The agreement with Consumers Energy follows a complaint about a nonprofit group linked to the utility.
This article by Andy Balaskovitz appeared on the Energy News Network, January 28th, 2019.
In an unprecedented move, the Michigan Public Service Commission has prohibited a major utility from using corporate dollars to fund nonprofit political advocacy groups.
The deal with Consumers Energy follows a contentious election involving outsized spending from energy-focused nonprofit groups supporting regulated utilities. Sources say it was the commission’s attempt to rein in the practice following complaints about one group’s political spending in the 2018 election.
“This is recognition that this is a serious problem, and it’s a big step in the right direction,” said Patrick Anderson, a tax policy expert and CEO of the Anderson Economic Group. In July, Anderson filed a formal complaint with the IRS alleging that a Consumers-linked organization misused its tax-exempt status for political purposes. The IRS has not formally responded to the complaint.
Under a Jan. 9 settlement agreement between Consumers, commission staff and more than a dozen other groups as part of a broader rate case, the utility agreed that it “will not contribute any of its corporate treasury monies to an Internal Revenue Code 501c(4) entity or an Internal Revenue Code 527 entity” during the current rate case. Consumers agreed it won’t file a new rate case until at last Jan. 1, 2020. Cases take at least 10 months to resolve.
Some state lawmakers and utility watchdog groups have pointed to Consumers’ funding of Citizens for Energizing Michigan’s Economy, a 501c(4) nonprofit social welfare group. Consumers has contributed $43.5 million to CEME since 2014, including $20 million in 2017. CEME pays for issue advocacy, particularly targeting lawmakers unfriendly to the state’s regulated market. MORE…