By Rich Heidorn Jr.

WASHINGTON — A public relations agency for the Consumer Energy Alliance emailed RTO Insider a couple weeks ago after we quoted the Energy and Policy Institute’s description of CEA as a “a fossil fuel-funded advocacy group.” (See Trump Nominates DOE’s McNamee to FERC.)

“CEA’s description in an [Associated Press] story from earlier this year was ‘Consumer Energy Alliance, a national advocate for energy consumers,’” the spokesperson said in an email. “We believe the AP is a more credible source.”

Well, yes, the AP is generally credible. But in this case, it was a bit too credulous.

Although CEA calls itself “the voice of the energy consumer,” a look at the group’s membership list shows 78 “Energy Providers & Suppliers,” two-thirds of them oil and gas producers and mining interests.

So, while I credit CEA for the transparency of its membership list, I was a little surprised that the group would invite scrutiny of its motives. Nevertheless, that would have been the end of the story, except for something else that CEA’s public relations person, Kristin Marcell, of SmartMark Communications, said in her email.

“Since your story referenced the Energy and Policy Institute in your description of CEA, I wanted to share more information about the institute’s background according to the Campaign for Accountability,” she said.

I felt I needed to know if I had quoted a disreputable source. So I clicked on the link. What followed was a trip down a rabbit hole into the murky world of public relations activism, “Astroturf” lobbying and “swampetition.”

It was a valuable reminder that one should not take such groups’ claimed missions at face value, particularly if they do not disclose their members and/or funders. Ultimately, these groups must be judged by what they do and the company they keep, not what they say.

As a window into this world, here’s what we learned about these three groups.

What is the Energy and Policy Institute?

CEA’s critic, the Energy and Policy Institute, describes itself as a “watchdog exposing the attacks on renewable energy and countering misinformation by fossil fuel interests.”

There’s little doubt about the group’s goals. It has taken on the Koch brothers, ExxonMobil, coal mining company Peabody Energy, and utilities American Electric Power, Dominion Energy and Duke Energy, among others. What it hasn’t done, however, is provide any information about who is funding its work.

“EPI is a dark money group: It does not appear to have nonprofit status, it is not registered with any relevant secretary of state, and no one admits to funding it,” the Campaign for Accountability said in a 2017 report that called it “just as secretive as the organizations it exposes.” CfA Executive Director Daniel Stevens summarized the findings in a July op-ed in the conservative Washington Examiner titled, “How the Energy and Policy Institute dupes the media into covering its work,” alleging that EPI “appears to be funded by interests or persons that profit financially from its work.”

Indeed, the institute provides no information on its members or financial backers, saying only that it “does not receive funding from corporations, trade associations or governments.”

Executive Director David Pomerantz, a former Greenpeace organizer, defended his group’s reticence.

“We’re clear about the kind of entities we accept money from,” he said in an interview. “We don’t take money from corporations, we don’t take money from solar companies, we don’t take money from wind companies or any other interest that could benefit from our work.”

Are you a nonprofit?

“We have a fiscal sponsor.”

Meaning you’re an affiliate of another organization?

“To be honest, we tend not to get into it because it inevitably leads to questions about who our specific funders are. And our work is pretty confrontational, with pretty powerful companies who have not been shy about attacking funders,” he said. “So we try to protect them from that. The way we describe ourselves is as a watchdog group whose funding comes from nonprofits.”

Pomerantz said EPI would not be required to disclose its donors even if it filed an IRS Form 990. In July, the IRS ended the requirement that nonprofit organizations registered under Section 501(c)(4) of the tax code as “social welfare” organizations report the names of donors who contributed more than $5,000 in a year. (Those names are redacted on the publicly viewable forms the groups file, leaving only the amounts visible.) The change did not affect nonprofit groups whose primary focus is influencing political campaigns, which remain required to report the names of large donors.

“Political spending — those donors have to be disclosed,” Pomerantz said. “That’s not the kind of work that we do.”

Pomerantz makes it clear that his group, unlike CEA, does not claim to believe in an all-of-the-above fuel strategy. “We’re passionate advocates for renewable energy and for [fighting] climate change. And the fact that we’re getting these kinds of attacks to me says that we’re being effective. I think we’ve developed a track record for our research that’s pretty rock solid, and nobody’s really attacked that. … Instead, they’re looking for these kinds of ad hominems. And I think we’ve got that no matter what, regardless of what level of disclosure we provide.”

CfA’s report on EPI was published in June 2017, about three months after EPI released reports accusing some investor-owned utilities and their trade group, the Edison Electric Institute, of conducting “a comprehensive campaign to weaken the solar energy market” by fighting net metering and using “disinformation.”

EEI spokesman Jeff Ostermayer defended the industry’s opposition to “outdated net metering policies” and said IOUs and other utilities provide “69% of all solar energy on the grid and virtually all the geothermal, hydro and wind energy.”

“A fair system of net metering means paying private solar customers the same, competitive price electric companies pay for other solar energy, instead of above-market rates that result in higher costs for all customers,” he said. “If private solar customers continue to use the energy grid — for backup power and to earn credits for selling energy back — then they should share in the costs of operating and enhancing the energy grid like all other customers.”

EPI also issued a report in May 2017 detailing how utilities pass through their EEI dues to ratepayers in their general operating expenses. “This widespread practice results in ratepayers subsidizing the political activities of EEI, with which they may not agree and from which they may not benefit,” the group said, citing utilities’ advocacy for increased fixed and demand charges.

Ostermayer said EPI has provided no evidence that EEI has failed to comply with state and federal laws addressing lobbying and expense reporting.

State regulatory commissions “conduct open and transparent regulatory rate review proceedings to determine what costs regulated energy companies can appropriately recover. … The lobbying portion of EEI’s dues, which is not recoverable, is calculated and reported each year using the Internal Revenue Code’s (IRC) definition of ‘lobbying and political activities’ as required to be reported on IRS Form 990,” Ostermayer said. “In filings required under the Lobbying Disclosure Act, EEI elects to use the same IRC definition, which broadly captures not only federal lobbying, but also state and grassroots lobbying and political activities. EEI activities in certain regulatory proceedings and communications efforts, for example, are not lobbying as defined by federal law. … EPI cannot change the definition of ‘lobbying,’ as set by law, to fit EPI’s own definition.”

EPI also reported in October 2016 that CEA has attacked policies supportive of solar energy, such as tax credits and net metering, while deliberately misleading the public with claims that it is “pro-solar.”

EEI, which is a CEA member, said it has never provided funding for the CfA and had no role in CfA’s report criticizing EPI.

What is the Campaign for Accountability?

Next, I felt I needed to learn more about the Campaign for Accountability. It was co-founded in 2015 by Anne Weismann, former legal counsel for the well-known liberal watchdog group Citizens for Responsibility and Ethics in Washington (CREW) and former CREW Chairman Louis Mayberg. Executive Director Stevens also is a former CREW staffer.

Much of CfA’s work has been similar to that of CREW in raising ethical questions about members of Congress and others. But the group also has taken on projects that suggest it may be driven in part by business interests rather than just a desire for good government.

In 2016, the organization launched “The Google Transparency Project,” which has produced reports on the revolving door between Google and the federal government, and allegations that Google-funded academics were influencing federal policymaking. In September, the group issued a report claiming to have purchased ads on Google while posing as the Russia propaganda agency that sought to influence the 2016 U.S. election.

CfA became its own 501(c)(3) in 2017, after beginning as a project of the New Venture Fund.

Unlike EPI, CfA does file a Form 990. Its filing for 2017 lists $995,000 in income from only four unidentified donors, the largest of which provided $850,000, 85% of the total. Although the filing does not list donors, Oracle — which has battled Google in an intellectual property lawsuit and other matters — confirmed in 2016 that it has contributed to CfA. CfA’s parent, the New Venture Fund, has received millions in funding from the Bill & Melinda Gates Foundation and the William and Flora Hewlett Foundation, according to reporting by Ethan Baron, of the San Jose Mercury News.

Last month, a blogger for the Computer & Communications Industry Association (CCIA) included CfA’s receipt of contributions from Oracle as an example of what he called “swampetition,” defined as “manipulating regulators into attacking one’s competition.”

It “is a strategy with adherents in Washington, Brussels and beyond, although it is rarely front-page news,” wrote Matt Schruers, CCIA’s vice president for law and policy. “Hamstringing competitors in the political swamp instead of beating them in the market is often deployed by legacy industries against disruptive upstarts,” he wrote in a blog post Sept. 28. “It can also be used by small firms to cripple larger opponents. As a result, leading businesses are common targets of swamp warfare.”

[CCIA defines itself as a nonprofit that “promotes open markets, open systems, open networks and full, fair and open competition in the computer, telecommunications and Internet industries.” Its members include Google, Samsung, Sprint and Amazon — but not Oracle, Microsoft or Hewlett Packard.]

EPI’s Pomerantz said he was puzzled by CfA’s attack on his group and its work criticizing deceptive sales and marketing practices by rooftop solar providers. “It’s so dissonant from the rest of their work, which is progressive. It certainly seems to be funded by an anti-distributed solar interest,” he said, adding that he had no evidence to back his suspicion.

In an interview, CfA’s Stevens described his organization as a “progressive watchdog group.” He said CfA began investigating EPI after seeing the group’s research cited in defense of solar, including during a 2016 campaign over a Florida ballot measure. “Their name just kept popping up, so we started to [ask] who is this group?” Stevens said.

The Florida Amendment 1 campaign, which was backed by utilities, would have added language to the state constitution that could have increased fees for solar users and insulated utilities from competitors.

The measure, on which Florida Power & Light, Duke and other utilities spent more than $20 million, failed after disclosure of a recording in which a prominent supporter of the measure acknowledged that the amendment was an act of “political jiu-jitsu,” with utilities portraying it as pro-solar. Sal Nuzzo, policy director of the James Madison Institute, told conservative activists that the amendment was “an incredibly savvy maneuver” that “would completely negate anything [pro-solar interests] would try to do either legislatively or constitutionally down the road.”

Stevens denied his group functioned as paid attack dogs. “We have put all our cards on the table,” he said. “We’re following the law exactly as designed.”

But his answers left room for other interpretations.

Q. Do you ever take funding specifically in return for a given project?

“Oh no, definitely not. We have our work, and we conduct our work, and then people are free to support our work, but they don’t get any control over what we do or who we’re looking into.”

Q. So the suggestion that, because Oracle has been at odds with Google, Oracle was funding your Google Transparency Project, that’s not accurate?

“That’s not accurate.”

Q. Do you fundraise around individual projects?

“Not that I can think of.”

Q. So your fundraising is around your overall work? You’re not fundraising around individual projects?

“I think that’s right.”

Q. When you say you think that’s right, that sounds like you’re leaving a little wiggle room.

“That’s how you characterized it, so that’s fine. … You can quote me, or you can characterize it how you want, but I said what I said.”

What is the Consumer Energy Alliance?

Having interviewed principals at CfA and EPI, I circled back to the Consumer Energy Alliance, hoping for an interview with one of its leaders. Yet, after having invited the scrutiny, CEA suddenly became reticent, saying in emails in early October that it would be unable to provide anyone for an interview and suggesting we meet with one of their executives at the National Association of Regulatory Utility Commissioners conference in mid-November. Happily, President David Holt agreed to an interview when we asked again on Oct. 24.

In addition to its 78 energy providers, CEA also lists as members five “Academic Groups” and 146 “Consumers/Business/Agriculture/Industry/End-Users” — mostly trade organizations, chambers of commerce and labor unions. It also claims to have 500,000 other “members” — individuals who have signed up on its website to receive information.

CEA’s mission, as stated on its website — is a bit muddled. It claims to be both the “voice of the energy consumer,” and to “provide consumers with sound, unbiased information on U.S. and global energy issues.” (Emphasis added.)

So, is CEA the “voice” of the consumer or is it attempting to whisper into the consumer’s ear?

“I think it goes in both directions,” Holt said. “The foundation behind the Consumer Energy Alliance is [that] energy impacts every man, woman and child in the U.S., and there was not an organization that really talked to these other economic sectors around the country — the farming community, the manufacturing sector, and transportation and small businesses, and just basic families from a personal security standpoint — [about] how we can continue environmental improvement while we meet our basic energy needs.”

EPI and other critics say CEA is neither the “voice” of consumers nor a provider of “unbiased” information to them.

CEA’s policy positions are unabashedly pro-energy development. CEA has supported increased offshore and land-based oil and natural gas drilling and the Keystone XL pipeline to deliver oil from Canadian tar sands to U.S. refineries.

Holt said all policy campaigns are decided by CEA’s nine-member board of directors, which meets monthly via conference call and twice a year in person. In addition to Holt, the all-male board includes executives from the airline, manufacturing, insurance, retail and petrochemical sectors; none has a background in consumer advocacy.

CEA’s 2016 Form 990 shows it received almost $2.6 million for the year and paid more than $1.1 million to HBW Resources, the public relations and lobbying firm Holt founded with Andrew Browning (CEA chief operating officer) and Michael Whatley (CEA executive vice president).

Houston-based Holt formerly worked for oil and gas trade publisher Hart Energy Services, the Texas Railroad Commission, the U.S. House Judiciary Committee and the U.S. State Department. He started a public affairs business in about 2004, which he said led to the formation of CEA in 2005. “And then as business continued to expand, [HBW was formed]. And now have a pretty vibrant organization with offices in … eight states around the country,” he said.

In 2011, Salon published a report detailing the role of Whatley and CEA in what it called a “stealthy public relations offensive … designed to manipulate the U.S. political system [and] deluge the media with messages favorable to the tar-sands industry.” It quoted a Natural Resources Defense Council analyst’s description of CEA as a “front group that represents the interests of the oil industry.”

According to his biography on the HBW website, D.C.-based Whatley served as a “senior advisor” to the Trump-Pence campaign and transition team and “represents companies in the energy and transportation sectors before the U.S. Congress, the federal government, agencies and state governments.” HBW reported $850,000 in lobbying revenue to the U.S. Senate in 2017, including CEA, oil and gas producer Noble Energy, and Sunnova Energy, a residential solar and battery storage technology service provider.

On Holt’s biography page, HBW’s “core expertise” is defined as “implementing and managing expansive energy-specific advocacy campaigns to generate a full complement of stakeholder, media and grassroots support for thoughtful, Holt said CEA was “absolved” in the Wisconsin case but agreed with the PSC’s decision to exclude its petition from the record — which ended the commission’s investigation into the matter.positive energy development.”

Critics such as the Center for Media and Democracy’s Sourcewatch say HBW and CEA are actually practitioners of “Astroturf” lobbying — corporate-funded campaigns that appear to be grassroots efforts.

“Anybody with a keyboard and a blog, they can kind of say anything they want to say,” Holt responded. “There have been organizations that have said this about us in the past that frankly we’ve never even responded to because it’s in a way so outlandish. … That’s not how we do business.”

In 2014, however, the Wisconsin Public Service Commission rejected a petition submitted by CEA that listed the names of 2,500 state residents it claimed opposed net metering and supported the utilities’ requests for fixed-rate increases. The PSC excluded the petition from the record after some customers complained their names had been included without their consent.

Holt said CEA was “absolved” in the Wisconsin case but agreed with the PSC’s decision to exclude its petition from the record — which ended the commission’s investigation into the matter.

In 2016, more than a dozen people complained to FERC that CEA had sent letters to the commission in their names falsely claiming they supported the proposed 255-mile Nexus gas pipeline from eastern Ohio to Ontario (CP16-22).

CEA told the Cleveland Plain Dealer it had generated the letters based on a robocall survey, but some of those named insisted they had not been called. Nexus’ developer, Spectra Energy, is a CEA member.

Holt said CEA erred in attributing the survey responses to the name of the person registered at a given phone number even if another family member answered. “Say your daughter answered the phone and … agreed [to submit a letter], it was submitted on behalf of the phone of record, which clearly is not what we want to have happen. So we’ve discontinued that. Lessons learned, and we’re continuing to get better.”

Holt’s explanation didn’t fly with Mary England, whose husband was one of those in whose name letters supporting the pipeline were sent. “My husband has been dead since 1998,” England told the Plain Dealer.

Holt told the paper that Spectra had not commissioned the Nexus campaign. Asked by RTO Insider if CEA ever raised funds for individual campaigns, he acknowledged, “Yeah, we’ve done that a time or two in the past.”

Many environmental and watchdog groups have criticized CEA’s campaigns, which include helping to defeat a fracking ban in Pennsylvania, opposing federal low-carbon fuel standards and working with EEI to lobby the Interior Department to reduce barriers to siting energy infrastructure on federal land. Its current campaigns support natural gas pipelines and oil and gas drilling offshore and in Alaska and Colorado.

Is there anyplace CEA thinks oil and gas drilling should be banned?

“I wouldn’t say one way or the other,” Holt responded, before adding. “I’m sure there are.

“I’ve been very clear we are very strong supporters of the environment. I would think that environmental considerations need to be weighed along with energy solutions in making sure we have the proper balance.”