among those who gave last time around, but has yet to show up in this year's disclosure filings in PSC races.

"Nothing has changed," Robinson said. "I'm very supportive of Bubba. I can't speak for anyone else at the firm." Robinson said the same holds true for Everett.

Georgia Power won PSC approval in December for a rate increase. But the increase was significantly less than the company requested. Georgia Power also found itself pushed, by McDonald in particular, to incorporate more solar power in its plans.

The utility isn't suggesting there are hard feelings.

"We have a strong working relationship with the Public Service Commission," spokesman Brian Green said.

Meanwhile, solar developers, who carry the image of underdogs in the state's energy production, are making gains. They pumped about $11,000 into McDonald's campaign this season.

"We want to support the candidates that have been receptive to our ideas and helpful in increasing the solar industry in Georgia," said Mark Bell, co-founder and president of Atlanta-based Empower Energy Technology, which gave $250 to McDonald.

Bell, who is also chairman of the Georgia Solar Energy Association, said other parts of the alternative energy industry may follow suit and "challenge the status quo."

Changes are already underway. Both Everett and McDonald had used SCANA lobbyist William Bradley Carver as their campaign treasurer in the past. But Everett's disclosure forms now list a new treasurer. And while McDonald's forms continue to show Carver as his treasurer, McDonald said Carver left the campaign position at the end of last year because of "pressure" over the SCANA connection. The AJC had highlighted Carver's dual role in an earlier story.

Other connections remain. While AGL is barred from giving to PSC campaigns, Everett said he believes an AGL employee -- he said he is not sure which one -- organized a fundraiser last year that both he and McDonald attended.

(c)2014 The Atlanta Journal-Constitution

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