Money follows the path of most influence

By Pam Boschee

We began February with the presidential primaries. There was a whole lot of stomping, but I don’t recall hearing much about the candidates’ plans for the electric industry (or any mention of the stalled energy bill). If only the August blackout had occurred during their campaign pushes in the Northeast. I suspect we would have heard immediately each candidate’s viewpoint on solutions to the grid problems. I’m going out on a limb here, but my guess is that all candidates would be on record as “strongly opposed” to blackouts.

However, in the event that these men haven’t crafted their detailed plans, it seems that our industry is mightily attempting to be heard. And we seem to know how best to achieve that goal: money talks, people listen.

As of Nov. 3, the Federal Election Committee reported total contributions of electric utilities (including IOUs, munis, RECs) as $5,028,548. As an industry, electric utilities ranked 18 compared to more than 80 other industries (according to The Center for Responsive Politics).

selectric utilities (including IOUs, munis, RECs) as $5,028,548. As an industry, electric utilities ranked 18 compared to more than 80 other industries (according to The Center for Responsive Politics).

Not surprisingly, electric utilities have increased their political contributions to candidates and parties since “deregulation” was first uttered. In 1992, contributions totaled $5.4 million in individual, PAC, and soft money contributions. In 2000, the industry’s soft money contributions alone nearly doubled to about $8 million.

As late as 1994, electric utilities slightly favored Democrats over Republicans with campaign contributions. When the GOP gained control of Congress in 1994, money naturally followed the path of most influence. Utilities continue to favor Republicans with their campaign contributions by more than 2 to 1.

The Edison Electric Institute, the National Rural Electric Cooperative Association and the American Public Power Association are also active in lobbying elected officials.

Total lobbyist spending by utilities in 2000 topped out at $78,223,861.

Before anyone huffs and puffs in outrage or disenchantment about “how the system works,” let’s do a simple and crude ROI analysis.

The National Transmission Grid Study (2002) projected an increase of 6 percent in transmission line miles over the next 10 years, which amounts to about 9,000 miles of high-voltage lines. This is woefully inadequate to meet the projected 20 percent increase in demand over the same period.

The contributed $78 million would cover the cost of 78 miles of underground power lines, or about 780 miles of overhead lines (presuming a cost of $1 million per mile for underground and $100,000 per overhead).

The contributors’ $78 million theoretically achieved an important goal: presentation of their spin on relevant business issues to decision-makers, which could ostensibly lead to resolution of many of the political and regulatory uncertainties that now impede investments in infrastructure.

Taking a long-term view, it may be money wisely spent.

Pam Boschee

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