Michigan: Consumers Energy spends millions to unseat 2 pro-consumer legislators, derail free analog meter bill, keep utility monopoly; report exposes lobbying front group

The Energy and Policy Institute report follows this overview article.

From Michigan Radio

by Tracy Hamilton
June 12, 2018

In the past four years, Consumers Energy gave $43 million to a political lobbying group, Citizens for Energizing Michigan’s Economy, according to research by the Energy and Policy Institute.

That’s a huge sum for a utility to spend on political activity — as much as the entire electric utility industry spent on federal campaigns since 2015.

Matt Kasper of the Energy and Policy Institute found that the lobbying group failed to disclose all of the money to the IRS.

But he says it’s clear what a lot of it’s being used for: To help elect opponents of two legislators that Consumers wants out of office — Gary Glenn and Tom Barrett.

“We almost did a double take to make sure, is this really what’s happening?” he says. “But it is.”

Both Barrett and Glenn favor competition in the energy market.  

Officers with the lobbying group did not respond to requests for interviews. The Michigan Secretary of State, which oversees campaign spending, says it has not received a complaint about Citizens for Energizing Michigan’s Economy…

From Energy and Policy Institute

The report on their website includes annual reports, tax reporting, a table of contributions, and other related docs

Consumers Energy contributed $43.5 million over four years to Citizens for Energizing Michigan’s Economy

But that’s not what Citizens for Energizing Michigan’s Economy reports on their IRS 990 – so where’s the money?

by Matt Kasper

Documents filed by Consumers Energy with the Michigan Public Service Commission show that the investor-owned utility has made over $43.5 million in political contributions to Citizens for Energizing Michigan’s Economy (CEME) since its creation four years ago. Almost half of that amount was contributed last year. Crain’s Detroit was the first to break the news of the millions of dollars that the utility has dolled out to the group.

However, CEME, a 501(c)(4) organization, reports in its annual filings with the Internal Revenue Service (IRS) for the years 2014, 2015, and 2016 that is has received only $8.5 million in revenue. Consumers Energy contributed a total of $23.5 during those years, which suggests that at least $15 million has not been reported to the IRS by the 501(c)(4) organization, and needs to be explained.

When asked to confirm the CEME funding and to explain the discrepancies between the MPSC reports and the IRS 990s, Consumers Energy spokesperson Katie Carey told the Energy and Policy Institute that their contributions to Citizens for Energizing Michigan’s Economy came from the company in the form of non-customer, shareholder dollars and can’t speak to their tax reporting.

CEME working to influence voters

CEME was created in 2014 as part of Consumers Energy and DTE Energy efforts to prevent the legislature from passing deregulation legislation. DTE Energy contributed $332,550 that year according to its filing with the MPSC but has since not detailed specific groups in the annual reports.

CEME aired misleading ads that warned of rolling blackouts if the state did deregulate, and has continued to run ads pushing back against deregulation as well as ads supporting candidates or promoting specific energy legislation.

According to the Michigan Campaign Finance Network, Citizens for Energizing Michigan’s Economy is targeting State Rep. Gary Glenn, chairman of the House Energy Policy Committee, and State Rep. Tom Barrett by promoting their competitors in the respective primary races. 

Rep. Glenn has supported restoring the old net metering rates, lifting the cap on customers that can participate in the program, and favors deregulation – all policies that would create competition with the utilities. Rep. Barrett is also on the energy committee and recently criticized the MPSC for siding with the utility industry in ruling to end the state’s net metering program.

[Reps. Glenn and Barrett are co-sponsors of House Bill 4220 which provides free analog meter choice for the public — https://www.legislature.mi.gov/documents/2017-2018/billintroduced/House/pdf/2017-HIB-4220.pdf ]

$43.5 million is an unmatched amount of political spending

The $43.5 million that Consumers Energy has contributed to CEME is far more than the utility has reported in other political spending. It’s over 40 times greater than the total amount of money the utility’s PAC has contributed to Michigan candidates, their total state lobbying expenditures, and is nearly 10 times larger than its federal government lobbying over the same four year period.

The company has not even spent close to that amount of money on federal campaigns. According to the Center for Responsive Politics, Consumers Energy has contributed $3.97 million in federal races since 1990.

The closest dollar figure to compare is $45.3 million, which is the total amount of money the entire electric utility industry has spent on federal campaigns since 2015.

Consumers Energy nearly faced a shareholder revolt over its political spending at its May 2018 shareholder meeting, and that was before the full extent of its funding of CEME was first reported. A shareholder resolution nearly passed with 45% support that would have required Consumers Energy to make public all of its expenditures made to influence the public. The same resolution received 36% support in 2017. Each year the board of directors recommended their shareholders reject the proposal.

CEME directors have been Consumers Energy employees

Consumers Energy spokesman recently told Crain’s Detroit that they don’t know what CEME spends its money on because it is an independent organization and was then unable to provide additional information.

However, a Consumers Energy executive was a director for the organization since its creation and other registered officers are also connected to the utility.

Since 2014, CEME’s IRS 990s list David Mengebier as the vice president. Mengebier retired in October 2017 as Consumers Energy’s senior vice president of governmental, regulatory, and public affairs, and was the president of the Consumers Energy Foundation, which means for almost four years a current utility executive was a director of CEME. Mengebier is currently CEO of the philanthropic organization, the Grand Traverse Regional Community Foundation.

Mengebier told the Energy and Policy Institute, “I’m no longer a member of the organization so it wouldn’t be appropriate for me to comment.”

A September 2017 document filed with the Michigan Secretary of State’s office reveals that a new officer was recently added to the organization – former Consumers Energy Vice President of Strategy and Research Ronn Rasmussen. He was also the utility’s vice president of rates and regulation for a number of years. The same document lists Mengebier as the vice president.

The IRS 990s also list Rhoda Tinkham as the organization’s secretary and treasuer. Tinkham is a Consumers Energy retiree and it is unclear what position she held, but she is the current scholarship chair of Consumers Energy’s retirees organization, The Jacksonians. She did not respond to questions about the discrepancies between the 990s and MPSC annual reports.

Howard Edelson is listed as the organization’s president. Edelson managed the utility-funded campaign to oppose the 2012 renewable energy standard ballot initiative. Consumers Energy contributed over $12 million to the campaign that year. He is currently president of the Edelson Group. He also did not respond to Energy and Policy Institute’s inquiry.

Matt Kasper is the Research Director at the Energy & Policy Institute. He focuses on defending policies that further the development of clean energy sources. He also frequently focuses on the companies and their front groups that obstruct policy solutions to global warming. Before joining the Energy & Policy Institute, Matt was a research assistant at the Center for American Progress where he worked on various state and local policy issues, including renewable energy standards. His work has appeared in The Guardian, the New York Times, the Washington Post, and other outlets.

For the full report with documents and tax filings:
http://www.energyandpolicy.org/consumers-energy-contributed-43-million-dollars-to-citizens-for-energizing-michigans-economy/

Sources:

http://michiganradio.org/post/political-spending-consumers-energy-questioned

http://www.energyandpolicy.org/consumers-energy-contributed-43-million-dollars-to-citizens-for-energizing-michigans-economy/

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