CLIMATE

Utility PACs generous to key players in Hill debate

Large electric utilities that rely heavily on coal poured money into re-election campaigns as the House shaped and passed landmark climate legislation, a bill that helps those businesses partly sidestep its toughest provisions.

Employee-run committees for American Electric Power Co. Inc., Duke Energy Corp. and Southern Co. gave $165,000 to 70 House members in April, May and June. They sprinkled money among senators, too, contributing $46,500 to 18 Senate re-election campaigns.

The money went heavily to members of the House Energy and Commerce Committee that amended and voted on the bill before the final floor vote. Contributions also went to lawmakers from states where the utilities have plants.

Both the companies and lawmakers insisted there is no correlation between campaign contributions and votes. Watchdog groups believe the money buys influence and made the legislation friendlier to power companies.

"Companies give campaign contributions to gain access that they otherwise wouldn't have," said Erich Pica, spokesman for environmental group Friends of the Earth. "If you look at the provisions in the bill for coal, they got a pretty sweet deal."

The contributions came through the three companies' political action committees, which pool contributions from employees. The utilities reject the notion that the money gave them undue clout.

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"Obviously, we have experts on a variety of things related to climate and our industry. We provided those experts," said Pat Hemlepp, spokesman for AEP, which sells electricity in Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Tennessee, Texas, Virginia and West Virginia.

"But trying to say that our contributions led to that is kind of odd, considering we gave more during the same period last year."

AEP in the second quarter this year doled out $80,000 to 41 House members and $16,000 to 13 senators. Last year the PAC in the second quarter gave a combined $103,800 to House members and senators.

The timing of contributions is not tied to issues, Hemlepp said. The PAC contributes based on when lawmakers hold fundraisers, he said.

"In general, our PAC supports candidates for public office who are tied to our service area and also who have viewpoints that align with our company's viewpoints on issues," Hemlepp said.

But contributions that all three utilities made in April, May and June came at a key time for the energy legislation crafted by Democratic Reps. Henry Waxman of California and Ed Markey of Massachusetts. The two released a draft of that bill March 31, the last day of the first quarter. Over the next seven weeks, the two worked with Energy and Commerce Committee members to gain enough support to pass the bill out of committee.

The utilities during April, May and June gave campaign money to 25 of the 59 members of the Energy and Commerce Committee. AEP, Hemlepp said, also gave campaign contributions to lawmakers not on the Energy and Commerce Committee.

But Tyson Slocum, director of Public Citizen's energy program, believes the contributions helped utilities.

"It doesn't guarantee a vote your way, but it guarantees you access," Slocum said. "It gets you meetings. It gets you longer meetings. It helps you cultivate personal relationships."

Many of those receiving contributions were Republicans who opposed the bill in committee, their opposition creating the backdrop against which many legislative changes were made.

"If the Republicans are saying, 'higher energy price, higher energy prices,' that political pressure and messaging forces the Democrats to respond," Pica said. "Industry had a solution they were going to be happy with."

The bill sets up a program that caps carbon emissions and requires utilities to buy permits to emit carbon. It also gives away 85 percent of those permits in the early years, with the largest portion of free allowances going to local distribution companies tied to utilities. Coal-fired utilities in particular gain the most, because the allowances are given in part based on how much carbon utilities have emitted in the past.

In addition, Pica said, the bill sets up a program to fund research into capturing carbon emissions from coal plants and sequestering it below ground. And the bill removes some of EPA's authority to regulate power plants under the Clean Air Act.

The formula for allocating allowances "is a good starting point," AEP's Hemlepp said. "The utilities are the largest stationary sources of CO2. Anything that could be done to reduce the cost of compliance" is important, he said, because it will prevent electricity rates from jumping. Utilities have said repeatedly that they sought the allowances to protect customers from higher bills.

The companies supported passage of the bill. By a margin of more than 2-to-1, however, those lawmakers who received contributions rejected the bill: 48 voted against, 21 voted for passage and one lawmaker did not vote.

"I don't see much correlation" between the contributions and votes, said Duke Energy spokesman Thomas Williams, "if we gave $43,000 to 33 members and 23 of them voted against the bill we support."

The situation was almost a win-win for utilities, said Slocum with Public Citizen. While they supported the bill, he said, the utilities would prefer no change in federal regulation. So if Congress failed to pass a bill, he said, they could be better off.

AEP's Hemlepp, however, said utilities prefer a congressionally crafted bill instead of regulation that could come from U.S. EPA.

Duke, Southern Co.

In addition to the $43,500 that Duke Energy gave to 33 House members, it contributed a total of $17,500 to nine senators.

"We focus on giving to members of Congress in our service area in Indiana, Kentucky, Ohio, North Carolina and South Carolina," spokesman Williams said.

"We focus on those who are 'thought leaders' on energy issues and the policy debate," Williams added. "We generally do not focus on single issues, such as climate, when making decisions."

Atlanta-based Southern Co. distributed $41,500 among 26 House members and $13,000 to seven senators in the second quarter.

"While there are many factors in the decision to support a candidate, a few key considerations are position on issues of importance to Southern Company, key congressional committee assignments and leadership positions," Valerie Hendrickson, spokeswoman for Southern Co., said in an e-mail.

The PAC was created "to enable Southern Company employees to support candidates who understand issues that are important to Southern Company's customers, employees and shareholders," Hendrickson added.

Southern Co. operates in Alabama, Georgia, Florida and Mississippi.

Regardless of the money coming through the PACs, Public Citizen's Slocum said, the contributions are a savvy business decision.

"There's a reason why businesses invest in this," Slocum said. "Investment in politicians' re-election campaigns have great returns for these companies."

Major beneficiaries

House Minority Leader John Boehner (R-Ohio) received the highest total contribution amount from utility PACs during the second quarter. He took in $11,500 total, comprised of $8,500 from Ohio-based AEP, and $3,000 from Southern Co. Boehner declared his opposition to the Democrats' climate bill early on.

Other lawmakers getting comparatively high total contributions from one or more utility PACs during the three-month period include Reps. Baron Hill (D-Ind.), who received $7,500 combined from AEP and Duke. Hill sits on the Energy and Commerce Committee.

Rep. Joseph Crowley (D-N.Y.) received $7,000 total, made up of $6,000 from Southern Co. and $1,000 from AEP. Crowley sits on the Ways and Means Committee, which oversees tax law.

Five House members and Sen. Ben Nelson (D-Neb.) received money from all three company PACs. Nelson, a moderate, took in $5,500 combined. Nelson is on the Appropriations Committee, which manages the funding of most federal agencies and programs.

Of the House members receiving money from all three utility PACs, Rep. Bart Gordon (D-Tenn.) was the only one to vote "yes" on Waxman-Markey. AEP, Duke and Southern Co. gave Gordon a total of $5,500. Gordon chairs the Science and Technology Committee and also a member of the House Energy and Commerce Committee.

Gordon's spokesman, Kinsey Kiriakos, said the contributions "had no influence." Gordon's main thrust, Kiriakos said, was ensuring that the bill did not drive up electricity prices in Tennessee or the southeastern United States.

"I have given this legislation a lot of thought, and I am convinced it will not only benefit working families in Middle Tennessee, but is essential to our region's economic future," Gordon said when the bill passed. "Jobs have been leaving our country and most of them aren't coming back. This bill will create new industries in the energy sector for blue-collar workers."

The highest total given by the three utility PACs went to Rep. Mike Ross, an Arkansas Democrat and member of the Energy and Commerce Committee. He received a combined $6,000. Ross voted against the bill.

Rep. Dave Camp (R-Mich.) received a total of $5,000 from the three utility PACs. He is the senior Republican on the House Ways and Means Committee, which oversees tax policy changes. Camp voted against the climate bill.

"This national energy tax will drive up prices while making scarce jobs scarcer," Camp said on the House floor the day of the vote. "In fact, one utility -- which is even supporting this legislation -- has already applied to state regulators to raise their electricity rates in anticipation of the costs of complying with this national energy tax."

The three PACs gave a total of $4,000 each to Reps. Ed Whitfield (R-Ky.), and Pat Tiberi (R-Ohio). Both voted against the Waxman-Markey bill.

"The impact of this legislation on the American consumer will be immense and far reaching," Whitfield said at the time of the vote. "It will affect the prices we pay to fill up our gas tanks, heat and cool our homes, and use electricity as well as the costs of practically all goods and services."

Tiberi let AEP know "from the get-go" that he didn't support the bill, said Tiberi's chief of staff, Chris Zeigler.

"Ohio's a big coal state," Zeigler said. "We had some big concerns about how it would impact the jobs, how it would impact people's utility rates."

Many lawmakers from states where AEP operates "have reservations on this," Hemlepp, spokesman for AEP, said of the climate bill. He described the company's service area as "coal country."

"Nobody's viewpoint is going to align with us on every issue," Hemlepp said. "There are a lot of issues we have up on the Hill."

The utility PAC contributions were spread widely in the Senate.

Besides Nebraska's Nelson, receiving contributions were Sens. Evan Bayh (D-Ind.), Bob Bennett (R-Utah), Jim Bunning (R-Ky.), Richard Burr (R-N.C.), Mike Crapo (R-Idaho), Byron Dorgan (D-N.D.), Chuck Grassley (R-Iowa), James Inhofe (R-Okla.), Daniel Inouye (D-Hawaii), Johnny Isakson (R-Ga.), Mary Landrieu (D-La.), Blanche Lincoln (D-Ark.), Dick Lugar (R-Ind.), John McCain (R-Ariz.), Mark Udall (D-Colo.), Jim Webb (D-Va.) and Sheldon Whitehouse (D-R.I.).

Behind Nelson, Burr received the highest total. He took in $5,000 -- $4,000 from AEP and $1,000 from Duke.

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