John Oliver exposed a mainstream audience to the ways that failed utility regulation often result in higher monthly bills, political corruption and environmental damage on Last Week Tonight, his weekly late-night show on HBO.
John Oliver takes on monopoly utilities
After explaining how monopoly utilities make money from capital expenditures and influence often-captured regulators, Oliver toured some of the scandals that have beset the industry in recent years, from FirstEnergy corrupting Ohio’s political system with $60 million in dark money payments and millions more in admitted bribes of its top regulator, to PG&E’s causing more than one fire per day during a three-year period due in part to the company’s poor maintenance of its equipment.
The segment had racked up over 900,000 views on YouTube as of this morning.
Here’s more context on some of the scandals that Oliver discussed from the Energy and Policy Institute’s archives:
Both boondoggles were enabled by the utilities’ influence over legislators, which led to the passage of laws that allowed the companies to offload the risk of speculative projects onto customers. The utilities also worked to install and sway pliant regulators at the Public Utility Commissions in those states. Public backlashes in both places have led to greater regulatory scrutiny of the companies since the scandals.
Borrowing footage from Jonathan Scott’s documentary Power Trip, Oliver explained how monopoly utilities around the country have attacked policies that enable customers to own their own rooftop solar panels.
He could have chosen other contemporary examples outside the residential sector. Duke is currently attempting to bar Fort Bragg, a military base in North Carolina, from generating its own solar power as well, despite the Department of Defense’s stated need to increase energy security for the military.
The Duke episode follows a well-worn playbook that the industry has used across the country, coordinated by the trade association for investor-owned utilities, the Edison Electric Institute.
Oliver heaped satire on the elected Alabama Public Service Commission PSC, noting that both Commissioners Twinkle Cavanaugh and Chip Beeker have denied the reality of climate change.
For decades, Southern Company subsidiary Alabama Power has used immense influence over those regulators to extract high rates from Alabama customers and to avoid oversight. From 2014 to 2018, the company reaped over $1 billion in excess profits on top of what it would have earned with industry-average returns on equity, according to an analysis by EPI. Unlike regulators in any other jurisdiction, the Alabama PSC has not subjected the company to a contested rate case with a full discovery process since 1982.
EPI reported last week that Alabama Power has built a war chest of almost $4 million during a year where two of its regulators, Beeker and Jeremy Oden, face re-election.
The utility scandal that has attracted the most attention in recent years happened in Ohio, where FirstEnergy paid $60 million to Speaker of the Ohio House Larry Householder’s political slush fund in exchange for enacting a new law that provided a $1 billion ratepayer-funded bailout for several nuclear and coal plants owned by a bankrupt FirstEnergy subsidiary. Oliver described how FirstEnergy paid $22 million to its top regulator, Sam Randazzo, in the years prior to Randazzo’s appointment as the chair of the Public Utilities Commission of Ohio. Randazzo resigned shortly after the FBI raided his house, though he has not yet been charged with any crimes. Householder’s trial is set to begin later this year.
Oliver suggested that viewers “Just google your utility and the word scandal, and the chances are they’ve gotten into some major trouble.”
Anyone doing so would find a plethora of examples. A recent set of cascading scandals comes from Florida, where the monopoly utility Florida Power & Light (FPL) drafted legislation that would have ended a key rooftop solar policy, delivering the bill to the sponsoring legislator alongside a contribution to that legislator’s political action committee a few days later. Florida’s governor Ron DeSantis vetoed the bill, which was deeply unpopular.
Like FirstEnergy, FPL and its parent company NextEra Energy also spent millions on dark-money groups to get the legislators that it wanted. With the Florida Senate hanging in the balance during the 2020 election cycle, FPL and NextEra paid millions of dollars to political consultants who used the money to set up 501(c)(4) “dark-money” organizations. According to records obtained by the Orlando Sentinel, FPL executives, including the CEO, coordinated closely with the consultants. The utility-funded dark-money groups engineered a brazen scheme to siphon votes from Democrats to third-party “ghost candidates” in three of Florida’s 2020 legislative elections, all of which were won by Republicans, two by razor-thin margins.
