Why and How Fossil Fuel and Utility Interests Are Attacking Clean Energy

The Energy and Policy Institute released a report last week documenting how and where fossil fuel companies and front groups have attacked renewable energy standards and net metering policies throughout the country in 2013 and 2014.

Our report is the first roadmap of a shadowy network of front groups, a majority of which receive funding from fossil fuel interests, that have been the primary advocates of rolling back state-level renewable energy policy across the country.

Let's start with why fossil fuel and utility interests are attacking clean energy: They are concerned about the rise of cheap clean energy and are financing efforts to delay the growth of a market competitor, including spreading disinformation about the cost of clean energy.

The price of a solar panel has dropped more than 60 percent since early 2011, and the price of wind power is down by more than 50 percent in the past four years. Approximately 29 percent of the power added in 2013 in the United States was solar energy.

Why would Koch Industries and other fossil fuel interests want to make clean energy seem expensive? Because they have a financial interest in squashing that market. The Koch Brothers and their allies want to continue selling as much coal, oil, and gas as possible -- and in their effort to rollback clean energy policies, are spreading falsehoods about the energy market.

These attacks on pro-clean energy policies are not about creating "free markets," as opponents of clean energy policies, like the State Policy Network (SPN) and the American Legislative Exchange Council (ALEC), claim. ALEC connects corporations to state legislators and produces model legislation benefiting corporate special interests. SPN is a network of state "think tanks" that advocates for many of the model bills produced by ALEC. These groups are working to manipulate markets on behalf of their allies (and financiers) in the fossil fuel business.

In a majority of states in the U.S., there is no free market for electricity; individuals cannot choose from which company to buy their electricity or from what source their electricity comes. In many locales, Public Utilities Commissions regulate monopoly utility companies in a closed marketplace.

Renewable energy standards (RES) and net metering policies are sparking massive investment and deployment of clean energy technologies. And these two key policies, which drive more of the grid to clean energy, are now under assault at the state level from fossil fuel and utility interests.

Renewable energy standards set requirements for utilities to slowly increase the use of clean, renewable energy sources. RES laws have driven billions of dollars of investment into clean-tech projects and generated thousands of jobs. One front group, the fossil fuel-funded Heartland Institute, sponsored model legislation at ALEC's meeting in June 2012 to eliminate renewable energy standards. In the past year and a half, these rollback attempts have surfaced in at least 15 states around the country.

Net metering policies ensure that utilities pay consumers the full retail price for electricity generated by customers when they invest in distributed energy systems (like a rooftop solar system). Edison Electric Institute (EEI), the utility industry's trade association, "worked with ALEC on the [model] resolution" calling for the weakening of solar net metering policies, which was approved during ALEC's meeting in December 2013, and has now appeared in numerous states. EEI released a report in January 2013 entitled "Disruptive Challenges" detailing the threat that distributed energy (especially solar) poses to the traditional utility industry business model. The group began taking action on the issue in 2013, pushing to repeal solar policies to protect utilities' financial interests.

However, the real genius of this attack by special interests is the widespread use of additional front groups to lobby, spread disinformation, and pressure decision makers to eliminate clean energy policies.

The fossil fuel lobby aggressively uses lobbying and propaganda to achieve their goals and self-identified "free market think tanks" are among the most effective advocates for the fossil fuel industry to lobby for policy changes. Dozens of these so-called free market organizations, a majority of which are members of the State Policy Network (SPN), which works to influence state-level energy policies and attack the clean energy industry.

These organizations are usually described in neutral, nondescript terms, such as "think tank," "institute," or "policy group," but publicized internal documents from the American Tradition Institute, Heartland Institute, and the Beacon Hill Institute suggest that these types of organizations embrace transactional relationships with the corporate lobbying interests that fund their operations.

The Beacon Hill Institute, a "think tank" based out of Suffolk University (and a Koch-funded member of SPN) submitted a controversial grant request to the Searle Freedom Trust, a prominent conservative foundation, in which they expressly stated: "Success will take the form of media recognition, dissemination to stakeholders, and legislative activity that will pare back or repeal [the Regional Greenhouse Gas Initiative (or RGGI)]." In other words, the Beacon Hill Institute proposed pursuing biased economic research to support the express goal to "pare back or repeal" a regional climate change accord -- all before the institute performed any research determining the economic effect of the law.

Another example of the pay-to-play nature of these so-called "think tanks" comes from Heartland Institute's internal fundraising documents, which state: "Contributions will be pursued for this work, especially from corporations whose interests are threatened by climate [change] policies."

Despite positioning themselves as ideologically-focused on smaller government, dozens of these organizations aggressively denounce policy investments in clean energy as market-distorting and unnecessary, while remaining silent on the far-larger, decades-old stream of taxpayer dollars and policies supporting oil, gas, and coal interests.

Over the years, government support for fossil fuels has come from a variety of sources: tax deductions, tax credits, direct subsidies, cheap access to public property, pollution remediation, research and development, and entire government agencies devoted to helping promote and assist fossil fuel industry growth. By all credible measurements, fossil fuel subsidies are massive and extremely unpopular, and are flowing to some of the most highly profitable industries on earth. Yet, fossil fuel subsidies go largely unmentioned by these "free market" groups, such as the Heartland Institute, despite their avowed opposition to wasteful government spending.

Fossil fuel-funded front groups operate in multiple areas to influence the policy-making process in their attempts to eliminate clean energy policies. First, groups like the Beacon Hill Institute provide flawed reports or analysis claiming that clean energy policies have negative impacts. Next, allied front groups or "think tanks" use the flawed data in testimony, opinion columns, and in the media. Then, front groups, like Americans for Prosperity, spread disinformation through their grassroots networks, in postcards mailed to the public, and in television ads attacking the clean energy policy. Finally, lobbyists from front groups, utilities, and other fossil fuel companies use their influence from campaign contributions and meetings with decision makers to push for anti-clean energy efforts.

Ultimately, clean energy's downward cost trends pose a serious threat to the fossil fuel and utility industries' business model. Until recently, the electricity grid relied on centralized, mostly fossil fuel power plants to meet electricity demand. The emergence of affordable, clean electricity presents a serious threat to an industry that's operated largely in the same way since Thomas Edison turned on the first investor-owned power station in 1882.

Instead of advocating for a fair and free market for electricity over the past year and a half, fossil fuel front groups have advocated to repeal, freeze, and eliminate pro-clean energy policies across the country on behalf of allies and funders in the fossil fuel industry. Fortunately, red states and blue states have rejected the efforts by fossil fuel special interests to gut state-level renewable energy policies - but the battle over our energy future is just beginning.

Read the Energy and Policy Institute's report on state-level attacks on renewable energy here.