Interest groups play a central role in American politics, and nowhere has their influence been felt more acutely than in the areas of energy and environmental politics. Leah Stokes, assistant professor of political science at the University of California, Santa Barbara, discusses the outsized role of special interests in shaping debate around clean energy and in defining policies to address the environmental and climate impacts of our energy system.
In March, Stokes published her first book, Short Circuiting Policy: Interest Groups and the Battle Over Clean Energy and Climate Policy in the United States, the culmination of six years of research into special interest groups. Stokes shares her findings, including and strategies to overcome opposition to progressive energy policies, in conversation.
Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone. Interest groups play a central role in American politics, and nowhere has their influence more acutely felt than in the areas of energy and environmental politics. On today’s podcast, I’ll be talking with a political scientist whose work focuses on the role of interest groups interest groups in shaping our views on clean energy and in defining policies to address the environmental and climate impacts of our energy system. Leah Stokes is an Assistant Professor of Political Science at the University of California at Santa Barbara, where she lectures on energy, climate, and environmental politics. Last month, she published her first book Short Circuiting Policy: Interest Groups and the Battle Over Clean Energy and Climate Policy in the American States. In today’s conversation, we’ll look at what six years of research into the book revealed about the influence of interest groups in setting our energy policy agenda. Leah, welcome to the podcast.
Leah Stokes: Thanks so much for having me on.
Stone: In your new book, you state, “Interest group conflict is at the core of policy change in America.” How big a role have interest groups played in shaping American energy policy?
Stokes: A lot of people might think about the energy system in terms of their own daily lives, the car that they drive, whether or not they take flights for work — obviously during different times, when people are actually traveling — and also how their home is heated or cooled, or what kind of energy fuels their lights when they turn them on. But those decisions don’t rest with the individual. In my view, they don’t even fully rest with politicians or their staff. Interest groups, namely electric utilities and fossil fuel companies have really captured our political system and have shaped it in a way so that fossil fuels have become the dominant energy source that we use, and they’ve really kept that energy source in place for much longer than necessary.
So what I argue is that to understand energy policy in the American states, we have to look at the role of electric utilities in shaping laws, and also how those laws are implemented through public utility commissions, which are the regulatory bodies that oversee our electricity system.
Stone: Incumbent industries, and here I’m thinking about fossil fuels, as well as electric utilities which you just mentioned, frequently enjoy what you’ve described as “regulatory capture.” And this gives them an advantage in influencing policy. Can you tell us more about regulatory capture and how has it been used?
Stokes: So when we set up our systems of the government, one thing that we do is that we regulate companies. And that’s so that they don’t do things that harm us. You know, Elizabeth Warren has been a big proponent of this through, for example, the Consumer Financial Protection Bureau, which is a regulatory body that oversees things like credit cards and banks and loans to people, making sure that the rules are actually being followed.
Well, the same can be said for our energy system, and in fact, electric utilities are monopolies in most places, so probably you buy your electricity from a company, and you don’t get to choose to buy it from another company. That’s the case in a majority of places in this country. It’s certainly the case for me. And what that means is that we need government to oversee how these companies act, because they’re not acting in a competitive market place. Customers can’t choose for leave, for example, if they don’t like what a company is doing. And so we need government oversight through regulatory bodies — in this case, public utility commissions — to make sure that those companies are playing fairly and aren’t creating harms.
Unfortunately, what can happen is that regulatory bodies can become captured. Rather than being the boss of companies, they can become kind of the servant. And what I document in my book is, for example in Arizona, where Arizona Public Service, a big utility in that state — they have captured their regulator hook, line, and sinker. And that’s in part because the regulator in that state is elected, and what this utility did was that they sunk over 50 million dollars into a series of elections to try to change who was the regulator, what kinds of laws were on the books in that state, and so they’ve really shaped their regulatory environment. And that’s not an ideal situation. Especially with monopolies, we want to be able to have the government to set the rules of the road, so that they don’t create harms. And especially with energy companies, that means burning fossil fuels, which creates air pollution and of course carbon emissions that cause harm to everyday Americans. So we really do need our regulators to not be captured by these companies.
Stone: Now most states, Arizona being one of the few exceptions — commissioners on state public utility commissions are not elected. Is regulatory capture still an issue in those other places?
Stokes: Certainly. Elections, you might think, would help, right? — because democracy is about allowing the will of the people to be heard. But unfortunately, when you have elections for these bodies that are not very salient to people, they don’t really understand them, the turnout isn’t that high, then those boards and regulatory bodies can become captured.
You see this very prominently with rural electric co-ops. So in this country, we have three main types of utilities. We have private utilities that are overseen by these public utility commissions. We have public utilities, usually at the municipal scale that are often overseen by city councils. And then we have a third type that was created during the New Deal Era, which are rural electric co-ops, and they are overseen by co-op boards, which are elected. But unfortunately, the turnout in a lot of elections for co-ops is less than 10%, which means that the people who run those boards don’t really face a lot of scrutiny. They aren’t really held accountable if they’re not doing a good job, and so sometimes when we have elections in these kinds of spaces where people aren’t really paying attention, they’re not really voting, it can lead to worse outcomes.
Now, that doesn’t mean that having an appointed regulatory board isn’t problematic, as well. For example, at the federal level, the FERC, which is the Federal Energy Regulatory Commission, which oversees electricity that is cross-border — so that it is going across states, as well as other issues — they have been very politicized under the Trump administration, in part because of appointments that have been happening.
So if you have a very ideological executive branch, whether that’s at the state level, a governor, or at the federal level with the president, and they’re appointing very extreme people to these commissions, then those commissions can also become very problematic and polarized. And you’ve certainly seen that with FERC in the last year or so.
Stone: On this podcast, we have had Cheryl LaFleur, who is a past commissioner, who left actually last summer, discussing her concerns about politicization or polarization within the FERC, along the lines that you’ve just mentioned.
Let me go on to the book a little bit further here. So in your book, you focus a lot of attention on the state of Texas, which is home to the oil industry but is also where there was substantial clean energy policy passed about 20 years ago, particularly policies that favored wind energy. What was going on politically in Texas at that time that allowed clean energy to establish an early foothold, again in a state that is so oriented towards fossil fuels?
Stokes: Yes, throughout the 1990s, there was a network of clean energy advocates working at the national level across the states that were debating how they could start to make progress on renewable energy. In the book, I get into the early history of the industry, and there were a lot of false starts. In the late ’70s, there were incentives and laws passed that started to kick start the industry. And in the ’80s, there was a big build-out, particularly in California. But afterwards, Reagan rolled back some incentives, and the industry kind of collapsed. Lots of bankruptcies in the early 1990s, but there were advocates who were trying to figure out, “How can we make progress? This is a difficult situation, but how can we make progress?” And they were being funded by a foundation called the Energy Foundation, that still exists today, founded in 1990, that was really intentionally trying to make progress on clean energy in the United States.
So they built this network of advocates and funded them. It included groups like the Union of Concerned Scientists nationally, and then within Texas, they funded the Environmental Defense Fund and Public Citizen. And what they would do is that these advocates would meet together, and they would debate ideas. And at the time, there were a bunch of different ideas for how we could kick start the renewable energy revolution in the States. And the idea that ended up prevailing, not exclusively, but to a large extent, was the renewable portfolio standard. This is basically a law that exists in a majority of states that sets a target and a timetable. It’s a standard. It says, “You’ve got to have this amount of your electricity system coming from clean energy sources by this date.” And when Texas, in the mid-1990s was thinking about changing its electricity system, it provided an opportunity for these advocates to get their ideas onto the agenda.
So I talk a lot about how passing big laws, what we might call an “omnibus bill,” can provide an opportunity for advocates to get things done, in part because of a dynamic I call “the fog of enactment,” which is this idea that when you’re passing really big laws in technical areas with complex overlaps between federal and state jurisdiction — and especially when these ideas are new — people don’t necessarily understand what these policies will do. And so electric utilities and fossil fuel companies might not fight them as much as they would in hindsight.
And so while the Texas legislature was very focused on restructuring, these advocates managed to get some provisions into a much bigger law to set these clean energy standards. And that happened in 1999, and it started to kick start the industry in Texas. And wind has grown enormously in that state, in part because in 2005, the law was expanded in a kind of classic positive feedback cycle, where you pass a policy, it nurtures new advocates, and those advocates come back to lobby, to expand the law. And that’s exactly the kind of pattern that we would hope to see with clean energy policy.
Unfortunately, as the rest of my book documents, it’s not really that simple. It’s not just this virtuous cycle of clean energy begetting more clean energy. Unfortunately, electric utilities and fossil fuel companies have learned that they don’t like these laws, and they’ve come to attack them and have been relatively successful at weakening them and rolling them back in various states.
Stone: Now you also say about Texas in the book that when that second round of the RPS was passed for wind energy in Texas, there was also an element in there for it to promote solar power, and that that didn’t go so well, that the second time around, somebody’s interests that hadn’t really been paying attention due to what you call, again, “the fog of enactment,” were paying attention this time, and solar policy was included in the RPS, but it was not actually implemented. What happened then and how did the groups in opposition to this really start to pay more attention?
Stokes: Yes, so in 2005, there was this effort to expand the policy that was seen as a made-in-Texas success story. You know, George W. Bush had very little to do with getting that first 1999 Clean Energy Policy into the law and passed, but he ended up taking an enormous amount of credit for it. And if you read a lot of histories of that period, they will give George W. Bush credit. He ran for president in part on the work that he had done, and saying, “Oh, look. I’ve done this thing. I’m a bipartisan champion of clean energy laws.” Well that’s just not true. It was not coming from the executive branch at all. But a lot of Republican politicians, seeing the success of the law, wanted to expand it and wanted to claim credit. And at that time in 2005, there was one Republican senator, Senator Fraser, who had seen all the benefits that wind energy had brought to this district. He was up in the panhandle, in a rural Republican part of the state, and there had been a lot of new jobs, and development brought tax revenues into that area because of wind energy.
So he championed a bill in 2005 to try to expand this renewable energy law. That bill included what a lot of people knew about — the CREZ lines — which were this really big investment in transmission. And it also included a solar energy carve-out. So what that means is that when you just pass a clean energy target, what’s going to happen is the cheapest technology will be built. So if wind is cheaper than solar, that’s what everybody will build, and you’ll only get wind built.
So a bunch of advocates wanted to do for solar what had been done for wind, and so they passed a requirement in the law that said that a certain amount had to come from non-wind resources, namely solar. Unfortunately, when that law went to be implemented at the Public Utility Commission, it became clear that interest groups had managed to weaken the law in a way that the advocates did not anticipate. So when that law was being negotiated, there were people from the fossil fuel industry in the room, negotiating the exact language.
Stone: But you said the clean energy people were pushed out, right? Is that what happened?
Stokes: Yes, exactly, and this is in part because the lobbyists for the Texas Industrial Energy Consumers and the Texas Association of Manufacturers, which are these big consortiums of petrochemical companies and other big industrial companies in Texas — their lobbyist was basically best friends with the staffer in the Senate office. People described that when the legislature was in session, he basically worked out of the office. It was like he had a desk in the office. And somebody else from the lobby organization, I believe, was actually married to somebody in the office. So the ties between the fossil fuel industry and this really key senator on the energy file were just very dense. So when they were negotiating the final language in the bill, that lobbyist worked hard to make sure that the word “goal” was used in one part of the legislation, and the word “target” was used in another. And when it came time to implement, he said at the regulatory body, “Oh, you see, we used the word ‘goal’ over here, and we meant that to be binding. Like you really had to do that. But then we used the word ‘target’ over here, and we meant that to be voluntary.” And even Republican legislators who had voted for this bill wrote letters to the Public Utility Commission saying, “What? That’s not the bill that we voted for. Our legislative intent was to create a binding requirement. Why would we pass a law that just says, ‘Oh, maybe you could build some solar if you wanted to.’ No solar would be built if we did that.”
But it didn’t matter, and unfortunately, the law ended up bouncing between Governor Rick Perry and the Regulatory Commission for years, and it never got implemented. So while a lot of people today will say, “Oh, wow, Texas is going to be the solar leader, and look how fast the industry is growing.” What they forget is that the industry could have been growing in 2005. And the state could be so much farther ahead on clean energy than it is. In fact, Texas is behind the rest of the country.
The country on average gets about 36% of its electricity from clean energy sources. In Texas, it’s about 26%. So it’s 10 percentage points behind the national benchmark. So while a lot of people might raise up Texas as this amazing leader, I point out that Texas actually has the most potential for solar of any state in the country. It’s a really big state. It’s a really sunny state. It could build so much solar. But instead, it’s way behind where it could be because these fossil fuel companies manage to weaken this law and never get it implemented.
Stone: Now, there are other states where clean energy groups had appeared to gain a foothold, a legislative or regulatory foothold, only to have their gains subsequently limited. In Ohio, a renewable energy standard was overturned, while in other states, there has been pushback against net metering that supports rooftop solar. Why were the clean energy industries, which were having success in growing and employing more people, not also able to continue to build more momentum politically?
Stokes: Well, I think what we need to understand is that the odds are not stacked in their favor. When you look at the long history of electric utilities and fossil fuel companies — which I do in this book, in the third chapter — you see that these are companies that have really grown up alongside the country. They have fueled our industries, our homes, our lives, and they’ve been very politically influential for over a hundred years.
When you go back into the early era of electricity, there were people like Insull, which maybe your listeners are familiar with — Samuel Insull. And at the time when he was running parts of the Edison Company and really expanding electricity in places like Chicago, he was considered one of the most powerful business people in the country. He had the ear of a lot of politicians, and in fact it was his idea through the precursor to the Edison Electric Institute, which is the Association of Private Utility Companies — it was his idea to create these monopoly utilities so that they could build these large, centralized coal plants, bring down the cost of providing electricity, and build out the system.
So he was extremely politically powerful. And those utilities — many of them still exist today, and they maintain very strong ties with legislators. They put a lot of money into campaign contributions, into meeting with politicians, lobbying them, building up relationships over years. And you can see that very clearly in the case of Ohio.
So in Ohio, there was an effort to kick start clean energy. It was a bipartisan effort. In fact, the bill that first created the Clean Energy Law in that state was passed on Earth Day, led by a Republican and was bipartisanly supported. So you know, this was something that was viewed as a win-win back in 2009.
But what happened over the intervening decade was that electric utilities discovered that these laws were not in their interest. Particularly in Ohio, these utilities like AEP and FirstEnergy, which has just rebranded to Energy Harbor — they maintain a lot of coal plants, and they invested money into retrofitting those coal plants back around 2010, to keep them open for longer. They were faced with the decision, “Should we shut down these coal plants as new regulations like the Mercury Rule came into effect because they aren’t making money, and these regulations are going to cost money to retrofit the plant and keep them open.
And a lot of these utilities decided to keep these plants open. In fact, there are these two plants called the OVEC plants, that they plan to keep open past their 80th birthday. These are really polluting plants. They literally kill people through air pollution annually. And rather than shut them down and start moving to less expensive and cleaner renewables, they made bad decisions, and they put a bunch of debt into retrofitting those plants. And so ten years later, in Ohio, there was a competitive electricity system — meaning that these coal plants had to actually bid into a market. And if they weren’t making money, there were consequences.
Well, rather than realizing that they’d made a bad decision and that, “Oh, gosh, they’re going to have to shut those plants down,” what AEP, FirstEnergy did is that they made sure that a politician would become the head of one of the chambers in the legislature, and that he would put a bail-out for these coal plants on the agenda in 2019. And that’s exactly what they did. It’s hard to estimate how much money is flowing to keep these coal plants open, but in my book, I try to do that, and it’s potentially on the order of 5 billion dollars. And in fact, when that bailout was passed for these coal plants, to subsidize them and keep them open, what happened was FirstEnergy Solutions — now Energy Harbor — they said, “Oh, well, we only asked for money really to keep our nuclear plants open, but now that you have given us this money to keep our nuclear plants open, we’re also going to be able to keep this coal plant — the Sammis plant open, as well.”
So they’re using this money, through whatever creative accounting mechanisms, to keep a third coal plant open for longer. And you know, these are terrible decisions. Right now, when you look at the coronavirus, there’s lots of evidence that people living in more polluted air because of coal plants, for example, are more at risk of dying from this disease, from COVID, because it damages their lungs.
And we know across the board that air pollution is deadly for Americans. So it is so unethical to be taking billions of dollars to be keeping these polluting plants open for that long, and yet these companies — these electric utilities — are very politically influential. They have very strong relationships with legislators. They sink tens of thousands of dollars into elections. They make sure that the politicians who are in their pocket get into key positions of authority. And they make sure that those bills get passed. So it’s a sad story, but I think that it’s one that we have to learn if we want to start beating the fossil fuel companies and the electric utilities at their own game.
Stone: It sounds to me also like the clean energy advocates had failed to get a stronger foothold, right? So we’re talking here about what the utility companies like FirstEnergy were doing, but what were the clean energy industries doing all this time? I’m sure they weren’t just standing around and watching it happen. What were they able to do, and what were their limitations?
Stokes: Yes, I think it’s a bit of a David and Goliath story, and it’s not a happy one, where David magically wins. These electric utilities are Goliaths. They are very politically influential, and they’re very old. And the renewable energy industry is very small and nascent. Take a state like Ohio. We’re talking a couple of percentage points. I think it’s less than 3% of that state is coming from renewable energy sources. They have a decent chunk from nuclear, but they don’t really have much from renewables. And so when these attacks start coming against the industry, they don’t necessarily have an enormous amount of people employed who can mobilize. They don’t necessarily have the best lobbyists or the most money to spend on campaigns or on lobbying. They’re just really outmatched. And in the case of Ohio, what happened was when these electric utilities, though their legislative allies — people like Bill Seitz were attacking the Clean Energy Law. And they initially failed because Governor Kasich said, “Hey, I’m not going to sign a law that you pass that rolls back these policies.” Well, what they did instead is that they snuck into a budget bill, a rider, which is something that you attach to a really big law like a budget bill that has really got nothing to do with the budget. And the provision that they stuck in there was a setback rule. So whenever you’re building wind energy or really anything, there are rules about how far from a home or a property line you can build a wind turbine. And what they did was that they basically tripled the distance that was necessary to build wind projects. And people who have looked back have said that actually only two projects in the entire state would have even been eligible to be built under these new standards. So when that bill was signed into law by Governor Kasich, it froze the wind industry overnight. It’s basically impossible to this day to be building wind energy in Ohio because of these setback rules. And you know, it’s really hard for an industry to have the political clout to lean on the governor to line-item veto that part of a bill, which he could have done, when instead you’ve got electric utilities saying, “Oh, that would be pretty good for us, because if we don’t build wind energy, then there won’t be as much pressure on our crappy coal plants that are losing money in the wholesale electricity market.”
Even when the industries are more developed, like for example, in Kansas with the Wind Coalition, which did a really good job. They fielded a PAC. They ran a grassroots movement. They tried really hard to keep the clean electricity standard in place. Well, guess who they were fighting against? They were fighting against Koch Industries, headquartered in Wichita, a really politically influential company, not just in Kansas, but nationally, who has basically an entire political party through Americans for Prosperity. And they had their lobbyists leaning on specific Republican lawmakers who were voting to keep the clean energy standard in place. And every time those Republicans would come to vote on a new version of the bill, a few more would fall off, and a few more. And that’s in part because Koch Industries, the Americans for Prosperity, and the Kansas Chamber of Commerce were threatening people. They were saying, “If you don’t vote the right way on this bill, we’re going to run a primary challenger against you.” And in fact they did do that in some cases against Republicans who were on the wrong side of this issue.
So by using the primary system, fossil fuel companies have been very successful at polarizing this issue. You see it at the federal level with a person like Bob Inglis who was primaried for supporting climate action as a Republican, with somebody like John McCain. And you see it all the time at the state level, when Republicans stick their necks out to support these nascent clean energy industries, they find themselves with primary challengers and lost money. And while the Wind Coalition had their own political action committee to try to support those Republicans, they didn’t have as much money as Koch Industry or as the Kansas Chamber of Commerce. And so the playing field just isn’t even. There’s a lot more money in the fossil fuel industry to this day than the growing clean energy industry.
Stone: So you’ve brought up two issues here, right? One is the power of incumbency, that many of these utilities and fossil fuel groups actually have been around for a long time, so they’ve developed the relationships within state government to have their say heard. And the second is simply economic power. They can run campaigns for or against, or to support candidates who reflect their views.
Now, you examined the tools that interest groups use, which we just talked about. There’s a direct approach, and there’s also an indirect approach that interest groups may use when they don’t have as much political power, or not as much sway in the halls of government. What are these indirect methods?
Stokes: Like you were saying, if electric utilities have enough political influence, they can just work directly with politicians, because of their relationships, the campaign contributions they give them, et cetera. And they can do what we talked about in Texas — be very influential about the exact language that gets written into bills, or what we saw in Ohio, where they are literally leaning on these politicians to make sure that they pass a massive bailout for these coal plants by a certain deadline.
But sometimes they don’t have enough power to work directly with politicians, and even with regulators at public utility commissions. And in those cases, what happens is an expansion of the scope of conflict. This is this classic idea by a political scientist named Schattschneider, who was writing in the mid-twentieth century. And his point was, “If you don’t have enough resources to win the fight directly, what you do is you make the fight bigger. You bring in different avenues in order to win over the longer term.” And so there are three ways you can do that. You can do that through the public. You can do it through the party system. And you can do it through the courts.
So one thing you can do is if you are not able to influence politicians directly because you don’t have enough political power, is you can use the public. And there are two ways you can use the public. One is a more honest way, and that is to organize them, to convince them so that they share your interests and goals. So clean energy companies, for example, who have solar customers, that have solar on their roofs — maybe they are threatened with a rollback of net metering, where giant monthly fees will go on these customers’ bills. And so companies like the former SolarCity, now Tesla, or companies like Sunrun might organize their customers and say, “Hey, let’s go and try to influence the legislature or the public utility commission to make sure that they don’t do something that’s harmful to you.”
And you saw that very clearly in Arizona. These companies organized the public to go and protest at the public utility commission, and it was fairly successful. They did not put as big of a charge monthly as they would have, if the public didn’t show up. So that’s an idea called “outside lobbying.” You’re not lobbying directly inside by meeting with somebody. You’re using the public to come and help you lobby these politicians and regulators. But you could also do it in a far less honest way, and that’s called “astroturfing.” So in that case, what electric utilities have been doing a lot, and other fossil fuel companies, is that they’ve been pretending that they have the public on their side. They’ve been pretending that they’re some kind of grassroots movement to keep coal plants open or to block clean energy laws or to build new natural gas plants. And they do that by creating flyers, or in the most nefarious way — in New Orleans, there was a gas plant proposed, and I believe it was Entergy, the utility — they literally paid actors to show up to the city council meeting and to say, “Oh, we’d really like to build a natural gas plant, and we really hate solar.” And when the journalists were there, and they asked these people, “Why are you here? Why are you saying these things?” They said, “Oh, we were paid to be here.” Something like 25,000 dollars was paid to people to basically be actors and pretend like they were concerned citizens. You see that also in Kansas, where Koch Industries, through Americans for Prosperity and their lobbyists created a front group, a sort of shell organization. I believe it was called the “Kansas Seniors Alliance.” This organization didn’t have a website. There was nobody to contact. When the journalists went to try to find out who was behind the group, they found a lobbyist who had registered the group. And when they asked the lobbyist, “Who do you work for?”, they said, “Oh, my client is Americans for Prosperity. This is the sort of grassroots arm of Koch Industries.”
And so this was not some spontaneous uprising of Kansas seniors who were really worried about their electricity bills or really worried about clean energy. It was a fake campaign. And unless you have journalists doing amazing work to uncover it, politicians might think that it’s real. They’re very worried about public backlash. So this “astroturfing” has become a very problematic part of the ways that electric utilities are basically lying about public concern over clean energy.
The second way that these companies can influence politicians and regulators indirectly is through the party system. And we talked about that just before. Basically, if you’ve got Republicans who are pro-climate action or who are concerned about air pollution and want to build more clean energy, and they’re voting a way that you don’t like — well, you can spend money to run a primary challenger against them. And what that does, is it creates polarization. It moves the Republican party overall farther apart from the Democratic party on an issue like climate change. Because let’s say you lose. You don’t necessarily get that primary challenger to take the seat away from the incumbent Republican. Well, all the other Republicans are watching, and they’re saying, “Gosh, I don’t know if I want to vote that way on that bill, because I could find myself losing my campaign money. I could see myself with a Republican primary challenger who’s really well funded, and I could lose my job.”
And so it really strikes fear into the hearts of these politicians, and they end up becoming far less staunch champions. You see that really clearly in Kansas, because it’s literally the first time that the Republicans vote — you have as many Republicans, 44, voting to keep the clean energy law as voting to get rid of it, because they were from the Western part of the state where there are a lot of wind projects going up. They were seeing all the benefits from this industry, and so a lot of Republicans wanted to keep it. But every time they brought a new version of the bill, a few later, and a few weeks after that, a couple more politicians would switch, and more Republicans would oppose it. They would say, “Oh, we don’t need this clean energy law.” And we know because some emails were leaked from a Republican named Scott Schwab, that in the interim, the lobbyists for Koch Industries and Americans for Prosperity were leaning on these Republicans and saying, “Hey, you’ve got to switch your vote. You need to vote to repeal this clean energy law.” So the party system is being weaponized by these fossil fuel companies to create polarization.
And then the final way is by using the courts. If there’s a law that you don’t like, you can slow it down. You see this very clearly with the Mercury Rule. In 1990, when the Clean Air Act Amendments were passed federally, there were rules for nitrous oxide, sulfur dioxide, and there was a requirement to study the issue of mercury.
Well, it took more than two decades to finally get a mercury rule finalized, because these electric utilities kept resisting the implementation. They had lawsuits against the federal government implementing the law. The same can be said of PURPA, the Public Utility and Regulatory Policies Act. This was the first time that independent power companies could start to build renewables and to compete against monopoly utilities. And the utilities didn’t like it. And so they took the government to court. I believe it was American Electric Power, AEP, and they tried to slow it down. Now of course they don’t necessarily win. In that case, AEP lost that court case. But what it does, it buys them time. And when you think about the Clean Energy Transition, time is money for these companies, right? The longer you can delay action, the more fossil fuels you can burn, the longer you can keep your coal plants open, the more you can pay off your debt, the more money you can make. And so delay pays these companies back. So even if they don’t win every court case, they are really profiting from slowing down implementation.
Stone: One recommendation you make is for clean energy interest groups to adopt the playbook that has been used against them. What tools would you see them using?
Stokes: Yes, so I think that the clean energy industry, as it grows and becomes more professionalized, has to invest more money into politics and lobbying. You’re seeing right now the struggle that groups like the Solar Energy Industries Association, SEIA, and AWEA, the American Wind Energy Association are having federally, where the bedrock tax incentives that have helped propel that industry — that’s the Production Tax Credit and the Investment Tax Credit — you know, they’re going away. And those industries have not been able to extend those tax credits, either last winter through the Budget Bill in 2019, or even more recently through the Coronavirus Relief Bill. You know they’re working very hard to try to do that, but they just don’t have the same political clout to influence Congress. And so one thing that they might want to do is build a public campaign to try to raise the issue.
Climate change, in an abstract way, has become very popular. And the Green New Deal as an idea is very popular. But nobody is really talking about these tax incentives or other things that we could be getting into a coronavirus stimulus bill, let’s say. There are academics talking about that, and industry is talking about that, but what about a public campaign that says, “Here’s the way that we can solve the climate crisis and rebuild our economy.” I think that would be very powerful.
And these same levers that these electric utilities and fossil fuel companies have been using — they are available to clean energy advocates and environmental groups. There are definitely some examples of groups doing a great job of this. So in terms of using public opinion, I would highlight the work of the Yale Project on Climate Change Communication, which has for many years been making these maps that show — and my colleagues at U.C. Santa Barbara are very central to making these maps — and they show district by district, what do people think about clean energy? What do they think about climate action? And getting that information in front of politicians can help them understand how much support there is for acting on climate change.
I’d also say that the think tank Data for Progress is doing an amazing job of running public opinion polls on policy and just showing how much support there is for climate change. They had a poll a week or two ago that showed that climate change is a massive wedge issue between Trump and Joe Biden because a lot of Republicans are disappointed by Trump’s record on climate and on environmental issues more generally. So this is a way that Independents and even young Republicans might come to support the Democratic Party. And it’s also an issue where Progressives are really excited. So I personally feel that Joe Biden doing more on climate change is a win-win. It will bring him more voters from the right, and it’ll bring him more support from the left. And Data for Progress has been really critical at highlighting these facts, because they’re using public opinion, and they’re communicating it very effectively.
In terms of using the party system, I would raise the group Justice Democrats as an example of somebody on the left that’s trying to make sure that the Democratic Party is more focused on climate change. What they’ve been doing is running primary challengers against Democrats that are not progressive on climate change. This is how Alexandria Ocasio-Cortez, the Green New Deal champion, was elected. And we had a very close race just about a month ago in Texas, with an incumbent Democrat who’s not great on climate, and he was challenged by a young woman named Jessica Cisneros, and she almost beat him, which was amazing. So we’ve got to be saying to Democrats that if you are not talking about climate change, if you are not voting on climate change, if you are not prioritizing clean energy, you are going to face challenges, because it’s what the right has been doing through fossil fuel companies and electric utilities for decades. And they’ve really been very effective at keeping the issue off the agenda by doing it.
And then finally, there are a lot of court cases playing out, so there are groups trying to challenge fossil fuel companies. Those are attorneys general, for example, in New York and Massachusetts, but also cities like Baltimore, saying, “Hey, Exxon or Shell,” or whatever the fossil fuel company is, “You are going to create all this sea level rise, and it’s going to dramatically affect our city, and you need to pay us for the damages that you caused.”
So I think that the climate movement is maturing, and that clean energy companies are investing more money in politics, and that all of these strategies will hopefully start to bear fruit.
Stone: In California, there’s something called “public interest intervenors,” and that is in place basically to help overcome kind of the funding gap, right? — so that clean energy advocates or environmental advocates can get more funding to advocate for their views. Can you tell us a little bit more about what that’s doing?
Stokes: Yes, so in the conclusion of the book, I talk about some solutions to these problems, and one big issue is that the clean energy advocates and the environmental advocates don’t have as much resources. If you are a monopoly electric utility, you get a guaranteed profit from the regulator, and then you can invest that money back into lobbying the regulator, to make sure you get profits, or to weaken clean energy laws. There’s just kind of endless money for electric utilities to show up and influence policy. But that isn’t the case for clean energy companies. They don’t get guaranteed profits, and the same for environmental groups that are NGOs, that are basically taking donations. They don’t have endless money to work on it. So what if we got more resources for these clean energy advocates that are really advancing a cause in the public interest?
Well, that’s what has been the case in California since the early 1980s. There’s a program call the Intervenor Compensation Program, and what it does is it pays advocates — groups like The Utility Reform Network, TURN, to show up in the public utility process and to advocate, create briefings, make arguments in the public interest that would be, for example, about air pollution or climate change or keeping electricity rates low so that customers can afford to pay their bills. Things like making sure that electric utilities are maintaining their lines, so that we don’t spark deadly wildfires. That’s what this program does.
In the book, I calculated that it costs every Californian about 17 cents a year to pay for this policy. That’s very little money. You could probably find 17 cents in your drawer, and it returns back to the Californian consumers hundreds of millions of dollars a year. So when independent evaluations of this program have been done, it has been shown to be really a fantastic program. And it only exists in a couple of states. Recently Hawaii had an effort to try to get it passed, but they didn’t. But I think that this would be something really exciting that advocates could get behind.
And what it would do is it would provide resources for the long-term, so that we could have clean energy advocates who are specialists in, for example, electric vehicles or electrifying buildings, getting fossil gas out of homes. We could have all of these groups show up at these fights and advocate in the consumer and public interest.
Stone: Are there any places in this country, any states where clean energy interests have reached the point that their influence has equaled or surpassed that of fossil fuel in utility groups?
Stokes: Yes, I would say California is that state. I did an enormous amount of work on California for this book. It’s not one of the chapters in the book, but I interviewed tons of people in the state, and I have so much information, I have to figure out what I’m going to do with it. So I know a lot about the California case, and obviously I live here.
So what has happened is that over time, that positive feedback has taken hold in California. A lot of the electricity system is now clean. We have a 100% clean electricity standard on the books, and partially what’s happened in California is that the unions have gotten very involved in this. They’ve discovered that they can have good-paying jobs in the state, through these clean energy policies, in part because the law was designed to keep the majority of the clean energy developments in California. This is through something called the “bucket system.” Basically in order to qualify for meeting the clean electricity rules in California, you have to be delivering real electricity into the California market. And that was designed very intentionally to make sure that, for example, you didn’t just bring in Washington or Oregon hydropower resources that already exist, and just what’s called “resource shuffling” where these are already clean energy sources, and California wants to buy them at a premium. And so all you’re doing is bringing in electricity from another part of the country that already exists, as opposed to building new wind and solar and geothermal in the State of California that adds to the overall country’s capacity for clean electricity. The side effect of that rule is that unions have been able to build a lot of new infrastructure in California, and they’ve made good-paying jobs through that, and they’ve really come to protect the policy. So unions are quite politically influential in Sacramento, and they have managed to keep this policy growing over time. They have fended off attacks against the policy, and so yes — I would say that that marriage between clean energy companies, which are largely based in California — they operate in many other states, but a lot of them are based in California. So they bring a lot of money into the state. They have influence with the governor and the legislature. Those companies, as well as unions, have proven really influential. And that’s great, because a lot of unions in this country have been really big problems when it comes to cleaning up our energy system.
There’s another recent book out called Carbon Captured by Matto Mildenberger, and he documents the history of fossil fuel-tied unions resisting climate policies at the federal level. So it’s a happier story to finally start having some unions in the clean energy economy, seeing the benefits of this transition and helping to keep policies in place.
Stone: Let me ask you a final question here. How do you expect the battles for influence to play out in the coming years? Will opposition fade? Will it get even stronger? What do you see happening?
Stokes: Well, one thing I tried to do in this book is to benchmark against what needs to happen. I feel that the Green New Deal has shifted the conversation, where it’s not about, “Let’s pass a little policy, and then it will slowly take us down the emissions curve, and yay — we’re winning!”
Well, you have to actually ask yourself, “What’s necessary to be done?” It’s not enough to put a band-aid over an open artery. You actually have to stitch the artery up. And so we have to have solutions at the scale of the problem, and we don’t have solutions at the scale of the problem right now. Even places like California and New York that are ahead of the curve — and there are a few other states like New Mexico, for example, and Washington State. There are a bunch of states that are working on this issue. You know, their targets are 2040 or 2045 or 2050. And if we really want to get serious about cleaning up our electricity system, which would give us so much leverage over our transportation system through electric vehicles and over our building sector, through electrifying our homes and our offices, and no longer burning fossil gas everywhere. If we really want to get serious about that, we should be talking more about 2035, for example, as a target for cleaning up our electricity system. There are really no states across the country that are talking at that scale.
So I feel that progress will happen. I think 2019 was a banner year in some ways for renewables. But you have to remember that it was partially a banner year because the production tax credit was expiring and didn’t get extended, and the investment tax credit is stepping down. And so we could see a bad year in 2020, between coronavirus and those federal tax credits going away, it could be a really bad year for the industry.
And that’s what you see all the time. If you go back year over year, we’re not seeing the industry growing as much as people think. They tell themselves stories about how, “Oh, wind and solar are dropping in cost,” and “We’re just cleaning up the electricity system at ever and ever faster rates.” And the data does not bear that out. We have some years where we clean up 1.3 percentage points of the electricity system. So if you have a hundred slices of the pie, we’re doing about one-and-a-bit slice in a really good year. And then we have other years where we’re doing half a slice of pie. And there are a hundred slices of pie. So we have got to be moving faster than one slice a year, because we don’t have until 2100 or later to clean up the electricity system.
So I think we need federal leadership. We need standards and investment and justice to be the center or our approach, and I’m hopeful that Joe Biden will become the next president, and that we will take back the Senate, and we’ll start to have federal leadership on this issue. Because without federal leadership and investments, I think that the states are going to struggle to make as much progress as is necessary.
Stone: Leah, thanks very much for talking.
Stokes: Oh, thank you so much for having me on.
Stone: Today’s guest has been Leak Stokes, Assistant Professor of Political Science of the University of California, Santa Barbara. Her new book is Short Circuiting Policy: Interest Groups and the Battle Over Clean Energy and Climate Policy in the American States.
Thanks for listening to Energy Policy Now, and have a great day.