Powerful US utilities secretly fund ‘grassroots’ groups to sway cities away from switch to public power

“If this happens, then Ann Arbor is no longer paying them for electricity, so that cuts into their profit margin, so obviously they oppose it,” Higgins added. The front groups are one in a broader suite of tactics utilities use to hide their identity in regulatory, political and public opinion battles.

Advocates say the front groups at times have resorted to especially unusual measures – in St Petersburg, for example, the industry allegedly recruited some of their canvassers from the parking lots of plasma centers where people donate plasma for money.

In a statement to the Guardian, DTE Energy touted its work to upgrade and improve its grid in Ann Arbor, but did not respond to questions about whether it was behind A2rec.

“We’re in agreement with the Ann Arbor Responsible Energy Coalition that the path of a city takeover of the electric system will only serve to put a financial strain … on Ann Arbor,” a spokesperson said.

In most states, municipalities can legally take over the grid from private or investor-owned utilities, a process called municipalization. The municipality must pay the utility a fair price for the grid’s infrastructure before it establishes its own power company. The process is long and complicated, and utilities legally resist it, though some communities have succeeded.

Federal data shows public power companies’ bills, on average, are about 14% lower than private. That is in part because private utility profits that go to Wall Street investors are baked into customers’ bills. Public power companies do not need to earn those profits, and excess revenue is typically invested in the grid or used to lower customers’ bills.

Public power advocates have tried to convince city leadership to municipalize the grid since 2018, but officials and council members who advocates say are aligned with DTE, stymied the push. The city instead opted to push for a “Sustainable Energy Utility” in which residents can buy energy generated by renewable sources in Ann Arbor. The city hired a former DTE executive to run the program, which will leave the company in charge of its deteriorated grid, and continue to expose customers to annual steep rate increase demands.

Ann Arbor for Public Power wants to fully cut DTE out of the equation. It aims to put municipalization up for a citywide vote and is collecting signatures to get the issue on the November ballot – advocates say the front operation is timed to derail that.

‘Crushing costs’

In recent weeks, blasts of social media ads and A2rec’s canvassers hit residents with claims that public power would saddle Ann Arbor ratepayers with $1bn in debt and up to 40% rate increase.

The language in a door hanger suggests a homegrown movement: “Our city cannot afford a government takeover of our power. We deserve reliable, affordable, clean energy – but a city-run utility is not how we get there.”

The door hanger warns of “crushing costs” including $700 yearly increases in power bills. A customer paying $100 per month on their electric bill would be paying about $650 per month in 10 years, according to DTE’s calculations.

The claims are “wildly inaccurate”, public power advocates say, and sourced from a study that DTE funded. Advocates point to an independent study commissioned by the city of Ann Arbor, which put the cost at about $300m. Residents would quickly see reductions in bills.

A2rec’s campaign finance filings show $25,000 in donations from the Edison Electric Institute, a national lobbying group for the industry, and over a dozen DTE donations totaling near $1.9m. Records do not show any donations from residents in Ann Arbor, and none from Michigan residents who do not have connections to the company.

The front group is “DTE’s playbook 101”, said Yousef Rabhi, who is part of Ann Arbor for Public Power. The former state representative regularly introduced clean energy and utility affordability legislation that DTE worked to kill during his 2017-2023 tenure.

“They have so many front groups that I’ve lost count by now,” said Rabhi, who is running for Ann Arbor mayor and includes public power as a campaign plank. “This is another attempt by DTE to pull the wool over voters’ eyes, and the things they’re saying are complete fabrications.”

In a statement posted to social media last month, A2rec admitted its connection to DTE and denied that it is running an astroturf campaign.

“It’s true DTE helped get this legal entity set up,” the statement read. “We are not hiding that, and we are fully compliant with all campaign finance reporting requirements.”

None of the literature and ads reviewed by the Guardian show DTE or industry funding sources, and A2rec in late April amended its campaign filings to replace its corporate address in Washington DC with a local post office box.

Backlash

Ads and talking points with similar figures as those in Ann Arbor have been pushed for months by connected industry-backed front groups opposing public power campaigns in Clearwater and nearby St Petersburg. The two cities, with a combined population of 400,000, are exploring the municipalization of grids currently owned by utility giant Duke Energy.

Two industry-backed groups, Clearwater Energy Alliance and Pinellas Energy Alliance, launched their campaigns late last year, claiming in literature that municipalization “could take generations to pay off”.

Public power advocates initially could not tie the groups to Duke because they are funded by dark money – Florida has looser campaign finance reporting laws than Michigan, Marley Price, co-founder of the Dump Duke public power advocacy group, said.

However, two Tampa Bay Timesinvestigations in recent months found connections among energy alliance front groups, Duke, and the industry effort to kill Maine’s public power push. One investigation identified an apparent architect of the Florida campaign as Willy Ritch, a Democratic strategist and utility industry operative who runs the Salt Public Affairs firm. He also appears to have been in part behind the Maine operation, the Times found.

The investigation discovered other parallels among the front operations in each state, like shared phone numbers, and similar language and claims. The email attached to the Florida front group sites was also attached to webpages for the energy alliances opposing public power campaigns in Ann Arbor and San Diego.

Price said she alerted Ann Arbor for Public Power and advocates in San Diego to the findings. In recent days, Michigan campaign finance records showed a new $54,000 donation from Ritch’s Salt Public Affairs to A2rec.

Are the campaigns effective? While industry resoundingly defeated the public power campaign in Maine, and Price said she has heard residents repeat some of the Florida front groups’ talking points, she suspects the operation is largely backfiring.

Attempts to conceal their identity and questionable tactics, like hiring people off of Reddit or in plasma center parking lots, has generated widespread suspicion, Price said.

“Especially in St Pete, it has had more of a negative impact,” Price said. “They’re definitely spending more money which is making people frustrated because this is probably coming from our utility bills in one way or another.”

In Ann Arbor, Rabhi said “the fact that they’re fighting so hard should be an indication to Ann Arbor voters that we’re doing the right thing”.

“DTE is evil, and what we’re doing here is trying to undo the grips of that fossil fuel corporation, and move to a renewable energy future that is reliable, cheaper and not going to happen with DTE as our energy provider,” Rabhi said.