BEFORE THE NEW YORK STATE
PUBLIC SERVICE COMMISSION

_________________________________________
)
Proceeding on Motion of the Commission
)
as to the Rates, Charges, Rules and Regulations )
of Niagara Mohawk Power Corporation d/b/a )
National Grid for Electric Service
)
_________________________________________ )

Case No. 17-E-0238

_________________________________________
)
Proceeding on Motion of the Commission
)
as to the Rates, Charges, Rules and Regulations )
of Niagara Mohawk Power Corporation d/b/a )
National Grid for Gas Service
)
_________________________________________ )

Case No. 17-G-0239

DIRECT TESTIMONY OF ROBERT HABERMANN
ON BEHALF OF PACE ENERGY AND CLIMATE CENTER

August 25, 2017

 Case Nos. 17-E-0238 & 17-G-0239
1

Pace: Robert Habermann

I. INTRODUCTION AND QUALIFICATIONS

2

Q.

Please state your name and business address.

3

A.

My name is Robert Habermann. My business address is 78 North Broadway, White

4

Plains, New York 10603.

5

Q.

What is your occupation?

6

A.

I am the Equitable Access for Sustainable Energy (“EASE”) Fellow with the Pace Energy

7

and Climate Center (“Pace”).

8

Q.

What is Pace?

9

A.

Pace is a non-partisan, legal and policy think tank, developing cost-effective solutions to

10

complex energy and climate challenges. Pace provides legal, policy, and stakeholder

11

engagement leadership in New York, the Northeast, and other jurisdictions. Located on

12

the campus of Elisabeth Haub School of Law at Pace University, Pace engages and

13

leverages a strong legal faculty and student body in its work to transform the way society

14

supplies and consumes energy. Pace has many years of success in working with and

15

supporting the New York State Energy Research and Development Authority, the New

16

York State Public Service Commission (“Commission”), and the New York State

17

Department of Environmental Conservation. Pace’s work also includes strategic

18

engagement with state legislative and executive officials, as well as participating in key

19

Commission proceedings. In these capacities, Pace has had the opportunity to form long-

20

lasting partnerships within the community of non-governmental organizations that work

21

in the field of energy while engaging and leveraging a strong legal faculty and student

22

body in its work.

23

Q.

Please summarize your background and experience.

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 Case Nos. 17-E-0238 & 17-G-0239
1

A.

Pace: Robert Habermann

I began working for Pace as EASE Fellow in August 2017. Previously, I was a Project

2

Finance Developer for AMP Ventures, LLC, focused on solar photo-voltaic project

3

development in Africa, where I worked on, among other things, a first-of-its-kind 30-

4

megawatt distributed solar energy transaction in Nigeria. During more than five years

5

working in project financing and renewable energy development, I performed in-depth

6

due diligence on commercial clients and suppliers, conducted complex financial and

7

operational analysis, and structured long-term contractual agreements. I hold a J.D. from

8

Washington University Law and a B.A. in Political Science from Tulane University. I am

9

currently pursuing an L.L.M. degree in Environmental Law at the Elisabeth Haub School

10

of Law at Pace University. A detailed resume is attached as Exhibit RH-1.

11

Q.

On whose behalf are you testifying in this proceeding?

12

A.

I am testifying on behalf of Pace in this proceeding.

13

Q.

Have you previously testified before this Commission or any other public utility

14

commission?

15

A.

No.

16

Q.

What is the purpose of your testimony?

17

A.

I offer testimony questioning the request of Niagara Mohawk Power Company d/b/a

18

National Grid (the “Company” or “NMPC”) to recover electric and gas trade association

19

dues expenses in its proposed rates.

20

II. DISALLOWING RECOVERY FROM RATEPAYERS OF TRADE ASSOCIATION

21

DUES THAT FUND ADVOCACY CONTRARY TO RATEPAYERS’ INTERESTS

22

Q.

Please summarize your testimony and recommendations.

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 Case Nos. 17-E-0238 & 17-G-0239
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A.

Pace: Robert Habermann

This testimony addresses the Company’s “above-the-line” trade association dues—i.e.,

2

dues recovered from ratepayers that, unbeknownst to most ratepayers, may be subsidizing

3

advocacy with which they disagree and that is contrary to their interests. While the

4

shareholders of the Company pay trade association lobbying expenses (the “below-the-

5

line” portion of dues), the remainder of the dues are categorized as an operating expense

6

in the Company’s rate request.1 Groups such as the Edison Electric Institute (“EEI”) and

7

American Gas Association (“AGA”), which receive a majority of their revenue from

8

utility membership dues, are highly political in nature and promote policies that are not

9

always in the best interests of ratepayers. To protect the interests of ratepayers, and to

10

ensure just and reasonable rates, I recommend that the total amount of requested revenue

11

requirement of $455,318.03 in the electric rate case and $109,028.67 in the gas rate case

12

be disallowed. These expenses must be disallowed because the Company has failed to

13

demonstrate that the costs associated with EEI and AGA membership dues are limited to

14

activities that benefit ratepayers and therefore are just and reasonable.

15

Q.

What is EEI, and what services does the trade association provide to its members?

16

A.

EEI is a trade association with a large operating budget ($90 million in 2015) that

17

represents U.S. investor-owned electric companies in all 50 states.2 EEI describes its

18

mission as providing public policy leadership, industry data, business intelligence,

19

conferences and forums, and products and services to the utility industry.3 EEI also

1

See Resp. to DPS-PF48, Attach. 1 (a copy of which is annexed hereto as Ex. RH-2).
David Anderson et al., Energy & Policy Inst. (“EPI”), Paying for Utility Politics 4 (2017)
(“EPI, Paying for Utility Politics”), available at http://www.energyandpolicy.org/wpcontent/uploads/2017/05/Ratepayers-funding-Edison-Electric-Institute-and-otherorganizations.pdf. A copy of the Executive Summary of the EPI, Paying for Utility Politics
report is annexed hereto as Exhibit RH-3.
3
See EEI, About EEI, http://www.eei.org/about/Pages/default.aspx (last visited Aug. 23, 2017).
2

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Pace: Robert Habermann

1

provides a Mutual Assistance Program in which member utilities can access assistance

2

during storms to restore power to affected customers.4 Most of EEI’s work involves

3

promoting its utility members’ policy agenda and bottom-line through political action and

4

legal intervention.5

5

Q.

What is AGA and what services does the trade association provide for its members?

6

A.

AGA is a trade association that represents more than 200 natural gas supply companies in

7

the United States. AGA supports the use and production of natural gas through regulatory

8

and policy intervention, development assistance, exchange of information, and

9

conferences and workshops.6 AGA advocates for the increased development of pipeline

10

infrastructure.7 AGA also is credited with positioning natural gas as a “bridge fuel,”

11

allowing for natural gas to be publicly viewed as part of the solution to climate change.8

12

Q.

Is the Company a member of EEI or AGA?

13

A.

Yes, the Company is a member of both EEI and AGA.9

14

Q.

Does the Company pay its membership dues directly to EEI and AGA?

15

A.

No. The dues are paid by the parent company, National Grid USA, which then allocates

16
17

NMPC’s share of dues to the Company.
Q.

18

Does the Company seek to recover any portion of its allocated share of EEI and
AGA membership dues from ratepayers?

4

See EEI, Mutual Assistance, http://www.eei.org/issuesandpolicy/electricreliability/
mutualassistance/ (last visited Aug. 23, 2017).
5
See EPI, Paying for Utility Politics at 4.
6
See AGA, Our Mission, https://www.aga.org/about/our-mission (last visited Aug. 23, 2017).
7
See AGA, 2017 Playbook, Natural Gas: Moving Our National Forward at 24–27,
http://playbook.aga.org (last visited Aug. 23, 2017).
8
See Jeff Share, Dave McCurdy Brings Strong Credentials to AGA (Dec. 2011),
https://pgjonline.com/2011/12/01/dave-mccurdy-brings-strong-credentials-to-aga/.
9
Resps. to PACE-6 RV-2 & PACE-6 RV-3 (copies of which are annexed hereto as Ex. RH-4).
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 Case Nos. 17-E-0238 & 17-G-0239
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A.

Pace: Robert Habermann

Yes, the Company seeks to recover EEI and AGA membership dues from ratepayers,

2

excluding the amounts the EEI and AGA define as lobbying.10 National Grid’s total

3

membership dues for calendar year 2016 were $1,294,235 for EEI11 and $1,022,765 for

4

AGA.12 Of that total, the allocated share the Company seeks to recover from ratepayers in

5

the instant proceeding is $455,318.03 for EEI dues and $109,028.67 for AGA dues.13

6

Q.

How does the Company determine what portion of the EEI and AGA dues to

7

recover from ratepayers and what portion of the dues to recover from

8

shareholders?

9

A.

The Company “apportions expense according to guidance issued by the invoicing

10

organization” that identifies the below-the-line lobbying expenses and above-the-line

11

non-lobbying expenses.14

12

Q.

13
14

What portion of EEI’s budget is allocated toward lobbying activity as compared
with other activities?

A.

The National Association of Regulatory Utility Commissioners (“NARUC”) conducted

15

its last annual audit of EEI data in 2005. In that audit, more than 55% of EEI’s

16

expenditures went to the following categories: legislative advocacy; regulatory advocacy;

17

and legislative and regulatory policy research.15 We do not know whether EEI treated all

10

See Ex. __ (Revenue Requirements Panel (“RRP”)-11); Workpapers to Ex. __ (RRP-3),
Schedule 1 at 63 (listing expenses related to AGA membership under Activity AGA349); id. at
61 (listing expenses related to EEI membership under Activity AG0009); Ex. RH-4 (Resps. to
PACE-6 RV-2 & PACE-6 RV-3).
11
Resp. to PACE-6 RV-4 (a copy of which is annexed hereto as Ex. RH-5).
12
Resp. to PACE-6 RV-5 (a copy of which is annexed hereto as Ex. RH-6).
13
See Ex. RH-2 (Resp. to DPS-PF48), Attach. 1.
14
Id. at Response (b).
15
See EPI, Paying for Utility Politics at 33 tbl.11.
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Pace: Robert Habermann

1

of that spending as lobbying. The Company has not submitted a more recent audit in this

2

proceeding.

3

Q.

Why is it important to know how EEI treats its expenditures?

4

A.

Reliable data on EEI spending activity is necessary for reasonable allocations of expenses

5

between lobbying and non-lobbying activity. Absence of that data presents a significant

6

challenge for stakeholders, ratepayers, and regulatory authorities who seek to protect

7

ratepayers from funding lobbying and any non-lobbying advocacy that may not be in

8

their best interest.

9

Q.

10
11

Why is it important to determine what activities and policies the EEI and AGA
ratepayer-funded dues support?

A.

The majority of New Yorkers support renewable energy, the reduction of greenhouse gas

12

(“GHG”) emissions, and New York’s Reforming the Energy Vision (“REV”) initiative.16

13

New York energy policy is committed to a clean, distributed, affordable energy future,

14

while EEI and AGA advocacy and policy positions have been demonstrably inimical to

15

the type of clean energy goals New York hopes to achieve. REV was launched to

16

champion renewable energy, grid modernization, the reduction of carbon emissions, and

17

a safer, more resilient, affordable, and reliable electricity grid for the benefit of New

18

York’s citizens. The development of more distributed renewable energy assets and

19

energy efficiency programs, coupled with a reduction in the expansion of fossil fuels and

16

A 2016 survey of New York voters found that more than 90% of New Yorkers strongly
support solar power, more than four out of five New Yorkers support the REV initiative, and a
majority of them view global warming as a serious problem. See The Nature Conservancy, New
York Voter Attitudes on a Cleaner Energy Future (2016) (slides 4–7),
https://www.nature.org/ourinitiatives/regions/northamerica/unitedstates/newyork/climateenergy/new-york-voter-attitudes-on-clean-energy.pdf (a copy of select survey results is annexed
hereto as Ex. RH-7).
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 Case Nos. 17-E-0238 & 17-G-0239

Pace: Robert Habermann

1

GHG emissions, provide direct and quantifiable benefits to ratepayers throughout the

2

State.

3

Q.

4
5

What dues-funded EEI and AGA activities are in the interest of New York
ratepayers?

A.

Examples of association activities clearly in the interests of ratepayers include: EEI and

6

AGA sponsored workforce education and training modules, knowledge campaigns

7

centered around electrical and gas safety, and EEI’s Mutual Assistance Program that

8

combines utility resources during extreme weather to restore power to customers.

9

Q.

So, what is the problem with above-the-line trade association dues?

10

The EEI and AGA act as advocacy organizations in supporting a policy agenda contrary

11

to a many ratepayers’ interests or personal beliefs, and the policies of the State of New

12

York. In one example, over the period of 2008 to 2015, EEI donated $142,667 to the

13

American Legislative Exchange Council (“ALEC”), of which AGA is a member as

14

well.17 ALEC, a politically conservative 501(c)(3) organization, provides state legislators

15

with “model bills” to oppose renewable energy standards and overturn laws that reduce

16

carbon dioxide emissions.18

17

Q.

Are you recommending that the Company not be allowed to indirectly fund ALEC

18

or other anti-renewable energy advocacy organizations through its contributions to

19

EEI and AGA member dues?

17

EPI, Paying For Utility Politics, at 17.
See Suzanne Goldenberg & Ed Pilkington, ALEC Calls for Penalties on ‘Freerider’
Homeowners in Assault on Clean Energy, The Guardian, Dec. 4, 2013,
https://www.theguardian.com/world/2013/dec/04/alec-freerider-homeowners-assault-cleanenergy.
18

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 Case Nos. 17-E-0238 & 17-G-0239
1

A.

Pace: Robert Habermann

No. I accept that the Company may decide that it is in the best interests of shareholders to

2

join in these agendas. My testimony is that ratepayers should not be required to support

3

these organizations, directly or indirectly, through EEI and AGA dues, and that the

4

Company must produce sufficient and competent evidence that any dues payments that it

5

seeks to recover from ratepayers through the revenue requirement do not go toward these

6

activities.

7

Q.

What other issues has EEI supported that conflict with ratepayers’ interests?

8

A.

EEI maintains an ongoing effort to fuel doubt about climate science and oppose limits on
carbon emissions.19 EEI advances this goal primarily by funding special interest groups

9
10

like the Utility Air Regulatory Group (“UARG”) and ALEC.20 UARG recently submitted

11

comments to the Trump Administration encouraging the repeal and replacement of the

12

Clean Power Plan, broadly arguing against EPA’s regulations requiring lower carbon

13

emissions from utilities.21 In contrast, the State of New York’s Office of the Attorney

14

General, representing the people of New York, led a coalition of states in support of the

15

Clean Power Plan.22

19

See EPI, Utilities Knew: Documenting Electric Utilities’ Early Knowledge and Ongoing
Deception on Climate Change from 1968–2017 at 7 (2017) ( “EPI, Utilities Knew”), available at
www.energyandpolicy.org.
20
In a 2015 case before the Indiana Utility Regulatory Commission (“IURC”), testimony
revealed that $173,612 of EEI annual dues were paid to UARG. See Verified Direct Testimony
of Derric J. Isensee, Att. 6-B, at 37, Cause No. 44688 (IURC Oct. 1, 2015),
https://assets.documentcloud.org/documents/3111258/Northern-Indiana-Public-ServiceCompany-Dues.pdf.
21
See Letter from Andrea B. Field, Counsel, UARG, to Samantha K. Dravis, EPA, 5 (May 12,
2017), submitted in EPA, Docket ID EPA-HQ-OA-2017-0190-0042, available at
https://www.regulations.gov/contentStreamer?documentId=EPA-HQ-OA-2017-019040140&attachmentNumber=1&contentType=pdf.
22
See Press Release, New York State Attorney General Eric T. Schniederman, A.G.
Schneiderman Leads Coalition of States and Localities in Opposing Pres. Trump’s Efforts to
9

 Case Nos. 17-E-0238 & 17-G-0239
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Pace: Robert Habermann

EEI also has directly challenged state programs for rooftop solar and distributed

2

energy resources (“DER”). In 2014, EEI filed comments to the Arizona Corporation

3

Commission to challenge Arizona’s net-metering policy.23 EEI advocated for a change in

4

the value of distributed resources, arguing, among other things, that “grid security and

5

reliability should not be considered in rates,” that”environmental and social externalities

6

should not be included in [distributed generation (“DG”)] rates,” and that “DG systems

7

should not be compensated directly for reducing market prices.”24 To support its position,

8

the EEI ran $500,000 worth of television ads attacking solar customers.25

9

Q.

What issues has AGA supported that conflict with ratepayers’ interests?

10

A.

AGA maintains an ongoing funding effort to support the growth and promote the use of

11

natural gas in the United States.26 Although natural gas emits fewer GHGs during the

12

combustion process compared with other fossil fuels like coal and oil, a significant

13

amount of methane is released throughout the natural gas life cycle, from extraction to

14

transportation and distribution. As a result, natural gas has a significant GHG impact. In

15

addition, natural gas historically has been characterized by volatile commodity prices,

16

and given this volatilty, expanding gas service can have a direct, negative impact on

17

ratepayers. Furthermore, natural gas is not guaranteed to remain cheap for the useful life

Dismantle the Clean Power Plan (Mar. 28, 2017), https://ag.ny.gov/press-release/agschneiderman-leads-coalition-states-and-localities-opposing-pres-trumps-efforts.
23
Comments of the Edison Electric Institute, Value & Cost of Distributed Generation (Including
Net Metering), Docket No. E-00000J-14-0023 (Ariz. Corp. Comm’n Feb. 14, 2014), available at
http://docket.images.azcc.gov/0000151239.pdf (formatting altered).
24
Id. at 9–10.
25
See Adam Browning, Edison Electric Institute Really Does Not Want You to Go Solar,
Greentech Media, Feb. 28, 2014, https://www.greentechmedia.com/articles/read/in-rare-publicfiling-edison-institute-downplays-value-of-solar-for-arizon; see also EEITV, We All Rely on the
Electric Grid, YouTube (Nov. 3, 2013), https://www.youtube.com/watch?v=Ut1_PosSLtk.
26
See Jennifer Yachnin, American Gas Association Seeking to Spread Its Influence Well Beyond
the Beltway, E&E Daily, Dec. 9, 2011, https://www.eenews.net/stories/1059957439.
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 Case Nos. 17-E-0238 & 17-G-0239

Pace: Robert Habermann

1

of the natural gas infrastructure investments that AGA supports. Taken together, natural

2

gas expansion is demonstrably not in the interest of ratepayers. My colleague, Karl R.

3

Rábago, provides further details on the impacts and drawbacks of natural gas system

4

expansion in his individual direct testimony on behalf of Pace.

5

Q.

What other issues contrary to ratepayer interests has AGA supported?

6

A.

AGA funded and launched Your Energy, which is a public relations campaign

7

masquerading as a grassroots effort to combat genuinely local opposition to pipelines and

8

gas in Virginia.27 In addition, AGA and EEI are members of the Utility Solid Waste

9

Activities Group (“USWAG”). USWAG addresses solid and hazardous waste issues on

10

behalf of utilities and trade associations, while pursuing a litigious agenda against

11

environmental rules and regulations that do not benefit a utility’s bottom line. For

12

example, the EPA Coal Combustion Residuals Rule places basic requirements on the

13

maintenance, cleanup, and groundwater monitoring of coal ash waste.28 USWAG is

14

petitioning the EPA for a stay of the rule, calling it “ill-conceived and burdensome.”29

15

This action is likely to harm a ratepayer through the reduced regulatory oversight and

16

increased risk of environmental and public health hazards.

17

Q.

18

Do any third-party regulatory organizations conduct oversight of utility EEI and
AGA dues?

27

Alexander C. Kaufman, Natural Gas Industry Brings a Fake Grassroots Movement Group to
Eastern Pipeline Fights, HuffPost, June 19 2017 (updated), http://www.huffingtonpost.com/
entry/natural-gas-pipeline-your-energy-virginia_us_593afeb1e4b0240268793e8d.
28
See Disposal of Coal Combustion Residuals from Electric Utilities, 80 Fed. Reg. 21,301 (Apr.
17, 2015).
29
See Lyndsey Gilpin, As Coal Ash Rules are Challenged, Activists Worry About Long-Term
Monitoring, Southeast Energy News, June 13, 2017, http://southeastenergynews.com/
2017/06/13/as-coal-ash-rules-are-challenged-activists-worry-about-long-term-monitoring/.
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 Case Nos. 17-E-0238 & 17-G-0239
1

A.

Pace: Robert Habermann

No, there is no regulatory oversight of the allocation of trade association membership

2

dues today. From the 1980s to the early 2000s, NARUC conducted annual audits of trade

3

association financial records through the Committee on Utility Oversight.30 The audits

4

persuaded NARUC regulators to direct utilities to collect a smaller portion of their EEI

5

and AGA dues from ratepayers.31 Once the Committee disbanded in the year 2005,

6

NARUC stopped auditing expenditure data. Recently, utilities have been seeking lower

7

than usual amounts from shareholders: Georgia Power proposed 29% of EEI dues as

8

below-the-line expenses in a 2016 filing,32 NV Energy proposed 16% in a 2015 filing,33

9

and Oklahoma Gas & Electric proposed 0% in a 2016 filing.34 Without transparency of

10

spending data, it is difficult to fully understand how EEI and AGA spend ratepayer funds.

11

The Commission is the best institution to address this issue in the absence of a

12

coordinated multi-state audit like that NARUC conducted.

13

Q.

How have other public utility commissions handled this issue?

14

A.

While I have not conducted a comprehensive survey of all states, commissions in several

15

states have held that the utility company bears the burden to provide evidence that

16

establishes that proposed rate recovery of above-the-line EEI dues benefit ratepayers. In

17

2013, The Utility Reform Network (“TURN”), a California-based advocacy organization

18

that represents consumers before the California Public Utilities Commission (“CPUC”),
30

See NARUC Bd. of Directors, Resolution Regarding Discontinuation of the Committee on
Utility Oversight (adopted Mar. 8, 2000), available at http://pubs.naruc.org/pub/5398B5432354-D714-51D3-90ACAB1DA952.
31
See EPI, Paying for Utility Politics, at 6.
32
See id. at 20.
33
See id. at 24.
34
See id. at 20–21; Responsive Test’y of Sharhonda Dodoo at 6 tbl.1, In re Okla. Gas & Elec.
Co., No. PUD 201500273 (Corp. Comm’n Okla. Mar. 21, 2016), available at
https://www.documentcloud.org/documents/3111578-Sharhonda-Dodoo-PUD-Testimony-OGEDues.html#document/p6/a318911.
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Pace: Robert Habermann

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succeeded in challenging the above-the-line EEI dues allocation proposed by Pacific Gas

2

& Electric Co. (“PG&E”).35 TURN argued that “EEI spends money on many other things

3

that do not fit the narrow definition of lobbying” but nevertheless could impair ratepayer

4

interests and therefore should not be funded by ratepayers.36 Based on TURN’s argument

5

and the most recent 2005 NARUC audited data, the CPUC decided to increase the

6

allocation of below-the-line dues from the 25% proposed by PG&E to 43.3%.37 In a later

7

Southern California Edison (“SCE”) case, SCE proposed to recover only 24% from

8

shareholders, while TURN requested that 100% of EEI dues be disallowed.38 In that

9

instance, the Administrative Law Judge (“ALJ”) agreed that SCE has “not shown that it

10

has removed all political or lobbying costs from its forecast.”39 In the ruling, the ALJ

11

proposed to increase the below-the-line allocation to 47.9% from SCE’s proposed 24%.40

12

In 2015, the Missouri Public Service Commission (“MO-PSC”) staff presented

13

testimony in support of disallowing all above-the-line EEI dues, stating: “Staff’s

14

recommendation to disallow the entire amount of EEI dues stems from [Union Electric

15

Co. d/b/a Ameren Missouri’s] failure to quantify these benefits between shareholders and

35

See EPI, Paying for Utility Politics, at 34–37.
William B. Marcus, Electric Generation and Other Results of Operations Issues for Pacific Gas
& Electric Co., Prepared Testimony on behalf of TURN at 68, In re Pacific Gas & Elec. Co.,
Appl’n No. 12-11-009 (Cal. Pub. Utils. Comm’n May 17, 2013), available at
https://assets.documentcloud.org/documents/3382426/TURN-PGE-Testimony-2014-RateRequest.pdf.
37
Proposed Decision Granting Compensation to The Utility Reform Network for Substantial
Contribution to Decision 14-08-032 at 8, In re Pacific Gas & Elec. Co., Appl’n No. 12-11-009
(Cal. Pub. Utils. Comm’n undated), available at https://www.documentcloud.org/documents/
3239245-COMPENSATION-to-TURN-for-SUBSTANTIAL.html#document/p8/a331970.
38
See EPI, Paying for Utility Politics, at 35–37.
39
Id. at 36.
40
See id.
36

13

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Pace: Robert Habermann

1

the ratepayers.” 41 MO-PSC staff noted that the MO-PSC had excluded all EEI dues in a

2

prior proceeding on the ground that “these payments have not been shown to produce any

3

direct benefit to the ratepayers.”42 After negotiations, the MO-PSC staff and Ameren

4

Missouri agreed to entry of a settlement order.43

5

Q.

6
7

What do you propose to ensure that ratepayers are not required to fund activities
from which they receive no benefit or by which they risk being harmed?

A.

The Company must provide sufficiently detailed information regarding the membership

8

dues cost allocation as an incident to its burden of producing sufficient evidence that its

9

requested rates are just and reasonable. This evidence must demonstrate that above-the-

10

line dues to EEI and AGA: (1) directly benefit ratepayers and (2) do not work contrary to

11

ratepayer interests. Due to the conflict of interest between those organizations and New

12

York ratepayers, and in the absence of a third-party audit in the record, it is not

13

reasonable to rely solely on an EEI or AGA invoice to support the necessary finding. The

14

data submitted by the Company therefore is inadequate to carry the Company’s burden of

15

demonstrating that its rates are just and reasonable or to confirm that ratepayers are not

16

being asked to pay for lobbying or political advocacy activities carried out by the EEI or

17

AGA.

18

Q.

19

What do you recommend that the Commission do in the face of this lack of
evidence?

41

Surrebuttal Test’y of Jason Kunst at 2, In re Union Elec. Co. d/b/a Ameren Missouri, Case No.
ER-2014-0258 (MO-PSC Feb. 6, 2015) (citation omitted), available at https://assets.document
cloud.org/documents/3320628/MO-PSC-Surrebuttal-Testimony-Dues.pdf.
42
Id. at 3 (quoting Report and Order, In re Union Electric Company, Case No. EC-87-114 (MOPSC)).
43
EPI, Paying for Utility Politics, at 31.
14

 Case Nos. 17-E-0238 & 17-G-0239
1

A.

Pace: Robert Habermann

Because the Company has not provided sufficient and competent evidence to support a

2

finding that the dues it is asking ratepayers to pay are a just and reasonable expense, I

3

recommend that the total amount of requested revenue requirement of $455,318.03 in the

4

electric rate case and $109,028.67 in the gas rate case be disallowed.

5

Q.

Does this conclude your testimony?

6

A.

Yes.

15

 Testimony of Robert Habermann

Exhibit 

Resume

Robert J. Habermann
14 Wheeler Rd • North Salem, NY 10560 • 212.641.0556 • robert.habermann@gmail.com

Education
Washington University Law, St. Louis, MO
Juris Doctorate, May 2012

Tulane University, New Orleans, LA
B.A. in Political Science, June 2006

Universidade Catolica, Lisbon, Portugal
International Business Law, 2011

Experience
AMP Ventures, New York, NY & Houston, TX
Renewable Energy Developer, September 2012 – Present
• Integral member of project sponsor team developing first-of-its-kind 30 MW distributed-gen solar energy
transaction in Africa with an initial rollout in Nigeria
o Structured and negotiated long-term lease agreements with multi-national oil, bank and telecom companies
o Wrote information memorandum and pitch book material which helped secure $30m equity term sheet
o Originated and negotiated US Government loan guarantee agreement for $70m+ in debt financing
o Conducted in-depth due diligence on commercial clients: including financial and operational analysis, site
visits and management and facilities review
o Maintained complex financial model used to evaluate various financing strategies, operational scenarios
and sensitivities during bank and investor due diligence
o Developed relationships with PV solar panel and battery suppliers and negotiated bulk pricing and
procurement
o Drafted Engineering, Procurement, and Construction contracts for contractor work
• Launching energy services company in Ghana providing solar power solutions for hospitals and larger businesses
o Worked on a foreign business incorporation and tax structure in coordination with local outside counsel
o Researched and wrote memorandum regarding local regulations, power contracts and customs duties
o Developed marketing material for clients and investors
• Supporting the ongoing development of mid-stage 40MW utility scale PV solar installation in Samburu, Kenya
• Designed a solar powered community for the PINE (Presidential Initiative for the North East) Initiative in Nigeria:
Created detailed design package and supplemental write up on container based construction, community
engagement measures and anti-terror prevention. Presented to Nigerian government officials.
The Sustainability Labs, New York, NY
Associate, October 2016 – Present
• Working under Dr. Michael Ben-Eli to expand the organization’s global footprint and refine current strategy
• Further develop sustainability initiatives and partnerships in New York, Israel, Costa Rica and the Galapagos
Islands (including the creation of “Labs” in each of those varied ecological zones)
• Synthesize complex academic material and ideas developed over ten years into a targeted pitch for foundation,
multinational and individual donors
Citigroup Global Markets, New York, NY
Legal Intern, Summer 2010
• Assisted in the interpretation and implementation of the SEC “circuit breaker” rule following the flash-crash event
• Performed research on internal surveillance and oversight procedures; identified potential insider transactions
• Collaborated with compliance and in-house legal to answer regulatory inquiries from the SEC and FINRA
LPL Financial Corporation, San Diego, CA
Advisory Business Consultant, October 2007 – June 2009
• Acted as financial advisor to the brokerage arm of a large insurance company; providing resources, strategy and
analysis
• Gained expertise in proprietary portfolio management tools; provided frontline service and training in use of such
tools
• Delivered equity research to insurance advisors; enabling the advisors to present such research to their client base
• Worked with close knit Custom Clearing Solutions team generating $60 million in revenue for year-end 2008

 

- 1 - 

 Additional Information
Volunteer Activities:
• charity:water, Field Volunteer, October 2013 – January 2014: First to participate in groundbreaking international
field program; including 1 month survey and report on individual clean water projects in Liberia. Visited 76
different sites across the country. Surveyed community members, pump technicians, local NGOs and government
officials. Organized transportation logistics and identified inconsistencies between information in NY office and
information on the ground, including pump malfunctions, GPS coordinate corrections and community access issues.
Presented findings to entire organization and mentored 7 future volunteers to help create successful program.
•

 

Africa Aid (now Switchboard), Program Manager, 2007 – 2009: Developed innovative Mobile Doctors Network
with team of volunteers, utilizing telecom technology to create medical networks for underserved populations in
West Africa. Lived and worked in Accra, Ghana for six months (January 2007 - June 2007) while collaborating
with Ministry of Health and medical community.

- 2 - 

 Testimony of Robert Habermann

Exhibit RH-2
Response to DPS-PF48 Attachment 1

Date of Request: September 1, 2016
Due Date: April 28, 2017

Request No. DPS-PF48
NMPC Req. No. NM Elec-PF48

NIAGARA MOHAWK POWER CORPORATION d/b/a National Grid
Response to Staff’s Pre-Filing Information Requests
Electric Utilities
Request for Information

SUBJECT: Other Expenses
For each response to the following questions (19 – 55), provide the requested information
for the historic period, the link period, the three preceding fiscal years, the first rate year
and the subsequent two rate years, unless the question states otherwise:
Request:
48. Dues, Industry Associations.
a. For each industry association/organization, provide by account for the test period,
dues for which the company is requesting recovery in its revenue requirement.
For each, describe the organization's purpose and provide any descriptive material
the company has concerning the organization's financial statements, annual
budget, and activities.
b. For each organization that engages in lobbying or advocacy activities, attempts to
influence public opinion, uses institutional or image building advertising, state the
company's best estimate of the portion of the organization's expenses devoted to
such activities. Explain and show how such estimates were derived.

Response:
a. See Attachment 1 for the corporate membership or dues incurred in the Historic Test
Year. Page 2 of the attachment contains a description of the associations and
organizations for which the Company incurred more than $1,000 in the Historic Test
Year.
b. Each organization identifies on its invoices the portion of its activities that are
lobbying/advocacy related and the portion that is related to the operation and
administration of the organization. The Company apportions expense according to
guidance issued by the invoicing organization.

Name of Respondent:
Vimal Shah

Date of Reply:
April 28, 2017

 Niagara Mohawk Power Corporation
d/b/a National Grid
Pre-Filing Data Response
Attachment 1 to DPS-PF48 NM-Elec PF48
Page 1 of 7

Note : T he following is a itemized listing of all Direct and Allocated membership fees expensed by Niagara Mohawk Power Corp

Row Labels
ADVANCED ENERGY ECONOMY
AMERICAN GAS ASSOCIATION
AMERICAN METAL MARKET
ASSOCIATION OF EDISON
BOARD OF BAR OVERSEERS
BRITISHAMERICAN BUSINESS NEW YORK
CORPORATE EXECUTIVE BOARD
CHWMEG INC.
COMMON GROUND ALLIANCE
CORENET GLOBAL INC.
EDISON ELECTRIC INSTITUTE (EEI)
ENVIRONMENTAL ENERGY ALLIANCE OF NY
ETHICS & COMPLIANCE OFFICER ASSOCIATION
INTERSTATE NATURAL GAS
NATIONAL MINORITY SUPPLIER
NETWORK OF EMPLOYERS FOR TRAFFIC
NEW YORK & NEW JERSEY MINORITY SUPP
NORTH AMERICAN ENERGY STANDARDS BOA
NORTHEAST BUSINESS GROUP
NYSE GOVERNANCE SERVICES INC
OPERATIONS TECHNOLOGY DEVELOPMENT
ORGANIZATION FOR INTERNATIONAL
OUR NATIONS ENERGY FUTURE COALITION
PEONY INC.
PRACTISING LAW INSTITUTE
REGION I INDUSTRY LIAISON GROUP INC
SOCIETY OF GAS LIGHTING
THE EXECUTIVE LEADERSHIP COUNCIL
THE NATIONAL UNDERWRITER COMPANY
US NATIONAL COMMITTEE-CIGRE
VERMONT CAPTIVE INSURANCE ASSOCIATION
WIRES
WOMEN PRESIDENTS EDUCATIONAL
Grand Total

NYELEC
9,440.00
1,030.32
4,208.67
220.74
1,065.60
14,260.62
1,750.00
273.02
335,595.98
11,720.00
1,776.00
3,376.30
518.47
1,421.60
2,340.80
4,262.40
1,516.36
596.55
4,333.44
174.94

55.52
507.60
133.20
888.50
401,466.63

December 2016
Niagara Mahowk Power Corp
NYGASD
NYTRAN
Grand Total
2,502.50
3,000.00
14,942.50
109,028.67
109,028.67
1,030.32
1,215.26
2,524.53
7,948.46
58.93
71.32
351.00
274.80
366.60
1,707.00
4,104.14
1,673.31
20,038.07
1,750.00
212.85
212.85
81.29
89.14
443.45
119,722.06
455,318.03
120.00
60.00
11,900.00
458.00
611.00
2,845.00
9,718.05
9,718.05
870.20
1,160.90
5,407.40
160.49
5.41
684.37
366.40
488.80
2,276.80
948.08
3,405.50
4,353.58
724.28
24.32
3,089.40
1,099.20
1,466.40
6,828.00
195,000.00
195,000.00
409.10
498.92
2,424.38
2,533.50
2,533.50
596.55
1,117.52
1,490.84
6,941.80
48.56
2.64
226.14
171.01
171.01
4,125.00
4,125.00
17.19
0.58
73.29
297.00
804.60
34.35
45.83
213.38
15,403.50
15,403.50
229.00
305.50
1,423.00
331,503.36

156,839.09

889,809.08

Note: The following is a itemized listing of all Direct and Allocated membership fees expensed by

 Niagara Mohawk Power Corporation
d/b/a National Grid
Pre-Filing Data Response
Attachment 1 to DPS-PF48 NM-Elec PF48
Page 2 of 7
Niagara Mohawk Power Corp
Vendor

ADVANCE ENERGY
ECONOMY

AMERICAN GAS
ASSOCIATION

AMERICAN METAL MARKET

ASSOCIATION OF EDISON

BOARD OF BAR OVERSSERS

BRITISHAMERICAN
BUSINESS NEW YORK

CHWMEG INC

Form 103

Description
ADVANCED ENERGY ECONOMY (AEE) is a national
association of business leaders who are making the global energy
system more secure, clean, and affordable. Advanced energy
encompasses a broad range of products and services that constitute
the best available technologies for meeting energy needs today and
tomorrow.
Founded in 1918, the American Gas Association (AGA) represents
more than 200 local energy companies that deliver clean natural
gas throughout the United States. Today, more than 68 million
residential, commercial and industrial customers across the nation
receive their reliable, affordable supplies of natural gas from AGA
members—and natural gas meets almost a quarter of America’s
energy needs.
American Metal Market (AMM) is an online provider of industry
news and metal pricing information for the
U.S. steel, nonferrous and scrap markets. Products include a daily
publication available in an electronic pdf, live news on the
publication's website, a hard-copy magazine and a series of weekly
newsletters covering niche
Founded by Thomas Edison and his associates in 1885, AEIC is
one of the oldest organizations in the electric energy
industry. AEIC encourages research and the exchange of technical
information and best practices through a committee structure,
staffed with experts from management of member
companies. AEIC committees exchange information, ideas and
solutions to succeed in the ever-changing electric industry.
The Board of Bar Overseers was established by the Supreme
Judicial Court in 1974 as an independent administrative body to
investigate and evaluate complaints against lawyers.
BritishAmerican Business is the preeminent business network for
executives at multinational corporations, international advisory
firms and emerging growth companies. Our members participate in
selective gatherings, forums, meetings and celebratory occasions
where they are able to build valuable relationships, exchange
insights, stimulate new ideas and gain business advantages.
CHWMEG, Inc. is a non-profit trade association comprised of
manufacturing and other "industrial" companies interested in
efficiently managing the waste management aspects of their
environmental stewardship programs. Their programs are based
upon their potential environmental liability related to the wastes
that are inherently generated by their companies' manufacturing
processes. Note that member companies always strive to reduce,

 Niagara Mohawk Power Corporation
d/b/a National Grid
Pre-Filing Data Response
Attachment 1 to DPS-PF48 NM-Elec PF48
Page 3 of 7
recycle, or reuse the wastes associated with their operations as a
first resort. However, the complete elimination of wastes generated
from their operations is not always feasible.

COMMON GROUND
ALLIANCE

CORONET GLOBAL INC

CORPORATE EXECUTIVE
BOARD

EDISON ELECTRIC
INSTITUTE

ENVIRONMENTAL ENERGY
ALLIANCE OF NY

Form 103

CGA is a member-driven association of 1,700 individuals,
organizations and sponsors in every facet of the underground
utility industry. Established in 2000, CGA is committed to saving
lives and preventing damage to underground infrastructure by
promoting effective damage prevention practices. CGA has
established itself as the leading organization in an effort to reduce
damages to underground facilities in North America through
shared responsibility among all stakeholders.
CoreNet Global NE is the premier association for corporate real
estate professionals, and the only one capable of convening the
entire industry. It has over 9,000 members around the world; this is
where colleagues, partners, competitors and future employers
come together to share ideas, do business, learn and socialize.
CEB is a best practice insight and technology company. CEB
equips senior leaders from organizations across countries with the
intelligence they need to respond quickly to evolving business
conditions. CEB helps them manage their talent, customers and
operations.
EEI provides public policy leadership, critical industry data,
strategic business intelligence, conferences and forums, and
products and services to the utility industry.
The Environmental Energy Alliance of New York, LLC has
electric and gas transmission and distribution, and electric
generation company members that provide energy services in the
State. For more than 15 years the Alliance has provided a forum
and has brought together a diverse and experienced group of
environmental, forestry, and engineering experts to address
regulatory and industry policy issues that are most effectively
approached on a statewide basis. EEANY and member company
staff interact with regulatory agencies, state and federal trade
associations and academia for continuous and timely information
transfer, an essential element to remain competitive. Our primary
purpose is to support and enhance the understanding of New York
State environmental regulatory initiatives in order to permit
member companies to more effectively formulate and achieve their
business goals and proactively advocate cost-effective
environmental regulations and policies.

 Niagara Mohawk Power Corporation
d/b/a National Grid
Pre-Filing Data Response
Attachment 1 to DPS-PF48 NM-Elec PF48
Page 4 of 7
Note: The following is a itemized listing of all Direct and Allocated membership fees expensed by
Niagara Mohawk Power Corp
Vendor

ETHICS & COMPLIANCE
OFFICER ASSOC

INTERSTATE NATURAL GAS

NATIONAL MINORITY
SUPPLIER
NETWORK OF EMPLOYERS
FOR TRAFFIC

NEW YORK & NEW JERSEY
MINORITY SUPP

NORTH AMERICAN ENERGY
STANDARDS BOA

Form 103

Description
The Ethics & Compliance Officers Association is an organization
that works to promote the practices of ethics and compliance
within the Ethics & Compliance Association. As part of the Ethics
and Compliance Initiative, the organization provides a community
where members exchange and communicate ideas. This
community of members include organizations and individuals such
as global practitioners, partners, thought-leaders and academicians.
The Interstate Natural Gas Association of America (INGAA) is a
trade organization that advocates regulatory and legislative
positions of importance to the natural gas pipeline industry in
North America.INGAA is comprised of 25 members, representing
the vast majority of the interstate natural gas transmission pipeline
companies in the U.S. and comparable companies in Canada.
INGAA’s members operate approximately 200,000 miles of
pipelines, and serve as an indispensable link between natural gas
producers and consumers.The interstate natural gas pipeline
industry has two principal federal regulators: the Federal Energy
Regulatory Commission (FERC) is responsible for the economic
regulation of pipelines, while the U.S. Department of
Transportation (DOT) Pipeline and Hazardous Material Safety
Administration oversees the industry's safety efforts.
The National Minority Supplier Development Council is the global
leader in advancing business opportunities for its certified Asian,
Black, Hispanic and Native American business enterprises and
connecting them to member corporations.
NETS was founded by the National Highway Traffic Safety
Administration (NHTSA) as an employer-led road safety
organization.
The New York & New Jersey Minority Supplier Development
Council, Inc. (The Council), established in 1973, is a vital link
between major corporations and minority business enterprises
(MBEs). Each year, member corporations have reported billions of
dollars spent with Council-certified Minority Business Enterprises.
Serving the New York and New Jersey region, The Council is one
of the 23 regional affiliates of the National Minority Supplier
Development Council, Inc. (NMSDC)
The North American Energy Standards Board (NAESB) serves as
an industry forum for the development and promotion of standards
that will lead to a seamless marketplace for wholesale and retail
natural gas and electricity, as recognized by its customers, business
community, participants, and regulatory entities.

 Niagara Mohawk Power Corporation
d/b/a National Grid
Pre-Filing Data Response
Attachment 1 to DPS-PF48 NM-Elec PF48
Page 5 of 7
NORHTEAST BUSINESS
GROUP

NYSE GOVERNANCE
SERVICES INC

OPERATIONS TECHNOLOGY
DEVELOPMENT

ORGANIZATION FOR
INTERNATIONAL
INVESTMENT

Northeast Business Group on Health (NEBGH) is an employer-led
coalition that empowers our members to drive excellence in health
and achieve the highest value in healthcare delivery and the
consumer experience.
NYSE Governance Services is the leading governance, compliance
and education solutions provider for companies and their boards of
directors. Through a complete set of technology-enabled and datadriven solutions designed to address compliance, accountability
and risk management, NYSE Governance Services helps
companies comprehensively build a culture of integrity from
employee to board level.
In a collaborative effort to develop advanced technologies for the
natural gas industry, U.S. utilities are combining interests,
expertise, and resources into focused R&D projects through
Operations Technology Development company (OTD). OTD is a
not-for-profit corporation led by 23 members who serve over 38
million natural gas consumers in the United States and Canada.
From integrity enhancements to efficiency improvements, OTD
developments are providing solutions to a wide-range of
challenges and changes for natural gas delivery systems. New
technology is playing a major and necessary role in helping
companies address integrity concerns, rising costs, and
environmental issues.
Created more than two decades ago, the Organization for
International Investment (OFII) is a non-profit business association
in Washington, D.C. representing the U.S. operations of many of
the world's leading global companies, which insource millions of
American jobs. OFII works to ensure the United States remains
the top location for global investment. As such, OFII advocates
for fair, non-discriminatory treatment of foreign-based companies
and promotes policies that will encourage them to establish U.S.
operations, increase American employment, and boost U.S.
economic growth.

Note: The following is a itemized listing of all Direct and Allocated membership fees expensed by
Niagara Mohawk Power Corp
Vendor

Form 103

Description

 Niagara Mohawk Power Corporation
d/b/a National Grid
Pre-Filing Data Response
Attachment 1 to DPS-PF48 NM-Elec PF48
Page 6 of 7

OUR NATIONS ENERGY
FUTURE COALITION

PEONY INC

PRACTISING LAW INSTITUTE

REGION I INDUSTRY LIAISON
GROUP INC

SOCIETY OF GAS LIGHTING

THE EXECUTIVE
LEADERSHIP COUNCIL
THE NATIONAL
UNDERWRITER COMPANY
US NATIONAL COMMITTEE
CIGRE

Form 103

The companies in the ONE Future Coalition are in the business of
finding, producing, processing, transporting, and delivering natural
gas to residential and industrial consumers across the United
States. Natural gas is primarily composed of methane — a clean
fuel that emits few air pollutants when burned in stove tops, or in
power plants to generate electricity, or to power vehicle
engines. However, when methane is emitted directly into the
atmosphere (and not burned), it is a potent greenhouse gas. By
reducing methane emissions across the natural gas supply chain,
ONE Future companies will deliver more value to our customers,
while also meaningfully reducing our greenhouse gas emissions.
MetalExchangeDirect.com is a service of Peony Online, Inc., the
world’s first online metal information provider. It offers a full
spectrum of information on primary and scrap metals.
PLI Privileged Membership provides training and CLE/CPE
courses. Through an enterprise-wide agreement, Privileged
Members receive unlimited access to PLI Seminars, Live
Webcasts, One-Hour Audio Briefings, and On-Demand Learning.
The Northeast Region Corporate Industry Liaison Group is a nonprofit organization consisting of private industry EEO/AA,
Diversity, and other HR leaders and professionals across multiple
industries in the Northeast, primarily in NY, NJ and CT region,
that partner, collaborate and maintain relationships with the
government to advance EEO/AA in private industry.
The Society of Gas Lighting Regular meetings provide an
opportunity to engage fellow members, and their guests, in
discussion about the issues of the day as they may affect the
development, transmission or distribution of natural gas. Invited
guest speakers provide interesting philosophies about the state-ofthe-art, and evolving, technologies to improve the delivery of
natural gas and make it more available, and affordable, for the
consumers they serve. Our quality speakers have included many
gas industry CEO's, Trade Industry Association Executives,
Members of Congress, State Legislators and a number of State and
Federal Regulatory Commissioners who provide our members with
their insight on how to more effectively operate in the competitive
energy environment.
The Executive Leadership Council (ELC) is the preeminent
membership organization for the development of global black
leaders.
The National Underwriter Company publishes a range of print, emedia, and software products for the insurance and financial
services industries
CIGRÉ, the International Council on Large Electric Systems,
brings together a worldwide network of technical experts,
executives, industry practitioners, educators, and government

 Niagara Mohawk Power Corporation
d/b/a National Grid
Pre-Filing Data Response
Attachment 1 to DPS-PF48 NM-Elec PF48
Page 7 of 7

VERMONT CAPTIVE
INSURANCE ASSOC

WIRES

WOMEN PRESIDENTS
EDUCATION

Form 103

representatives from over 90 countries to share technical expertise,
realworld practical experience and proven best practices from
every corner of the globe.
VCIA has provided three decades of effective legislative
representation for Vermont's captive industry. Continual
modifications to Vermont's captive statute allow captive insurance
companies to operate with maximum productivity and
efficiency.VCIA gathers information from its membership,
legislative committee and board of directors to stay aware of what
their key issues are.VCIA has legislative representation at the both
the state and federal levels in order to be informed and advocate
for positions that enhance the captive industry. Each year in
January, VCIA hosts Legislative Day at the Vermont State House
in order to strengthen our connections.
WIRES, a non-profit trade association with an international
membership, promotes investment in the North American electric
transmission system, robust and effective transmission solutions to
economic, environmental, and reliability challenges, and the
reduction or elimination of uneconomic barriers to transmission
development. This mission is accomplished through the
development and dissemination of information, strategic advocacy,
and innovation in regulatory, policy making, industry, and
educational forums.
WPEO is a dynamic community of certified women-owned
businesses. By providing Women’s Business Enterprise National
Council (WBENC) certification as a Women’s Business Enterprise
(WBE), WPEO helps you gain access to business opportunities
across America.

 Testimony of Robert Habermann

Exhibit RH-3
Executive Summary
Energy and Policy Institute, Paying for Utility Politics

 Paying for Utility Politics
How utility ratepayers are forced to fund the Edison Electric
Institute and other political organizations
May 2017

ENERGY AND POLICY INSTITUTE

1

 Paying for Utility Politics
How utility ratepayers are forced to fund the Edison Electric
Institute and other political organizations

May 2017

The Energy and Policy Institute is a watchdog organization working to expose
attacks on renewable energy and counter misinformation by fossil fuel and utility
interests. It does not receive funding from for-profit corporations or grants from
government agencies.

Authors
David Anderson
Matt Kasper
David Pomerantz

ENERGY AND POLICY INSTITUTE

2

 Table of Contents
Executive Summary

4

I. EEI’s Revenue, Expenses, Actions - and Why Ratepayers Shouldn’t Be Paying for It

8

II. Utility Companies Charging Ratepayers for EEI Dues

19

III. Other Political Organizations Receiving Ratepayer Money

25

III. Utility Pushback Against Oversight of Their EEI Dues

30

IV. Waning Regulatory Oversight of Ratepayers Paying for Political Membership Dues

39

Recommendations

41

Appendix I: Tables of Selected Utilities’ Requests for Ratepayer Money to Fund EEI Dues, and
Challenges to Requests
43
Appendix II: Sample Discovery Questions

ENERGY AND POLICY INSTITUTE

44

3

 Executive Summary
This report explores how regulated utility companies are including their Edison Electric
Institute (EEI) annual payments, along with payments to other trade associations, in their
operating expenses. The widespread practice forces ratepayers to pay for political and public
relations activities with which they may not agree, and from which they do not benefit. It also
has the effect of ratepayers subsidizing the political activities of EEI and other trade
associations. Utility commissions have a responsibility to protect ratepayers from paying for
industry groups and their political work along with public relations activities. But utilities have
become adroit at using EEI, and other organizations, to effectively and quietly influence policy
while sheltering their shareholders from the bulk of the associated costs. Almost no other
political organizations have the luxury of subsidization enjoyed by EEI and other
representatives of the regulated utility industry.

EEI’s Revenue, Expenses, Actions - and Why Ratepayers Shouldn’t Be Paying for it
EEI is an inherently political organization, and a powerful one. At $90 million in 2015, EEI’s
budget is the highest it has been in over a decade, an increase which the nation’s electric
ratepayers have funded. President Thomas Kuhn made $4.1 million in 2015 and is one of the
highest paid industry association executives. The association’s budget is primarily spent on
staff, many of whom spend a considerable amount of their time working to help member
utilities achieve desired policy and regulatory outcomes; not all of these activities are
considered lobbying under the definition EEI uses from the Internal Revenue Code, but their
actions are still political in nature.
In EEI’s own words, in 2015 it “rebalanced the public conversation through extensive earned
media efforts at the national and state levels” to address fixed-cost recovery, “educated
regulators and consumers advocates on key industry issues, including capital expenditures
that highlight the record-high investments in the grid”; and spent time to make sure that the
Federal Energy Regulatory Commission (FERC) “provides compensatory returns on equity
that recognize the risks associated with transmission construction.”1
These activities are intended to benefit utilities’ bottom line, and it is likely that none would
count in EEI’s definition of lobbying, which many utility commissions use to determine which
fees should not be borne by ratepayers.
1 EEI 2015 Results In Review available at http://big.assets.huffingtonpost.com/eeibooklet.pdf; EEI’s 2016 Wall Street Briefing available at
http://web.archive.org/web/20160715202904/http://www.eei.org/resourcesandmedia/industrydataanalysis/industryfinancialanalysis/
Documents/Wall_Street_Briefing.pdf.

ENERGY AND POLICY INSTITUTE

4

 Utility Companies Charging Ratepayers for EEI Dues
Electric utility ratepayers are paying for EEI’s activities when an investor-owned utility
includes payments to EEI (and other industry trade associations) as part of the company’s
cost of service in rate requests. Public utility commissioners generally approve a substantial
portion of these dues with only minimal oversight, with some notable exceptions. Utility
ratepayers are usually unaware that a portion of their electricity bill is going to subsidize EEI.
In Florida Power & Light’s 2016 rate request, for example, the utility revealed that its
ratepayers are on tap to pay more than $9.5 million in EEI dues from 2015 to 2018.2 These
EEI dues went unchallenged during the Florida Public Service Commission’s consideration of
the utility’s request to raise rates on ratepayers. A table listing examples of more than two
dozen companies recovering their EEI dues from ratepayers is included in an appendix of this
report.
Other Political Organizations Beyond EEI Receive Utility Ratepayers Money
EEI is not the only political organization that receives money from utility ratepayers. The
American Gas Association, Nuclear Energy Institute, and the U.S. Chamber of Commerce,
for example, are all groups that are often included in rate requests so that ratepayers pay for
the utility’s annual membership fees. Given how these organizations promote fracking and
natural gas infrastructure,3 propose bailouts for nuclear power plants,4 and spread
misinformation regarding the science of climate change,5 they are also all political in nature.
An examination of Wisconsin Public Service Corporation classification of industry association
dues, for example, reveals that the utility proposed that its ratepayers help pay for not only
the American Gas Association and the U.S. Chamber of Commerce membership fees, but
also both the Republican and Democratic Governors Associations, and the Republican State
Leadership Committee.6

Florida Power & Light Industry Association Dues (MFR C-15 draft) available at https://drive.google.com/file/d/
0B-0ZwtRThY3LVjRjSVVPTjZ6N28/view
2

American Gas Association, “Responsible Natural Gas Development” available at https://www.aga.org/environment/responsible-naturalgas-development
3

Nuclear Energy Institute, “Incentives for Energy Production” available at https://www.nei.org/Issues-Policy/Economics/Incentives-forEnergy-Production
4

Union of Concerned Scientists, “Who Stands with the U.S. Chamber of Commerce on Climate Change? New Data Says Few (Still)”
available at http://blog.ucsusa.org/gretchen-goldman/who-stands-with-the-u-s-chamber-of-commerce-on-climate-change-new-data-saysfew-still-788
5

Wisconsin Public Service Corporation Governmental Relations/Memberships (Docket 6690-UR-124) available at https://
www.documentcloud.org/documents/3227546-Wisconsin-Public-Service-Corporation-Dues.html
6

ENERGY AND POLICY INSTITUTE

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 Often these payments are tucked in among industry association dues payments to less
political institutions that have been recognized as providing beneficial services, such as the
Electric Power Research Institute or North American Electric Reliability Corporation.
Utility Companies Push Back Against Oversight of Their EEI Dues
When third-party organizations or public service commission staffs have attempted to protect
ratepayers from funding political organizations in recent years, their attempts have met with
fierce resistance from the utility companies. Nevertheless, some auditors at public utility
commissions and some consumer advocates either have successfully asked that the burden
of proof be placed on a utility company to show how EEI dues benefit ratepayers, or have
asked for more financial information regarding EEI’s spending in attempts to show
commissioners that EEI’s spending is intended to benefit shareholders.
Waning Regulatory Oversight of Ratepayers’ Paying for Political Memberships
For a time between the 1980’s and early 2000’s, the National Association of Regulatory Utility
Commissioners (NARUC) investigated EEI’s misuse of utility customer money for lobbying
and public relations. This led to NARUC conducting annual audits of EEI’s financial records.7
The result was a system of compromise where, based on NARUC’s annual audits, regulators
ruled that utilities could collect a significantly smaller portion of their EEI dues from
ratepayers. For example, the Florida Public Service Commission increased the lobbying
portion of EEI dues that utilities were not allowed to recover from ratepayers from 2% in 1982
to roughly 33% in 1984.8 The commission also barred utilities from charging ratepayers for
payments to EEI’s “Media Communications Program.”
Over a decade ago, the NARUC audits stopped and consumer advocates have since had
difficulty in fully understanding how EEI spends ratepayer money. In 2013, however, The
Utility Reform Network had success getting 43.3% of the EEI dues paid by Pacific Gas &
Electric’ shareholders during that utility's rate request and not ratepayers as the utility
originally requested.9 Successful oversight of EEI dues has faded away in other states. The
independent review of industry association dues that was once provided by NARUC has

New York Times, “Utility Group Criticized on Funds for Lobbying” available at http://www.nytimes.com/1984/07/21/business/utility-groupcriticized-on-funds-for-lobbying.html
7

Florida Public Service Commission Order (No. 10306, 1981) available at https://www.documentcloud.org/documents/3141815-FloridaPublic-Service-Orders-on-Industry.html#document/p27/a322247; (No. 13537, 1984) available at https://www.documentcloud.org/
documents/3141815-Florida-Public-Service-Orders-on-Industry.html#document/p158/a327132
8

Proposed Decision before the Public Utilities Commission of the State of California (Docket 14-08-032) available at https://
www.documentcloud.org/documents/3239245-COMPENSATION-to-TURN-for-SUBSTANTIAL.html#document/p8/a331970
9

ENERGY AND POLICY INSTITUTE

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 been replaced by an unreliable system of self-reporting by EEI and its utility members, both
of whom have an obvious self-interest in maximizing the amount of their dues that will be paid
by ratepayers.
Recommendations
Precedent exists for public officials to determine the percentage of EEI’s work that is
benefiting ratepayers or utility company shareholders. The following recommendations would
help protect ratepayers from funding utilities’ political association memberships:
1. Public utility commissioners and their staff should place the burden of proof on utilities to
demonstrate the exact percentage of customer money provided to industry groups and
other political organizations, including EEI, that benefits their own ratepayers. This is not a
recommendation for commissioners to indiscriminately disallow all EEI dues, as certain
EEI programs such as storm response coordination may indeed benefit ratepayers.
However, utilities should have to disclose the exact benefits that their political industry
associations confer to ratepayers for each of their activities in detail. It is insufficient for
utilities to only file an annual invoice from an organization that notes the self-determined
lobbying percentage as guidance for commissions to determine the appropriate amount
charged to ratepayers.
2. Consumer advocates and other parties whose mission is to protect ratepayers, such as
attorneys general, should file for discovery in order to receive additional documents to
have a better understanding of how a utility company works with their trade associations,
and whether that work benefits ratepayers.
3. The National Association of Regulatory Utility Commissioners (NARUC) should revive the
Committee on Utility Association Oversight and audit EEI, NEI, and AGA to determine the
percentage of their operations which are political in nature and therefore ought not to be
funded by ratepayers.
4. NARUC should compile a survey that shows the percentages of dues utility ratepayers
are paying to industry organizations and political party focused groups; particularly
(though not limited to) EEI; American Gas Association (AGA); Nuclear Energy Institute
(NEI); U.S. Chamber of Commerce; Democratic Governors Association; and Republican
Governors Association. Once completed and then published, this manual can help utility
accounting staff across the country manage the challenges associated with determining
industry association dues during rate requests. This report reveals only examples and is
not exhaustive.

ENERGY AND POLICY INSTITUTE

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 Testimony of Robert Habermann

Exhibit RH-4
Responses to Pace-6 RV-2 and Pace-6 RV-3

Date of Request: August 2, 2017
Due Date: August 14, 2017

Request No. PACE-6 RV-2
NMPC Req. No. NM-1428

NIAGARA MOHAWK POWER CORPORATION d/b/a NATIONAL GRID
Case No. 17-E-0238 and 17-G-0239 –
Niagara Mohawk Power Corporation d/b/a National Grid – Electric and Gas Rates

Request for Information

FROM:

PACE Energy and Climate Center, Radina Valova

TO:

National Grid, Revenue Requirement Panel

SUBJECT:

TRADE ASSOCIATION DUES

Request:
2.
Is National Grid a member of the Edison Electric Institute (EEI)? If yes, please provide
the Company testimony and/or exhibits where the EEI membership dues paid by the Company
are listed.

Response:
2.
Yes, National Grid is a member of the Edison Electric Institute. The EEI membership
dues paid and allocated to Niagara Mohawk are included on Exhibit__(RRP-11), Workpapers to
Exhibit__(RRP-3), Schedule 7, Workpaper 1, Page 61 as part of Activity AG0009.

Name of Respondent:
Stephanie Briggs

Form 103

Date of Reply:
August 11, 2017

 Date of Request: August 2, 2017
Due Date: August 14, 2017

Request No. PACE-6 RV-3
NMPC Req. No. NM-1429

NIAGARA MOHAWK POWER CORPORATION d/b/a NATIONAL GRID
Case No. 17-E-0238 and 17-G-0239 –
Niagara Mohawk Power Corporation d/b/a National Grid – Electric and Gas Rates

Request for Information

FROM:

PACE Energy and Climate Center, Radina Valova

TO:

National Grid, Revenue Requirement Panel

SUBJECT:

TRADE ASSOCIATION DUES

Request:
3.
Is National Grid a member of the American Gas Association (AGA)? If yes, please
provide the Company testimony and/or exhibits where the EEI membership dues paid by the
Company are listed.

Response:
3.
Yes, National Grid is a member of the American Gas Association. The AGA
membership dues paid and allocated to Niagara Mohawk are included on Exhibit__(RRP-11),
Workpapers to Exhibit_(RRP-3), Schedule 7, Workpaper 1, Page 63 in Activity AGA349.

Name of Respondent:
Stephanie Briggs

Form 103

Date of Reply:
August 11, 2017

 Testimony of Robert Habermann

Exhibit RH-5
Response to Pace-6 RV-4

Date of Request: August 2, 2017
Due Date: August 14, 2017

Request No. PACE-6 RV-4
NMPC Req. No. NM-1430

NIAGARA MOHAWK POWER CORPORATION d/b/a NATIONAL GRID
Case No. 17-E-0238 and 17-G-0239 –
Niagara Mohawk Power Corporation d/b/a National Grid – Electric and Gas Rates

Request for Information

FROM:

PACE Energy and Climate Center, Radina Valova

TO:

National Grid, Revenue Requirement Panel

SUBJECT:

TRADE ASSOCIATION DUES

Request:
4.

What are National Grid’s current dues to EEI?

Response:
4.
National Grid’s total membership dues to EEI for calendar year 2016 were $1,294,235.
Niagara Mohawk’s allocated share of these costs is described in the response to Information
Request No. PACE-6 (RV-8).

Name of Respondent:
Stephanie Briggs

Form 103

Date of Reply:
August 11, 2017

 Testimony of Robert Habermann

Exhibit RH-6
Response to Pace-6 RV-5

Date of Request: August 2, 2017
Due Date: August 14, 2017

Request No. PACE-6 RV-5
NMPC Req. No. NM-1431

NIAGARA MOHAWK POWER CORPORATION d/b/a NATIONAL GRID
Case No. 17-E-0238 and 17-G-0239 –
Niagara Mohawk Power Corporation d/b/a National Grid – Electric and Gas Rates

Request for Information

FROM:

PACE Energy and Climate Center, Radina Valova

TO:

National Grid, Revenue Requirement Panel

SUBJECT:

TRADE ASSOCIATION DUES

Request:
5.

What are National Grid’s current dues to the AGA?

Response:
5.
National Grid’s total membership dues to the AGA in calendar year 2016 were
$1,022,765. Niagara Mohawk’s allocated share of these costs is described in the response to
Information Request No. PACE-6 (RV-9).

Name of Respondent:
Stephanie Briggs

Form 103

Date of Reply:
August 11, 2017

 Testimony of Robert Habermann

Exhibit RH-7

Report by The Nature Conservancy

REV has strong support, from
four in five New York voters
Does the Reforming the Energy Vision program sound like
something you would support or oppose?
Strongly support

52%

Somewhat support

37%

Somewhat oppose

4%

Strongly oppose

4%

Don't know/NA/Refused

Total
Support
89%

Total
Oppose
8%

3%
0%

20%

Q10.

40%

60%

4

 This support is robust even in
the face of negative messaging
Initial Opinion
Strongly support

After Negatives

52%

Somewhat support

37%

Somewhat oppose

4%

Strongly oppose

4%

Total
Oppose
8%

Don't know/NA/
Refused

3%
0%

Total
Support
89%

47%
34%

Total
Support
82%

Total
Oppose
14%

6%
8%

4%
20%

40%

Q12. Split Sample

60%

0%

20%

40%

60%

5

 A majority of New Yorkers rates global
warming as a serious problem
Ext. Ser.

Very Ser.

The cost of health care

Smwt. Ser.

38%

The economy and unemployment

26%

Crime and drugs

26%

Global warming

23%

Climate change

21%

37%

28%

30%

12%

27%

The cost of electricity

13%

24%

15%

25%

20%

Extreme weather

12%

21%

Air pollution and smog

13%

19%
20%

8%

69%
57%
53%

26%

48%

23%

41%

26%

39%

34%

29%

38%

31%

31%

38%

31%

37%

36%
40%

75%

25%

37%
34%

6%

15%

22%

26%

18%

0%

23%

31%

Not using enough clean, renewable energy
sources
New York not doing enough to meet its
potential for developing clean energy
Too much dependence on fossil fuel

19%

44%

27%

Ext./Very
Ser. Prob.

Not Ser./DK/NA

33%
33%

31%
60%

80%

100%

Q1. I’m going to read you a list of issues, and I’d like you to tell me how serious a problem you think each
one is in your community. Please tell me whether you think it is an extremely serious problem, a very
serious problem, a somewhat serious problem, or not a serious problem. Split Sample

6

 New York voters strongly support
using more wind and solar power
Strng. Supp.

Smwt. Supp.

Solar

Stng. Opp.

74%

Wind

25%

58%

Natural gas

30%

40%

Nuclear

14%
8%
0%

37%

22%
21%
20%

24%

5%

6%

12% 8%
36%

21%
40%

DK/NA

20%

64%

Hydropower

Coal

Smwt. Opp.

5%

47%
60%

80%

Total
Supp.

Total
Opp.

94%

5%

89%

9%

88%

6%

77%

20%

36%

60%

29%

68%

100%

Q3. Here is a list of specific sources of energy. Please tell me whether you would support or oppose
increasing the use of that source of energy to meet New York State’s future needs.

7