FERC Ruling Endorses Pay-to-Play Politics

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

Note: Today, the U.S. Federal Energy Regulatory Commission (FERC) unanimously ruled that a private corporation tasked with operating the power grid for 65 million people that is funded through household utility bills, can give money to political organizations that provide VIP access based on those contributions. The decision has immediate negative impacts on rooting out pay-to-play political activities. The case began with a complaint filed by Public Citizen in 2018.

FERC’s order endorses the corruption of pay-to-play political activity, where tens of thousands in payments are used to secure VIP access to elected officials, undermining our democracy by granting special access to elected officials only to those able to afford it. American households should not have their monthly utility bills fund corporate political spending.

Public Citizen’s complaint documented how PJM Interconnection, the private corporation funded by ratepayers that operates the grid for 65 million people, used ratepayer money to make hundreds of thousands in contributions to two political organizations that fund gubernatorial candidates. PJM defended using money paid by households’ utility bills for this political purpose, claiming that the large payments gave PJM VIP access to governors and their staffs for educational and information purposes relating to energy policy.

As part of our research, Public Citizen interviewed members of PJM’s Finance Committee who informed us that PJM never disclosed any details of this type of political spending using ratepayer money. FERC’s order further underscores the complete lack of accountability by these massive, ratepayer-funded regional transmission organizations.

FERC-regulated industries should understand, however, that FERC’s decision does not mean that all bets are off. The commission appears to acknowledge that ratepayer funds may not be used for political contributions. Unfortunately, however, the commission bought the assertion that the pervasively political governors’ associations are engaged in nonpolitical educational activities and that PJM’s payments related solely to those nonpolitical purposes. Utilities shouldn’t be misled into thinking they have free rein to use ratepayer funds for partisan political purposes.