FERC has denied a complaint filed against PJM by Public Citizen, Inc. in which Public Citizen alleged that PJM had made $456,500 in campaign contributions to political action committees and further alleged that PJM potentially violated the Federal Power Act and PJM Operating Agreement by recovering through Commission-approved filed rates, "improper campaign contributions and lobbying expenses."

PJM argued that its contributions, which were to both the Democratic Governors Association and the Republican Governors Association, are recoverable expenses for educational and informational outreach, not campaign contributions or lobbying expenses.

FERC said that, "In determining whether the expenses related to any lobbying-type activities are recoverable, the Commission evaluates whether the expenditures: (1) represent an educational or informational function of the RTO essential to its core operations, and (2) support policies that the RTO determines to be in the collective best interests of its stakeholders and from which the RTO cannot reap any financial or other benefit. The Commission has stated that expenses for lobbying 'may be recoverable if they are ‘directly related to appearances before regulatory or other governmental bodies in connection with the reporting utility’s existing or proposed operations’ and therefore, are not considered to be unrecoverable civic, political, or related activities costs[.]' Based on the record in this proceeding, we conclude that Public Citizen has failed to demonstrate that the fees paid by PJM to the DGA and RGA are unrecoverable under this standard."

"Although the DGA and RGA may support candidates for office, they also maintain fora for obtaining relevant information about energy-related matters. PJM pays membership fees to these organizations to maintain access to those fora and does not directly contribute to political campaigns. As PJM explains, by paying membership fees, PJM maintains access to these organizations to keep informed on policy initiatives impacting the wholesale markets and to help educate state policy makers on PJM activities, and such expenditures are directly related to advancing PJM’s stakeholder interests; attending DGA and RGA meetings is a cost-effective way of engaging on policy matters where the governors of multiple of PJM’s thirteen states and their staffs are present," FERC said

"We ... find that Public Citizen has failed to show that PJM’s membership payments to the DGA and RGA are significantly different from those we accepted in ISO New England and conclude PJM should not be denied recovery of such expenses," FERC said

FERC said that Public Citizen has failed to put forward evidence showing that these expenditures do not represent an educational or informational function of the RTO essential to its core operations or do not support policies that the RTO determines to be in the collective best interests of its stakeholders

FERC will not require PJM to itemize and disclose all political-related spending

Docket No. EL18-61

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