FERC on Thursday denied Public Citizen’s request to rehear its original complaint alleging that PJM failed to disclose nearly $500,000 in political spending purportedly financed with membership fees collected from rates.
The consumer advocacy group asked the commission in 2018 to force PJM to itemize all political-related spending after it accused the RTO of contributing $456,500 to both the Democratic and Republican governors associations since 2007 without telling stakeholders or FERC about it, as required by its own Operating Agreement and the Federal Power Act (EL18-61). (See Advocate Group Questions PJM Campaign Contributions.)
PJM said the contributions support educational services and argued that its Finance Committee provides appropriate oversight of how the RTO spends rate revenues through a stakeholder process.
FERC ruled against Public Citizen’s complaint in October, rejecting arguments that PJM should provide greater transparency into budgetary items spent on “outside services” that may have included political advocacy. (See PJM Political Spending OK, FERC Says.)
The group filed a rehearing request on Nov. 18, contending that FERC’s findings “rests on twin errors,” including that PJM’s financial contributions to political action committees are “just and reasonable because PJM’s intent was noble” and that stakeholders are “empowered to independently oversee PJM’s finances and raise questions about PJM’s spending.”
In its ruling Thursday, FERC said it was “unpersuaded” by Public Citizen’s argument that contributions to the governors associations are done to provide “special access” to elected officials. FERC said the commission evaluates lobbying-type expenditures if they represent an educational or informational function of the RTO and if it supports policies the RTO determines to be in the best interest of its stakeholders and for which it cannot receive financial benefits.
“The commission agreed with PJM that, by paying membership fees to the DGA and RGA, PJM maintains access to these organizations to keep informed on policy initiatives impacting the wholesale markets and to help educate state policymakers on PJM activities, and such expenditures are directly related to advancing PJM’s stakeholder interests,” FERC wrote. “Further, the commission noted that attending DGA and RGA meetings is a cost-effective way of engaging on policy matters where the governors of PJM’s 13 states and their staffs are present.”
On the oversight of financial expenditures by stakeholders, FERC said PJM’s Finance Committee, which includes consumer advocate stakeholders, represents the views of stakeholders adequately. FERC also said that since PJM does not have shareholders, there is less of a profit motive for expenditures that are not in the interest of stakeholders.
Public Citizen also argued that it is barred from attending, monitoring or participating in Finance Committee meetings and had no ability to challenge expenditures.
“Public Citizen could join PJM as a non-voting member and thus be able to represent its interests by attending PJM Finance Committee meetings and expressing its views on PJM proposals,” FERC wrote.
Representatives from Public Citizen called FERC’s decision a “partial victory for transparency,” as the commission acknowledged that non-voting members could participate in Finance Committee meetings.
“We view this as a clear FERC acknowledgment that PJM’s closed Finance Committee meetings should be open to active participation by Public Citizen and other public interest groups,” said Tyson Slocum, director of Public Citizen’s energy program. “We intend to vigorously participate in such meetings to ensure the public’s money is being wisely spent.”