By Christen Smith
FERC on Thursday denied a complaint from Public Citizen that alleged PJM failed to disclose nearly $500,000 in political spending it purportedly financed with membership fees collected from rates.
The consumer advocacy group asked the commission last year 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.) The group also asked FERC to declare the RTO’s filed rate unjust and unreasonable.
PJM said the contributions support educational services and argued that its Finance Committee — composed of stakeholder representatives from all sectors — supplies adequate oversight of how the RTO spends rate revenues. It also described the complaint as a “collateral attack on the commission’s previous denial of Public Citizen’s protest in PJM’s stated rate proceeding.”
The commission rejected Public Citizen’s arguments that PJM should provide greater visibility into what portion of its expense budget is spent on “outside services” that may have included political advocacy.
“We find that the oversight and review functions PJM has established through its Finance Committee provide sufficient transparency and review of these expenditures,” FERC wrote. “Therefore, we find that Public Citizen has not demonstrated that additional transparency measures, beyond those which already exist, are needed.”
The order also reiterates that RTOs are allowed to recover costs related to informational and educational efforts.
“These fees allow PJM to educate and inform state government officials about issues related to the wholesale markets and bulk power system at policy conferences and forums,” FERC wrote. “Participation in these meetings is directly related to the RTO’s educational function and undertaken in the collective best interest of PJM’s members.”
Susan Buehler, a PJM spokesperson, said the organization is pleased with FERC’s ruling.
“PJM has acted in accordance with all applicable laws and regulations, and participated in legitimate activities in the interests of our stakeholder,” she said in an email Friday. “PJM operates as a profit-neutral organization for which educating and informing elected officials, key stakeholders and government agencies are essential to our FERC-defined functions. PJM is committed to transparency throughout our organization and will continue to be so as required by our Tariff.”
Tyson Slocum, director of Public Citizen’s energy program, told RTO Insider that his group will file a rehearing request within the next 30 days.
“This is a really radical decision,” he said. “It underscores that FERC isn’t actually interested in doing its job of being a regulator and that RTOs are not closely monitored and are self-regulated entities.”
Slocum said PJM’s Finance Committee is composed of volunteer stakeholders — some of whom spoke to the organization off the record, he said — who don’t have the time or resources to effectively manage the RTO’s $300 million operating budget. Further, PJM bars nonmembers from attending the committee’s meetings.
“Relying on volunteer stakeholders to monitor your finances and budget might be appropriate for your local PTA, but it’s wildly inappropriate for a $300 million organization funded with public money,” Slocum said.
“When elected officials and their electoral counterparts charge entities or individuals for preferential access, and FERC literally endorses pay-to-play political advocacy — that’s an outrage,” he said.
At FERC’s open meeting Thursday, Commissioner Richard Glick said that though he had voted to deny the complaint, “I do think it would make some sense for PJM, and other RTOs as well, to provide stakeholders with more information about their political activities, whether it be their political contributions or their lobbying activities. And even though I don’t think necessarily it’s required under the [Federal Power Act], I would urge PJM but also urge all the other RTOs to be more transparent in terms of these activities.”
