Colorado and Connecticut saved residents hundreds of thousands on utility bills todayheadline

People across the U.S. receiving rising utility bills aren’t just paying for the costs of gas and electricity: They could also be paying for corporate lobbying and advertising. 

Electric and gas utilities routinely charge ratepayers for costs related to political advocacy, ads to burnish their brand, and even luxury perks for executives and employees, according to a recent report by the utility watchdog group Energy and Policy Institute, or EPI. Such expenses add up to millions of dollars paid by customers toward utilities’ efforts to raise prices and stall climate progress. While charging customers for lobbying is banned in federal and state laws, consumer advocates say that existing policies are nowhere near rigorous enough to hold utilities accountable.

In some states, that’s starting to change. In 2023, Colorado, Connecticut, and Maine passed the first comprehensive laws to prevent utilities from charging customers for lobbying, advertising, and other political influence activities. Customers in those states have already saved hundreds of thousands of dollars after regulators began enforcing the laws last year. 

Consumer advocates say that as the impacts of these policies become clearer — and as utility bills continue to hike up — more laws will be on the way. Last year, eight states introduced bills to rein in utility cost recovery. Last month, five more states followed suit, according to EPI. 

“The momentum behind utility accountability legislation continues to grow,” said Karlee Weinmann, a researcher at EPI and co-author of the group’s latest report. “As we put numbers on the savings generated by these bills, we’re going to hear more and more ratepayers asking, ‘How do I get this done in my state?’”

The laws in Colorado, Connecticut, and Maine broadened and clarified the range of political activities utilities are banned from charging to ratepayers compared to existing federal and state rules. Costs that utilities are prohibited from passing on to customers in these states include membership dues to trade associations that engage in lobbying, donations to political advocacy groups, and public relations campaigns. The three states’ laws also introduced limits or bans on invoicing customers for fees for consultants or lawyers hired to argue for rate increases, and required utilities to provide detailed annual reports on political spending to ensure that shareholders — rather than consumers — foot the bill. 

It’s still too early to assess the full impact of these laws since they apply primarily during rate cases, proceedings where utilities seek approval from regulators to adjust their prices. As part of the process, utilities tally up their investments and expenses, and state officials decide which costs can be reasonably passed on to the utility’s customers. Only a few rate cases have taken place since the laws took effect, and Maine just approved rules this week on how to implement its law. But judging from recent proceedings in Colorado and Connecticut, “We’re seeing very, very positive signs” in terms of what kinds of savings utility customers can expect from these laws, said Itai Vardi, co-author of the EPI report.

In Colorado, state regulators rejected more than $775,000 in lobbying fees, trade association dues, and investor relations costs sought by the utility Xcel Energy in a gas rate case last year, noting that those expenses are forbidden under the state’s utility accountability law. Total savings could end up even higher: Commissioners also ordered Xcel Energy to resubmit lobbying disclosures and remove all investor relations costs from its rates. 

In Connecticut, state officials nixed $555,000 in industry dues, travel and meal expenses, and investor relations costs that the utility Avangrid attempted to stick customers with during a gas rate case last year, according to EPI’s review of rate case filings. Regulators also cited the new utility accountability law for their reasoning.

Early enforcement in these states proves how effective these guardrails are. It’s also a troubling sign that utilities repeatedly attempt to recover lobbying and political costs even in states where it’s illegal, said Weinmann. “When we see these savings, we’re also seeing the degree to which expenses that are not associated with the provision of utility service and perhaps not beneficial to customers are included in rates.”

In every state in the U.S., the regulators who hear rate cases — known as public service commissions or public utility commissions — are supposed to keep inappropriate charges out of prices. Without rigorous legislation, they’re not always successful: The burden falls on commissioners and consumer advocacy groups to comb through thousands of pages submitted by utilities for rate proposals and pick out and dispute charges. But some utility requests are too egregious to make it past public utility commissions, even in the absence of comprehensive ratepayer protection laws.

In Virginia, state regulators have flagged and removed millions of dollars in lobbying charges by Dominion Energy in rate cases in 2021 and 2023. In California, an investigation by state regulators found that the utility SoCalGas improperly charged customers for lobbying to promote the use of natural gas. And in a particularly flagrant example, subsidiaries of the Ohio-based electric utility FirstEnergy agreed to refund tens of millions of dollars to customers across multiple states after charging them for lobbying costs and expenses related to FirstEnergy’s bribery of Ohio House Speaker Larry Householder between 2017 and 2020.

Utilities are also spending vast sums on advertising to boost their company image. According to the EPI report, 15 of the largest electric utilities in the U.S. spent a combined $1.1 billion on brand advertising between 2014 and 2023. It’s unclear if any of those expenses were passed on to customers, but some utilities have made attempts to do so: Last year, Chesapeake Utilities in Maryland asked regulators for permission to charge ratepayers for its “Natural Gas Does More” campaign, which used puppies and other cuddly images to promote the fossil fuel. Maryland state officials deemed the request inappropriate and not in the public interest.

Utilities have even tried to pass on the costs of lavish corporate perks like private jets. In a rate case last year, Michigan Attorney General Dana Nessel called a request by Detroit-based utility DTE Energy to charge ratepayers for private jet trips “downright insulting to customers.” Michigan regulators later refused the request. In Indiana, Duke Energy Indiana admitted that it had charged consumers more than $5 million between 2021 and 2023 in private jet costs, according to testimony filed last year by the consumer advocacy group Citizens Action Coalition. Commissioners in Indiana recently denied another request from Duke Energy Indiana to pass on $1.9 million in private aircraft expenses to customers.

National utility trade associations strongly disputed the EPI report’s findings and emphasized their commitment to reducing emissions and providing affordable energy. “The natural gas industry has long committed to collaboration with policymakers and regulators to help achieve our nation’s ambitious climate and energy goals,” said Karen Harbert, president and CEO of the American Gas Association, which represents gas utilities. 

A spokesperson for Edison Electric Institute, a trade organization for investor-owned electric utilities, argued there’s no need for more state-level ratepayer protection laws. “Electric companies already are subject to strict federal and state laws that ensure lobbying activities are always funded by shareholders and not customers,” said spokesperson Brian Reil. “In instances of inadvertent expenses being approved, mechanisms already exist for state commissions to ensure that accounting changes are made, and, if needed, customer refunds granted.”

But in the absence of laws like the ones in Colorado, Connecticut, and Maine, it’s impossible to know exactly how much utilities are improperly charging customers, said Adria Tinnin, director of race equity and legislative policy at The Utility Reform Network, a consumer advocacy group in California. Under existing California rules, utilities can classify spending in even prohibited categories like promotional advertising or lobbying in vague or misleading ways, Tinnin said.

Meanwhile, during rate cases, utility regulators and advocates are often working with limited information because “utilities do not provide any information that they’re not legally required to,” said Tinnin. “If we don’t have transparency, we can’t know to what extent ratepayers are being ripped off.”

More and more lawmakers are catching on to the issue. In January, legislators in Indiana, Maryland, Massachusetts, Oregon, and Utah introduced bills to prevent utilities from recovering costs for lobbying and other political activities. In California, Tinnin’s group is partnering with other advocacy organizations to develop language for a similar bill to be introduced later this year. A previous utility accountability bill introduced last year in the state failed to move out of committee.

Consumer advocates say the laws could help address a growing energy affordability crisis as households struggle with mounting prices. Household utility bill debt has risen 8.4 percent since December 2023, according to one estimate, while power shutoffs for nonpayment have soared across the country. President Donald Trump’s threat to introduce tariffs on fossil fuels from Canada will likely raise energy prices even more while his other tariffs will make all kinds of products more expensive. 

“It all adds up,” said Weinmann. “At a time when we’re seeing folks across the country struggling with rising cost of living and higher utility bills, the impact of any bill savings is significant.”