A Pennsylvania proposal that could tie Philly’s hands
In four states, including Pennsylvania, the legislation is in the early stages, Welch said. State Sen. Gene Yaw, a Republican from Williamsport who chairs the Environmental Resources and Energy Committee, introduced Pennsylvania’s version of the bill earlier this year. Although no municipalities in Pennsylvania are considering bans on new gas hookups, the broad language of Senate Bill 275 has climate activists and local municipalities worried. It forbids towns and cities from restricting “the connection or reconnection of a utility service based upon the type of source of energy to be delivered to an individual customer within the municipality.”
The Energy Association of Pennsylvania, to which PGW pays a yearly membership fee, has lobbied in support of the Senate bill, and its president and CEO, Terrance Fitzpatrick, testified at the May 11 hearing on the legislation.
“We also recognize that there are different views within the U.S. and Pennsylvania on issues concerning the environment and, particularly, how to address climate change,” said Fitzpatrick. “Some believe that all fossil fuels should be ‘kept in the ground’ and that we should immediately stop building infrastructure to transport these forms of energy. In view of these trends, we believe it may be just a matter of time before some municipalities move toward restricting sources of energy.”
Testifying on behalf of the Pennsylvania State Association of Township Supervisors, director of government relations Joseph Gerdes questioned the origins of the legislation, calling the language generic and not crafted specifically for Pennsylvania.
“As such, we are concerned that these terms could be broadly interpreted and could be seen as preempting local land use controls, which we would oppose,” said Gerdes.
The union that represents 1,150 of PGW’s workers testified in favor of the bill, saying electrification efforts would jeopardize those jobs and put an undue burden on low-income ratepayers.
“We are convinced that Senate Bill 275 will serve the dual purpose of helping to ensure the continuity of 1,600 good-paying PGW jobs, jobs with quality health care and retirement benefits that will likely be lost otherwise, while guaranteeing that significant economic costs will not be thrust upon Philadelphia’s poorest citizens,” said Keith Holmes, president of Gas Works Employees Local 868. “There can be no dispute that if the city were to somehow eliminate natural gas as a source of energy, all of these good jobs would be lost and could not be replaced with a viable alternative.”
PGW did not answer questions posed by WHYY News about its yearly fees to industry groups, but its FY 2022 operating budget seeks $127,000 for the Energy Association of Pennsylvania. It also pays yearly dues to the American Gas Association, listed as $445,000 for FY ’22, and is an active member in the American Public Gas Association, for which it has budgeted $58,000 in FY ’22 dues.
Though PGW says it has taken no position on Senate Bill 275, the Energy Association of Pennsylvania has advocated for the bill, and the American Gas Association and the American Public Gas Association have helped utilities lobby for similar bills nationwide.
In April, Philadelphia City Council passed a resolution opposing SB 275. That resolution was introduced by Councilmember Green, chair of the Philadelphia Gas Commission, one of the three entities that oversee PGW.
“I always have concerns when at the local level we don’t have the flexibility to do all the various types of initiatives that could be beneficial for the citizens of the city of Philadelphia,” said Green.
Like Julie Greenberg, Green is very interested in exploring geothermal microgrids, but he said SB 275 could prevent PGW from pursuing that option.
“Senate Bill 275 would restrict us to just using gas,” Green said. “And that’s something that is not beneficial for the diversification of PGW going forward.” He said he sees a future for PGW, which was originally a lighting company then transitioned to heating homes.
“I see PGW going through another transformation like it did from a lighting to heating company and being more of an energy company,” Green said. “And I think there’s going to be some very good opportunities in [Biden’s infrastructure proposal] for the ability of Philadelphia Gas Works to look at various pilot opportunities. Having a Senate bill that dictates to municipalities like Philadelphia that we can have only one type of energy source … is a disservice for us here in the city of Philadelphia.”
Is PGW undermining the city’s climate efforts?
Just two weeks after passage of that City Council resolution, the Energy Association of Pennsylvania testified in favor of Senate Bill 275 at a hearing and submitted written testimony stating it was speaking on behalf of its member utilities, including PGW. A PGW spokesman said including the agency as supportive of the bill was an “oversight.”
Between early January and early February of this year, more than a dozen emails with multiple attachments about SB 275 were exchanged between upper management at PGW, including vice president of regulatory and legislative affairs Gregory Stunder, and Sen. Yaw’s chief of staff and executive director of the Environmental Resources and Energy Committee Nick Troutman; PGW contract lobbyist in Harrisburg Gmerek Government Relations; PGW outside counsel Daniel Clearfield; and staff from the Energy Association of Pennsylvania, the American Gas Association, and other unnamed utilities. The content of those emails is not revealed because PGW is fighting to keep them from public view.
One email exchange, with the subject “discussing legislative strategy,” included Daniel Lapato, senior director of state affairs with the American Gas Association. The Texas Observer, a nonprofit news organization, along with the climate reporting site Floodlight, recently reported on how Lapato asked for support from a publicly owned gas utility in Tennessee for a similar bill that state lawmakers there approved.
The content of the PGW emails discussing SB 275 is part of ongoing litigation in a Right to Know case brought by Charlie Spatz of the Climate Investigations Center. Spatz has sued to get PGW to release the emails. “It’s critical for Philadelphians to know whether their city-owned utility is at odds with the city’s own climate policies,” he said.
The privilege log that details the records being withheld was obtained by WHYY News. The log includes references to meetings held by the Energy Association of Pennsylvania about Senate Bill 275, legislative strategy, and draft language.
PGW submitted a 26-page brief to Pennsylvania’s Office of Open Records in defense of its right to withhold those emails from public view. As part of that defense, PGW’s Stunder claims, among other things, attorney-client privilege and in an exhibit to the brief describes email exchanges with his outside counsel, Daniel Clearfield, in this way:
“My communications with Mr. Clearfield reflect strategy used to develop or achieve successful adoption of Senate Bill 275 in that they analyze particular language in the bill and similar laws.”
PGW spokesman Richard Barnes told WHYY News that “Gregory Stunder and Mr. Clearfield only discussed the strategy being used by others related to the bill and its potential for passage. PGW has not taken a position on the bill.”
Barnes said that the utility did not hire lobbyists to advocate for SB 275, and that its staff members provided “technical feedback.”
“With respect to Senate Bill 275 in particular, PGW’s staff provided technical feedback in response to various stakeholders who invited review and comment, however we did not employ any lobbyists related to the bill,” Barnes wrote in an email to WHYY News. “We are concerned about the costly impact limiting energy choices would have on our customers’ wallets and the huge economic burden it would place on the finances of the city of Philadelphia. PGW serves an already cost burdened population.”
Barnes said the utility has a “robust sustainability portfolio,” citing goals for reducing methane emissions.
In the brief challenging the Right to Know request, PGW points out that despite its being a public agency, Pennsylvania’s Natural Gas Choice and Compliance Act requires it to be treated as a competitive business, and as such, it is exempt from some aspects of the Right to Know law.
PGW did not answer a list of detailed questions submitted by WHYY News, including its position on whether a city should be able to implement electrification rules, and whether its own staff members lobbied on behalf of the bill. Nor did it answer questions on whether it took steps to promote or communicate support for the bill, or whether it encouraged other groups to do so.
In its filings as part of the Right to Know case, PGW suggests that it fears being sidelined if it is forced to reveal the communications from the trade groups and other utilities, which are not subject to the Right to Know law, and that it wants to protect itself from competition.
“Mr. Spatz is asking the Office of Open Records to expose the written communication records of PGW’s legislative lead tasked with and responsible for developing PGW’s legislative strategy with respect to remaining competitive in the energy market on that very topic. Such exposure, and violation of Section 2212(t), would shut down PGW’s ability to freely strategize and engage in the frank exchange of opinions and ideas regarding energy policy. (Stunder Attestation, ¶¶ 23- 24; Fitzpatrick Affidavit).”
The brief challenging the Right to Know request continues: “This will have devastating results for the public, particularly the residents of the City of Philadelphia who rely on PGW as an affordable and reliable source of energy. Industry partners and others who share a competitive strategy but do not wish to develop energy policy from a fishbowl will ultimately leave PGW out of the conversation, resulting in energy policy and legislation that does not take into account the needs and interests of the gas ratepayers of the City of Philadelphia.”
With regard to “technical feedback,” the state’s lobby disclosure law is unclear, according to attorney Adam Bonin, who advises political candidates on compliance with the statute.
“With ‘technical assistance,’ it’s not explicitly in the law,” said Bonin. “But it’s along the lines of when a legislative or government official is asking you for advice, then you’re not really lobbying them, you’re not making an effort to persuade. That is plausible. That they haven’t hired lobbyists on this doesn’t mean they don’t lobby.”
Both the Energy Association of Pennsylvania and Sen. Yaw have intervened in the public records case on the side of PGW and keeping the emails from public view.
A spokesperson for the Kenney administration said PGW has been given explicit instructions not to lobby for SB 275.
Office of Sustainability Director Christine Knapp said the city has a long history of opposing preemption bills, including the most recent actions by state lawmakers to prohibit plastic-bag bans. She said passage of SB 275 could limit the city’s efforts to reach its climate goals.
“While it is appropriate for PGW to work with affinity groups and answer questions on the impact of any such legislation on PGW, it would be inappropriate for PGW to lobby for passage of a bill that preempts the City’s authority,” Knapp said in an email. “Direction to not conduct such lobbying has been made to PGW management.”