Utility lobbying violates ratepayers' free speech

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Since 2009, Minnesota's three for-profit electric corporations — Xcel Energy, Otter Tail Energy and Minnesota Power — have spent $33 million on lobbying, according to data released Thursday by the Minnesota Campaign Finance Board.

And what if you don't agree with the positions these utilities are lobbying for — like Xcel Energy's attempt to make customers pay for a utility-owned electric vehicle charging network? Too bad. Through your monthly bills, you are forced to pay for their lobbying activities anyway.

The First Amendment prohibits the government from restricting freedom of speech and protects "the right of the people ... to petition the Government for a redress of grievances." Within this last phrase lies the freedom to call, write or otherwise communicate with government officials about one's interests. Courts have granted corporations similar privileges to lobby policymakers in the interest of their shareholders and owners.

So what happens when corporations advocate for policies that their customers oppose?

Customers can often choose another business to patronize if they disagree with a company's political speech. When a business operating in groceries or computers or automobiles, say, makes a campaign contribution or lobbies the government, disapproving consumers can vote with their wallets and buy from Aldi instead of Target, Dell instead of Apple or Nissan instead of Chevrolet.

The same is not true for customers of Minnesota electric and gas utilities, whose market is guaranteed to them by government fiat. If you're a customer of Xcel Energy, Otter Tail Energy and Minnesota Power, your electric bill has helped pay for their combined 105 lobbyists; that is one for every two legislators or public utilities commissioners.

CenterPoint Energy, one of the state's largest natural gas delivery corporations, has 28 lobbyists and has spent nearly $9 million lobbying in Minnesota over the same period. The parent company also contributed to the Texas Republican Party's convention in 2022 where convention delegates adopted a platform of repealing the landmark 1965 Voting Rights Act. In response, CenterPoint's Minnesota customers couldn't select a different gas provider to fuel their furnace or water heater. They were stuck footing the bill for CenterPoint's speech, like it or not.

Nor could they switch electric providers when Xcel Energy slipped money to industry associations that lobby against cost-effective investments in clean energy or consumer protections.

If we can't vote with our wallets, must we be compelled to pay for speech that opposes our interests? The answer should be no.

When evaluating union members' rights to free speech, the U.S. Supreme Court in Janus v. AFSCME said that an organization goes too far if it compels its members to pay for lobbying, if its members have no choice. The case of monopoly utility companies creates a more severe dilemma than the Janus case. Union members can choose the union's leadership and political agenda — not so with utility customers and their monopoly utility.

By virtue of their home address and state law, Minnesotans must use a particular gas or electric utility. We have no choice in our provider, and therefore no choice in how our dollars are used for political speech. This compelled speech is a slap to the face of democracy.

Already, lobbying allows utilities undue influence because new state laws or utility commission rules have an outsized effect on the company's profits in a market without competition. Lobbying funded by utility bill payments from captive customers also enables utilities to sidestep their public overseers. In Minnesota, every Xcel customer helped pay the company's lobbyists during its ill-fated attempt to skip oversight on a risky nuclear power plant retrofit. They're paying now for the utility's efforts to expand its monopoly from electricity delivery to electric car charging.

Where state law created this threat to democracy, it can repair it. In competitive industries, choice protects Americans' speech rights. In noncompetitive industries, customers have no choice. Instead, a monopoly corporation lobbying ban can protect captive customers from being forced to fund political speech that works against their own interests.

Monopoly businesses offend a country founded on free speech and free markets, but they don't have to violate both principles simultaneously. If CenterPoint and Xcel want to lobby, then the Legislature should restructure the market to give customers the freedom to choose another provider just as they have in buying a car or computer. If we must keep utility monopolies, lawmakers should ban utility lobbying to avoid the perversity of making us pay for speech we oppose.

John Farrell is a co-director of the Institute for Local Self-Reliance and directs the Energy Democracy Initiative.