A recent appointment to a Michigan utility consumer protection board is raising conflict of interest questions because of a donation DTE Energy’s foundation made to a church where the appointee works as a pastor.
Michigan Gov. Gretchen Whitmer in February appointed Third New Hope Baptist Church Pastor QuanTez Pressley to the Utility Consumer Participation Board, which funds nonprofits that do regulatory battle with investor-owned utilities over issues including residential rate increases and renewable energy.
A $12,000 grant last year from DTE Energy’s charitable arm to the pastor’s Highland Park church, however, leaves the appearance of a conflict of interest in the likely event that Pressley is asked to vote on funding for the utility’s rate case opponents, according to utility watchdogs and ethics experts.
“It looks a lot like a clear conflict of interest,” said John Pelissero, an applied ethics expert at Santa Clara University. “You can’t be receiving a benefit from a company when you’re supposed to also be responsible for enabling others to regulate or oversee what that company is doing.”
The Whitmer administration didn’t respond to a request for comment. Pressley’s secretary said that DTE Energy had called to let him know that he wasn’t appointed to the board because of the donation. She later canceled a scheduled interview with Pressley and didn’t respond to follow-up calls.
DTE Energy directed questions to the DTE Foundation, which in a statement to the Energy News Network wrote that it “does not have a connection to the Utility Consumer Participation Board and did not play a role in Pastor Pressley’s appointment or any events that preceded it.” (The foundation’s statement did not address any potential influence by DTE Energy, as opposed to its charity.)
“The DTE Energy Foundation awarded more than $21 million in COVID-19 relief funding to drive healing, recovery and progress across Michigan and beyond in 2020,” the statement reads. “Third New Hope Baptist Church received a $12,000 grant — awarded solely to support its relief efforts — which funded essential services, including food assistance, for our fellow Detroiters.”
The state statute that established the board prohibits appointees who have had a financial interest exceeding $1,500 in a utility within a year or who have received payments for goods, services, or employment from a utility. The 1982 law was written at a time when utilities’ foundations didn’t exist or weren’t nearly as active, so it doesn’t include anything about charitable donations.
The law reads that the five-member board “shall be an advocate for the interests of residential utility consumers,” and members are appointed by the governor. It’s funded through a small charge to customers’ utility bills. Records show that the board awarded over $650,000 in grants in 2019, the last year for which its annual report is available.
Among recipients in recent years are groups that have often vocally opposed DTE’s agenda in rate cases and in public, including Soulardarity, Michigan Environmental Council, and Citizens Utility Board of Michigan. Grants are made throughout the year and help pay the nonprofits’ costs for intervening in the cases. Municipalities can also receive funding but haven’t yet.
Concerns about conflicts of interest are heightened in part because of recent examples of utility foundations appearing to use charitable contributions to influence policy. DTE Energy’s foundation spreads millions annually to organizations across the state, and other church and nonprofit leaders who have received money have later spoken out against renewable energy and in support of the company’s agenda at regulatory meetings. DTE Foundation funding recipients have also written op-eds in support of the company.
The tactic is common among utilities across the nation, said Matt Kasper, research director at the Energy and Policy Institute, an industry watchdog that issued a 2019 report highlighting examples.
“While the foundations contribute to a variety of nonprofits for wonderful things that benefit communities, we found a lot of examples of recipients weighing in on regulatory matters that benefit the utility,” he said. Kasper added that he hadn’t encountered a case like the Utility Consumer Participation Board, but most states fund consumer protection groups through the public utilities commission or another mechanism.
Even if there wasn’t any intent to do anything wrong and Pressely genuinely isn’t there to do DTE’s bidding, the appointment remains a problem because it has the appearance of a conflict of interest, Pelissero said. Potential solutions, he added, are for the money to be returned or Pressley to step down.
“It sort of doesn’t matter what the intent was because it has the appearance that they have placed themselves in a clear conflict of interest,” Pelissero said.
At Pressley’s first meeting on April 12, he voted in favor of several grants for nonprofits.
In a statement, Michigan Environmental Council’s program director for clean energy, Charlotte Jameson, noted that the nonprofit “has had a long and successful partnership with the UCPB that’s led to real savings and benefits for residential ratepayers.”
“We are just getting to know its new board members,” she said, “but we look forward to working with them to safeguard residents of Michigan and help rein in residential utility bills.”