Maine has become the third state this year to pass a law tightening reporting requirements for public utilities funding political activities, such as lobbying and campaign advertising. Supporters say the millions of dollars being spent by electric utilities in a referendum effort this fall underscore the importance of added transparency.
In recent years, Mainers have been flooded with ads funded by power companies. It's the sort of electioneering that motivated democratic state senator Mike Tipping to sponsor a bill aimed at enhancing the disclosure of political spending by regulated utilities.
Speaking at a committee hearing in February, Tipping acknowledged that it's not easy to limit what utilities spend on political advertising.
“What we can do far more quickly and easily is increase transparency, of how these utilities are spending money to influence Mainers, and provide more information to the PUC, to the members of this committee here, and to the public about their advertising practices," Tipping said.
The new law adds lobbying, grassroots lobbying, and contributions to trade associations or chambers of commerce to the list of expenses that cannot be charged to ratepayers. It also requires that public utilities disclose their political, charitable, and educational expenses to the Public Utilities Commission.
Rebecca Schultz, of the Natural Resources Council of Maine, strongly supported the bill.
“How these companies move money and try to influence politics is a really complicated issue, so these rules are long overdue for an update," Schultz said. “I think that our regulators are in a really, really challenging position here. We’re asking them to account for how these companies are influencing politics. They really need a full and accurate picture of how these political campaigns are being funded in order to guarantee that Maine ratepayers are not paying for these activities.”
Schultz points to the fact that CMP’s parent company and allies spent over $60 million to influence voters in a referendum two years ago seeking to derail a major transmission line through western Maine. And the parent companies of CMP and Versant have already spent more than $15 million to campaign against the public power referendum question on the Maine ballot this fall.
The group behind this year's referendum--Our Power--supported Tipping's bill. Spokesperson Lucy Hochshartner says the rules governing political spending by utilities haven't been updated since the 1980s, when Maine utilities were locally owned.
"The utilities looked a lot different then," Hochshartner said. "There have been shifts to how utilities operate, how they use things like trade associations, how they have parent companies that they didn't back then. And this just really gives Mainers more knowledge about what their utilities are spending their money on, and what they are doing politically."
Central Maine Power declined to be interviewed for this story, but in written testimony on Tipping's bill, company officials stated that all of CMP’s political and charitable contributions and goodwill advertising spending are paid for with money from shareholders, not ratepayers. The company has also pointed out that using ratepayer funds for political purposes is already against Maine law, and that any use of shareholder funds for political purposes is already disclosed to the Maine Ethics Commission
PUC Chair Phil Bartlett says Maine already does have some safeguards in place.
“It’s also important to recognize that money spent on political advertising campaigns and the like does not find its way into electric rates, so ratepayers are not paying for those costs that are borne by the utilities," Bartlett said. "But certainly the legislature has made clear that they want additional reporting, and a little clearer reporting surrounding these expenses, and we will certainly make sure that happens.”
Neither CMP nor Versant testified against the bill at the February hearing, nor did anyone else. Its passage follows the lead of two other states, Colorado and Connecticut, Which have recently adopted similar legislation.
"I certainly expect to see this expand across the country as well," says Charlie Spatz, a researcher with the Energy and Policy Institute, a utilities watchdog group. "And I think that one of the reasons that we are seeing an appetite from policy makers for this issue is because of high electric and gas bills."
Next, the PUC will draft rules to implement the new law, but it's unlikely that they'll be finalized before this November's election.
