FERC Rejects Reform, Leaves Customers Paying for Utility Trade Associations

Source: Energy and Policy Institute |By Matt Kasper

Federal energy regulators voted yesterday to keep in place accounting rules that allow monopoly utilities to charge customers for trade association activities, including political advocacy. The decision rejects calls to reform accounting rules and protect customers from footing the bill for these expenses. 

TURN wrote: “FERC should adopt standard transparency requirements for utilities seeking rate recovery of industry association dues, including disclosure of the association’s costs for the following NARUC cost categories: (1) Legislative Advocacy, (2) Legislative Policy Research, (3) Regulatory Advocacy, (4) Advertising, (5) Marketing, and (6) Public Relations. These requirements would enable the regulator to ensure that ratepayers pay only for costs that confer clear benefits on ratepayers, and do not pay for the association’s political activities or public policy advocacy.” TURN referenced NARUC’s audits of the trade associations that occurred briefly in the 1980s and 1990s. The audits informed state regulators how to treat trade association costs by using those various cost category details. NARUC no longer conducts the audits, nor do the trade associations provide those breakdowns.