In Mike Pence, Donald Trump has picked a running mate who could be relied on to take a chainsaw to President Obama’s signature environmental policy.
In 2015 the Indiana governor told Obama in no uncertain terms that his state would not be complying with the Clean Power Plan, which sets targets for reducing power plant emissions in each state. Pence joined a lawsuit that has succeeded in tying up the plan in court.
He and other climate change-denying policymakers have benefited from a well-coordinated network of industry front groups, conservative think tanks, and law firms bent on blocking the Clean Power Plan. A good chunk of the funding for this cabal comes from some of the country’s largest electrical utilities companies.
Where do they get all that extra spending money? It turns out public utilities are champion tax dodgers—the dodgiest of all U.S. business sectors, in fact.
According to a new report by the Institute for Policy Studies, 23 of the 40 publicly held utilities that were profitable in 2015 paid no federal taxes that year. Sixteen of them paid no state income taxes.
The most extreme example last year was Southern Company, which reaped $210 million in federal and state tax refunds, despite $3.6 billion in pre-tax income.
This Georgia-based firm, with nine million customers in the southeastern United States, is a fierce Clean Power Plan opponent. In comments to the Environmental Protection Agency, the firm warned the plan would result in “a complete deconstruction of the nation’s electric sector.”
Southern officials also did their best to make their customers’ hair stand on end by claiming the CPP would put $35 billion in upward pressure on their rates over the next 15 years. By contrast, the administration forecasts $80 per year in average savings per household through increased efficiency.
Southern CEO Tom Fanning pocketed $11.8 million in compensation last year and steered a good share of the rest of the proceeds from tax-dodging into blocking the Clean Power Plan through various industry groups, such as the American Coalition for Clean Coal Electricity. That outfit is in turn a member of the Utility Air Regulatory Group, a petitioner along with Pence’s state of Indiana in the lawsuit to overturn the Clean Power Plan. The company is also a major Capitol Hill presence in its own right, having spent more than $25 million in federal lobbying in 2013-2014.
Pence and his utility industry partners against the CPP say they’re looking out for the public interest. They claim the EPA’s rules will be expensive for ratepayers and cost jobs. And yet if they were truly interested in what’s best for ordinary Americans, they would be investing much more in energy efficiency, the cheapest and fastest route to reducing carbon emissions.
Utilities are required by law to invest in “demand-side” energy efficiency at the consumer end, but the patchwork of state and federal programs have not gone nearly far enough to mitigate climate change and move the country towards a clean energy future.
Most of these programs also require home and building owners to invest significant up-front capital and so low-income households often cannot participate. And since such programs potentially reduce utilities’ profits by reducing energy demand, the firms have had little incentive to do more.
It would make far more sense to plug the loopholes that have allowed these highly profitable utilities get away without paying their fair share of taxes. Then invest the revenue in projects that would benefit everyday Americans, especially low-income and communities of color. If Southern had paid the full statutory federal and state tax rates last year, for example, they would’ve contributed nearly $1.5 billion to public coffers—enough to fund 9,000 good jobs for people in retrofitting homes or building wind turbines.
If all 40 profitable utilities had paid their fair share at the state and federal levels in 2015, they would’ve paid about of $14 billion in additional revenue. That would’ve been enough to create 88,000 energy efficiency jobs or weatherize homes for up to three million low-income families.
Of course such sensible plans would have as much chance of happening under a Trump-Pence administration as a snowball’s survival in you-know-where. This climate change-denying duo would be too busy butchering environmental protections to bother with tax-dodging utilities.