Ohio Democrat wants to ensure utilities’ political spending doesn’t wind up on consumers’ bills

Rep. Lauren McNally, D-Youngstown, delivering sponsor testimony. (Photo courtesy of the Ohio House Democratic Caucus.)

In the nearly four years since former Ohio House speaker Larry Householder was indicted, a cascade of stories have come to light illustrating the influence public utilities have in state politics. In just the last week, Ohioans have learned FirstEnergy funneled money to dark money groups backing Gov. Mike DeWine, Lt. Gov. Jon Husted and Senate President Matt Huffman.

State Rep. Lauren McNally, D-Youngstown, is trying to put up guardrails. She’s sponsoring legislation prohibiting utilities from recouping the money they spend on politics through rates or riders. If a utility gets caught circumventing those restrictions they’d have to refund customers with interest and pay a fine. Those fines would be placed in a fund meant to help cover past due utility expenses.

The bill, known as HB 444, also requires utilities to publicize their political spending on an annual basis through the Public Utility Commission of Ohio website.

The measure would give legislative backing to what is already standard practice. The PUCO relies on federal accounting standards that prohibit calculating political spending when setting rates, but McNally argued that hasn’t been good enough.

“So if this system,” she said, “as it is today, just this quote-unquote long standing practice, worked as an efficient deterrent for utilities’ rate recovery of political expenditures, then FirstEnergy really could not have amassed $61 million in revenues to bribe public officials.”

First hearing

In committee, McNally described a familiar parental complaint. She’s a mother of four and explained, “my kids seem to never be able to keep the front door closed.”

“They’re constantly letting the air conditioning out, the heat out. They never shut a light off,” she said. “So I’m always following them around closing doors, turning lights off, sounding like my parents saying money doesn’t grow on trees.”

For many families, McNally explained, the utility costs that come with those open doors and lights left on, can really add up. She described regularly chatting with other parents about utility costs and “how hot we should let it get before turning our air conditioner on.”

Ohio’s electricity rates fall near the middle of the pack among U.S. states, but McNally noted they’re rising quickly. In 2022, the 14.3% increase in electricity bills was more than double the rate of annual inflation.

McNally allowed paying fees to improve a service or maintain infrastructure might be reasonable, but being forced to cover a utility’s political efforts, even indirectly, is not. She compared it to grocery stores asking customers to round up their bill to support a local food pantry. The latter is fine she argued because it’s voluntary and transparent.

“But what if they asked me to give a few dollars to support their corporate, political agenda?” she asked. “What if they wouldn’t tell us what that agenda is, how it improves the product, or makes our costs go down? What if they didn’t ask at all, and paying for it was mandatory?”

To bar utilities from taking those steps, she said, HB 444 combines rules, disclosure and enforcement. In addition to codifying the prohibition on including political spending in rate setting calculations, the bill explicitly defines what spending falls under the umbrella.

Contributions to political candidates and political parties obviously count. Lobbying expenses, too. But the measure also includes industry association dues, public relations expenditures or donations to the non-profit, dark money organizations politicians often rely on to obscure fundraising.

To help Ohioans follow what political spending utilities are engaging in, the bill requires them to report the previous year’s expenditures on Jan. 1. That report must include the recipient, the amount and the purpose of the expenditure. The PUCO would then combine those disclosures into a single report to be submitted to the general assembly by Feb. 1.

If a utility circumvented the law requirements, the punishment would be costly. McNally explained the utility would be on the hook for 20 times what it charged customers. Part of the money would reimburse rate payers with interest, and the excess would go to a fund meant to help people who are behind on their bills.

“It sends a clear message on the cost of corruption here in Ohio and who will pay for it,” McNally said. “The world is watching, and the time to send this message is now.”

Follow OCJ Reporter Nick Evans on Twitter.

The post Ohio Democrat wants to ensure utilities’ political spending doesn’t wind up on consumers’ bills appeared first on Ohio Capital Journal.