ALEC members reject electricity competition resolution after EEI opposition
WASHINGTON — Conservative state lawmakers clashed over utility monopoly power last week at a meeting of the American Legislative Exchange Council (ALEC), defeating a resolution on electricity market competition after opposition from a major utility lobbying group.
The resolution, introduced by outgoing Michigan State Rep. Gary Glenn, R, would have urged lawmakers to open power generation and electric retailing to competition in states where utilities still retain monopoly control over those services.
Lawmakers defeated the resolution in a secret vote Friday afternoon after opposition from the Edison Electric Institute (EEI), a trade group for investor-owned utilities.
"I think it is because of the political power of the [utility] companies," Glenn told reporters at the meeting. "It was the case in Lansing, [Mich.], before this year's elections that a lot of legislators walked around afraid of their own shadows when it came to the energy issue."
The vote at ALEC, a private conservative policymaking group, demonstrates the ongoing national debate between backers of competition and incumbent utilities keen to preserve their market power. It’s an issue that Glenn blamed for the failure of his resolution and a primary challenge that ousted him from office this year.
"I think it is a fear of political retaliation," he said when asked why many Republicans support monopoly utilities, "and it will become even more severe in Michigan now that they're hanging my bloody hide on the wall."
The competition resolution
Glenn’s resolution, introduced at ALEC’s annual policy meeting last week in Washington, asserts that electric utilities "should be restricted to the transmission and distribution grid, so that robust competition and consumer choice can emerge in the retail services and wholesale electricity markets."
ALEC resolutions are meant to serve as models for legislation that lawmakers can bring back to their states for passage. The group, founded in 1973, has been influential in conservative policy circles for decades. Brookings reported in 2013 that the rate of adoption for ALEC model legislation is "strikingly high" compared to other bills.
Members of the organization, all officially anonymous, pay tens of thousands of dollars in annual dues for private access to 2,000 state lawmakers, largely Republicans. ALEC meetings are not open to the press, but multiple sources in the Energy and Environment Task Force, where the resolution was considered, told Utility Dive it failed by a wide margin.
ALEC has shed scores of corporate members in recent years as high-profile firms like Microsoft and Exxon departed over negative publicity connected to the organization. But EEI remains a key player, and Jennifer Jura, EEI’s director of external affairs, is the co-chair of ALEC’s energy task force.
Jura and Kristine Telford, another EEI external affairs director, initially did not respond to requests for comment at the meeting, ignoring questions from reporters and exiting through a hotel kitchen after the vote. Later that evening, EEI confirmed its opposition to the resolution in an email.
"EEI voted against the deregulation resolution, which was overwhelmingly defeated by public sector members," spokesperson Brian Reil said in a statement. "With almost 20 years of data, and as evidenced by attorneys general reports out of Massachusetts, Connecticut, and Illinois to name a few, retail electric shopping simply does not appear to reduce costs for customers."
At past ALEC meetings, EEI has also opposed resolutions against electric vehicle subsidies, helping to defeat one proposal backed by oil industry lobbyists at a March meeting in Grand Rapids, Mich.
A similar version of that resolution passed the energy panel on Friday by a narrow margin, but multiple sources told Utility Dive that EEI and other members pushed for the vote to be taken on secret paper ballots after votes at previous meetings were reported by the press.
EEI did not respond to requests for comment on the EV resolution or voting practices at the meeting. ALEC officials said they will release the vote totals in the coming weeks, but not information about who cast them.
Competition vs. incumbents
The debate over competition at ALEC reflects simmering debates over electricity choice and market design across a number of states.
In Nevada, for instance, incumbent utility NV Energy put up more than $60 million this year to defeat a ballot initiative that would have opened the state to retail electricity choice. As part of the campaign, the utility pledged to double its renewable energy capacity — winning the support of major environmental groups — but only if the initiative was defeated.
The issue is personal for Glenn, who had pushed to open the Michigan electricity market to more competition for retail customers. This August, Glenn lost a primary race for the state Senate to a candidate backed by incumbent utility Consumers energy.
"I'm the guy that stood up for market principles against the century-old monopoly system and they spent over a million dollars in a primary," he said. "This is the money that comes directly from ratepayers. It strikes me as comparable to compulsory unionism. There were a lot of people who voted for me who threw their compulsory payment to Consumers Energy because they had no choice about where to [purchase] their electricity."
Consumers has publicly acknowledged it contributed $2,500 to Glenn’s opponent, but said it does not know how any of its contributions to Citizens for Energizing Michigan's Economy, a nonprofit political action group, were used in the election.
Glenn said those sorts of utility tactics are what keep many otherwise conservative legislators from supporting more competition in the utility sector, and blamed the failure of his resolution on the industry marshaling opposition against it at the meeting.
"I also understand there are entire state delegations that are here whose ticket was paid for by a utility," Glenn said. "I specifically can't confirm one [company] or the other, but that's what I'm told."
Glenn said that he and his allies will aim to reintroduce the competition resolution at future ALEC meetings and push for further deregulation in the states. He also said they would make another attempt to pass a resolution against any bailout of coal and nuclear plants from the federal government. That initiative was tabled by its backers because not enough of its supporters were in attendance at the ALEC meeting.
"We wanted to make sure that our players were all here," said Larry Ward, Midwest regional director of the Conservative Energy Network, an ALEC member that supports the resolution. "It will be taken up in the future."
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