State should end 'dark money' spending
October 14, 2020
Lumpy, a walking, talking lump of coal wearing a miner’s hat and gloves, serves as the Energy Policy Network’s mascot. “Affordable and plentiful, I keep America’s lights on and economy moving,” Lumpy says in a speech bubble on EPN’s website.
To be charitable, I won’t offer what else Lumpy resembles. I will offer a rewrite of his speech, though. He should be saying, “Thanks for the handouts, Wyoming taxpayers!”
Because while coal is still plentiful, it’s no longer affordable, either in economic or environmental terms. But that hasn’t stopped Equality State politicians from wasting resources trying to prop up a crumbling industry that the free market has already passed judgment on.
It’s no secret that Wyoming’s Legislature and governor are all in on coal. But I doubt most taxpayers realize Wyoming will spend $500,000 over the next two years to fund the nonprofit EPN. And I’m certain that until recently, residents of states where the organization is at work weren’t aware that Wyoming is behind unethical efforts to form phony “grassroots” coalitions that lobby their regulatory agencies.
Fortunately, a collaborative investigation between WyoFile and Wyoming Public Radio has lifted the veil of secrecy over the state’s dark-money contributions to the coal advocacy group.
Groups like EPN with 501(c)(4) nonprofit status don’t have to disclose their donors. Many wealthy individuals, foundations and corporations that are involved in political and regulatory affairs have used the designation to keep their contributions secret — a stealth practice critics term “dark money.”
The practice is unheard of among states, however. At least it was before Wyoming began funneling taxpayer dollars to EPN.
The Wyoming Legislature and then-Gov. Matt Mead began the state’s relationship with EPN five years ago, before Gov. Mark Gordon’s first year in office in 2019. During this year’s session, the Legislature created a $1 million “coal marketing” fund at the governor’s request. Gordon used it to sign the state’s two-year, half-million-dollar contract with EPN in September.
It was a questionable move by any reasonable standard but certainly for a governor who has consistently promoted transparency in state government.
Gordon and members of his administration portray the state’s relationship with EPN as a “wise investment” that has paid Wyoming huge dividends. The group and the state claim their collaboration has preserved $38.5 million in annual tax revenue from Powder River Basin coal sales to out-of-state utilities that had been scheduled to close.
It’s a dubious claim at best. Opposition groups say EPN has vastly overstated its role in keeping four coal-burning power plants open, and the amount of coal used at the plants has dropped precipitously since 2018.
EPN’s first claim of victory came in 2016 with its intervention in keeping the 1,138-megawatt Sooner Generating Station open in Oklahoma. But while EPN says the state regulators’ decision has kept the plant burning 2.6 million tons of PRB coal per year, the plant used less than a half-million tons midway through 2020, which is proving a devastating year for coal amid an economic slowdown and ongoing energy grid transformation.
Oklahoma Gas & Electric had sought permission to install new pollution controls on the plant to keep it operating, over the objections of environmental groups and wind energy and natural gas companies. EPN assembled a coalition that included Michelin Tire, American Airlines, railroad companies and rural electric co-ops to campaign for the upgrade.
Oklahoma ratepayers got the $500 million bill for the new equipment.
When a Colorado utility sought to close two units at a power plant burning PRB coal, EPN wore the cloak of the “Coalition of Ratepayers,” which billed itself as a local group advocating for small businesses and residential ratepayers.
A similar effort in Indiana was fought by a “local” coalition that EPN created, along with a media relations firm and an attorney who cross-examined utility experts.
EPN’s hijinks in both Colorado and Indiana failed, but they typify the playbook the group has used in many states: Launch fake homegrown stakeholder groups, like the Arkansas Affordable Energy Coalition for example, to campaign against coal unit retirements and conversion to cheaper natural gas or renewables.
Utility regulatory commissions believe they are just hearing concerns from local residents and businesses, but behind those locals is an earful of Wyoming’s political spin and industry message points.
I have no doubt that if the situation was reversed, and another state tried to dishonestly enter the regulatory fray to allow Wyoming’s coal-fired power plants to convert to natural gas or renewables, state officials would scream bloody murder.
EPN and Wyoming argue their joint effort is justified because liberal billionaires, organizations and corporations funnel huge sums of money to environmental groups like the Sierra Club. The difference, obviously, is that instead of private funds, Wyoming is using taxpayer money.
That’s bad enough, but it’s compounded by the fact that Wyoming simply turns the whole operation over to EPN, which decides on its own how to use the state’s money with no accountability.
State officials say they put limits on the work EPN can do for the state, and contract the group mostly to conduct educational activities and advocacy. But Randy Eminger, who runs EPN by himself, told WyoFile/WPR that the Legislature just appropriates the money “and tell[s] me to go do what I think is best.”
Now that’s job security! Just tell Wyoming officials that you’re saving the state millions of dollars without even being required to produce any evidence, and the money will keep flowing into your group’s coffers.
It’s an outrageous relationship, but if the public doesn’t demand that the Legislature at least institute accountability measures it’s likely to continue unabated — at least until there are no more coal-fired power plants operating in other states to keep EPN in business.
Wyoming faces a $1.5 billion deficit for the 2021-22 biennium, prompting Gordon to call for state agencies to cut their budgets by 10%, with another 10% reduction likely.
State programs that serve Wyoming’s most vulnerable citizens — seniors, the poor and mentally ill — are taking devastating cuts.
A half-million dollars could mean the difference between a program’s survival and its elimination.
When he announced the contract with EPN, Gordon tried to positively spin his decision. Instead, he crystalized what’s wrong with Wyoming’s maniacal and increasingly desperate crusade to prop up a dying coal industry.
“Extending the life of coal is a wise investment for Wyoming, wise investment for the globe,” the governor said.
It’s a statement that completely ignores the reality of coal’s impact on the climate and Wyoming’s need to develop new industries.
Want proof of the selfishness spawned by Wyoming’s single-minded obsession with eking out a few more years of tax-revenue? Look no further than its financing of EPN’s attempt to convince Indiana regulators to stop the Indiana Michigan Power Company from retiring a unit of the Rockport Generating Plant in 2022.
The Center for Public Integrity has labeled Rockport one of the nation’s 22 “Super Polluters.” Toxins spewed by the plant travel all the way from Indiana to the eastern seaboard.
Wyoming doesn’t have to keep going down this poisonous path. It should put aside the other $500,000 left in its coal marketing fund and redirect it toward in-state efforts to promote renewable energy for electric generation that environmentally conscious western states are already anxious to buy.
EPN’s “Lumpy” doesn’t have to be Wyoming’s lasting legacy.