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As Duke Energy promotes contentious energy legislation in North Carolina, a new analysis shows the Charlotte-based company and its associates have been pouring money into state politics like never before — spending at least $1.2 million on an intricate web of campaign contributions over the last 18 months.
The spate of donations from board members, Duke’s employee political action committee, and the company itself follows its push in 2019 for lopsided multi-year ratemaking legislation — a measure critics said would have fleeced ratepayers and that ultimately fell to bipartisan opposition in the House of Representatives.
The company’s outlays since its defeat show a clear pattern of rewarding those who backed it that year and punishing those who didn’t. The bulk of its beneficiaries have been Republicans who control both chambers of the General Assembly.
Now that Duke is pushing a second attempt at multi-year ratemaking — one component of sweeping legislation that detractors say weakens utility oversight, harms ratepayers, and slows the clean energy transition — rumors are rampant that the company is setting the stage for another electoral push to help Republicans next year.
‘Impossible to trace’
The traceable contributions are only the tip of the iceberg, said Bob Hall, a MacArthur fellow and veteran campaign finance expert who pored over a wide range of reporting forms to produce the new research.
“It is impossible to trace all the ways Duke spends to influence policy and election outcomes,” he said. “They can use a different bucket at different times.”
Campaign finance law allows Duke to contribute unlimited “dark money” to political groups not required to disclose their donors, and many Democrats believe the company used such outlets to pour millions of dollars into last year’s election to help Republicans maintain their majority.
A report Duke must submit to federal regulators, called Form 1, could provide evidence. It shows Duke’s two utilities in North Carolina spent nearly $10 million on “General Advertising Expenses” and over $25 million on “Donations” in 2020. They also spent a combined $16.3 million on “Certain Civic, Political, and Related Activities,” more than twice what they spent in each of the previous five years.
“That’s a telling number,” said Hall, a founder and longtime former director of nonprofit Democracy North Carolina. “It’s basically part of their overall political operation. It’s all aimed at protecting their status as this very special creature: a so-called regulated monopoly.”
Asked about the Form 1 line items, Duke spokesperson Erin Culbert said via email that the categories were “very broad,” and included charitable donations as well as contributions to political groups. “All our political giving is done in compliance with relevant laws and disclosure requirements,” Culbert added, “and is funded by Duke Energy shareholders.”
One definite recipient of Duke’s giving: the 527 political group Citizens for a Responsible Energy Future. Former Duke executives created the group last year, and the company has been the group’s sole donor ever since, giving it nearly three-quarters of a million dollars overall and $150,000 this spring, according to a recent IRS report.
The Citizens group promoted select candidates in the 2020 primary elections, spending hundreds of thousands of dollars overall in mailers and TV ads that — thanks to a loophole in state law — can’t be traced to all who benefited.
In the spring, the group launched a series of misleading Facebook ads about energy policy, including two aimed at lawmakers sponsoring a bill that would study wholesale competition for electricity — a clear threat to Duke’s monopoly status.
This year’s bout of advertising was engineered by the Differentiators, the same GOP political consulting firm that advised several key conservative political groups in 2020. Hall said the ads marked “the first time I’m aware of Duke sponsoring such negative ads.”
‘A coordinated effort’
The edgy Facebook campaign wasn’t the only unprecedented move by the company, Hall said.
As the Energy News Network reported last year, Duke’s employee-led PAC gave over $420,000 to candidates for the legislature last year during the primary and general elections. The figure beat the PAC’s record set in 2018, Hall found, and was spread among fewer candidates.
“While the Duke PAC is donating more, it is giving to fewer legislators in larger amounts,” he wrote in his analysis, “another way to show it is willing to use its money to separate friends and enemies.”
Company board members also weighed in in unprecedented ways, according to Hall.
“For the first time,” he wrote, “out-of-state members of Duke Energy’s board of directors have made multiple large contributions as part of a coordinated effort to finance the campaigns of targeted state politicians.”
The three board members — Michael Browning of Ohio, Marie McKee of Florida and Bill Webster of Georgia — donated a total of $31,800 in October 2020 to Senate Republican President Pro Tempore Phil Berger; Senate Democratic leader Dan Blue; Gov. Roy Cooper, a Democrat; and former Duke executive Sen. Paul Newton, a Republican.
All but Cooper backed the 2019 legislation.
Thirty Duke executives in all, including CEO Lynn Good, contributed over $120,000 to these four politicians in the month of October alone, Hall found. The bulk of the contributions occurred in the first two weeks of the month.
“It was a coordinated effort,” he told the Energy News Network. “It’s very clear that at the end of September, the beginning of October, there was some kind of memo that went out.”
Notably absent from the list of recipients is Republican House Speaker Tim Moore of Kings Mountain, who personally backed the 2019 legislation but failed to persuade enough of his caucus to join him.
“It’s telling that Speaker Moore got zero in that month,” Hall said, “while three Senate allies [to Duke] got over $100,000.”
‘No way to do the people’s business’
The apparent slight from Duke executives in 2020 is fueling speculation that House Republican leaders rushed through this year’s bill, H951, to prove loyalty to Duke — perhaps without any real expectation that it would become public policy.
Speaker Moore’s office didn’t reply to a request for comment on this story. But the theory tracks with the reality that the bill in its current form is unlikely to become law.
The chamber narrowly adopted the measure after midnight with more than a dozen members absent, registering enough “no” votes to sustain a likely veto from the governor. The seemingly rushed passage came before the company’s Aug. 5 earnings call.
“The previous effort hung up in the House,” said Rep. Graig Meyer, a Democrat from Orange County. “Strategically … you try and get through the biggest hurdle first. That’s essentially what they did — even though they did it by passing a bill that will never become law.”
The specter of Duke’s election spending for Republicans also loomed large for many lawmakers, said Rep. Pricey Harrison, a Greensboro Democrat. “I feel like the campaign contributions element to the passage of this bill was very much present during the debate on the bill — in our caucus and around the halls,” she said. “That’s no way to do the people’s business.”
The Senate is now demonstrating little urgency compared to the House. The bill faced a rocky first hearing in that chamber, drawing fire from both Democrats and Republicans. (In the latter group was Sen. Newton of Cabarrus County, who suggested the bill included too much solar and not enough nuclear.) A second hearing this week drew a slew of opponents, including large manufacturers, low-income customer advocates, and environmental organizations.
A third hearing hasn’t been scheduled yet, much less a vote. Presiding over the panel, Sen. Norm Sanderson, a Pamlico County Republican, said at the outset of the meeting that the committee, “probably will have to have another meeting, probably sometime next week.”
Meanwhile, Hall’s analysis also shows the company has retained more lobbyists at the General Assembly than ever before — a record 13 who are on track to collectively earn more than $1 million by year’s end. The previous record was set in 2015, in the long wake of Duke’s catastrophic coal ash spill, when the company hired 11 lobbyists.
‘Things don’t look good’
For Meyer, there’s a clear through-line from 2019 to the present: Rumors that Duke would punish those who voted against its legislative priority that year, rumors during the election that it was spending dark money to help the GOP, and this year, rumors that House Republicans wanted to return the favor to the utility.
“It’s all rumors,” he told the Energy News Network. “But you can only hear rumors so many times before they start to become gospel.”
Two Democrats voted for H951. But, Meyer said, “most House Democrats understand quite clearly how this bill benefits Duke and hurts consumers.” He added: “All House Democrats also understand how much money Duke spent to keep us in the minority so they can pass bills like this.”
Dan Crawford, who directs governmental relations for the North Carolina League of Conservation Voters, agreed. Among the many environmental organizations opposed to H951, his group has launched its second ad campaign of the year to try and counter Duke spending and, “send the message: ‘we’re watching,’” Crawford said.
The “robust” TV and digital buy references the company’s Dan River coal ash disaster and claims that H951 will raise rates “on businesses and families like yours.” It also includes images of campaign finance reports, showing contributions from Duke to House Reps. Dean Arp of Union County and Majority Leader John Bell of Wayne County, both chief backers of H951. “The people need to know that,” Crawford said.
Meanwhile, obscured by all the talk of campaign spending and political gamesmanship is the increasing urgency of tackling climate change, said lawmaker Harrison.
“Overarching all of this discussion is the fact that we’re in the middle of a climate crisis,” she said. “That’s kind of lost in all this because of multi-year ratemaking: what Duke has been promising their shareholders for years and couldn’t deliver in the 2019-20 session.”
“We have to go to zero carbon,” she added. But right now, “things don’t look good.”