How Charles Koch Prevents Clean Energy Businesses From Succeeding

Last week, President Obama correctly singled out the Koch brothers – Charles and David – and the Koch-funded network for standing in the way of America’s clean energy future. Charles Koch responded saying he was “flabbergasted” after hearing Obama’s remark. He continued, “We are not trying to prevent new clean energy businesses from succeeding.” This statement is, at best, highly misleading.

Charles Koch states that he believes government should be smaller and it should not subsidize businesses, including any form of energy business. But while he acknowledges that the fossil fuel businesses he owns benefit tremendously from government subsidies, he doesn’t refuse those benefits or do anything to stop those policy choices. Meanwhile, the Kochs use their political influence and funding for efforts to repeal laws designed to support the deployment of more renewable electricity. Specifically, their political network’s agenda includes weakening renewable energy standards, preventing customers from installing solar panels (by charging fees on people that go solar), and protecting the government monopolized electric utilities.

The facts are indisputable.

Note: For more background, read this full briefing on the Koch’s web of influence across American society.

Here are the facts:

• Arizona Public Service Company (APS), the largest electric utility company in Arizona, admitted that it worked with the 60 Plus Association, a Virginia-based nonprofit seniors advocacy group receiving Koch money, to support the utility company’s proposal to add fees on homeowners with solar panels. Here is an advertisement paid for by 60 Plus Association attacking solar energy in Arizona.

• 60 Plus Association is now working with the utility companies in Florida to preserve the status quo and the state’s outdated business model, and prevent customers from purchasing electricity from third party solar companies.

• The Koch founded and funded Americans For Prosperity (AFP) worked to prevent Georgia’s Public Service Commission from requiring Southern Company to buy more solar energy. An Associated Press review found AFP used misleading figures to pressure the regulators. The commissioners ignored AFP and as a result, Southern Company has gone on a “solar spree” bolstering its renewables portfolio the past two years.

• Americans For Prosperity has also worked in Kansas and North Carolina to repeal, weaken, or freeze those states renewable energy standards. In 2013, AFP flew Willie Soon to Kansas where he testified in front of state legislators that global warming isn’t a problem as part of AFP’s attempt to completely repeal the renewable energy standard. James Taylor, from the ExxonMobil and Koch-funded Heartland Institute, attended an AFP event the same year to increase support for repealing the state’s standard, and he also testified against the law. Furthermore, Koch Industries’ lobbyist Jonathan Small worked behind the scenes in the repeal efforts. Small held private talks with Representative Dennis Hedke (R-Wichita) about legislation to eliminate the law. In 2015, the standard was changed to a voluntary one after legislators threatened to impose an excise tax on wind energy. Mike Morgan, a lobbyist for Koch Industries, joined Rep. Hedke and Jeff Glendenning of AFP at the announcement.

• Additionally, Koch-controlled foundations approved grants for Art Hall, director of the University of Kansas’ Center for Applied Economics, to research the state’s renewable energy standard. Lee Fang at The Intercept writes, “The Koch money was part of an ongoing project Hall described as an effort to develop “intellectual products” to be used “as a tool in economic policy debates… Following his grant request, Hall testified before the Kansas legislature in 2014 in favor of repealing the state renewable energy portfolio.”

• In North Carolina, AFP is again working this year to pressure lawmakers to repeal the state’s renewable energy standard. AFP started phone banking and canvassing to encourage voters to call their state officials and urge a vote.

• The American Legislative Exchange Council (ALEC) connects state lawmakers with corporate lobbyists to create model legislation. Koch foundations also fund ALEC. The corporate “bill mill” has approved model legislation to repeal or weaken renewable energy standards, eliminate solar net metering policies, and restrict markets for solar power.

• Koch funding has also flowed to the Beacon Hill Institute and the Utah State University’s Institute of Political Economy/Strata (a private consulting firm run by Randy Simmons, a former “Charles G. Koch Professor of political economy). The two organizations have produced flawed reports (see here and here) in attempts to justify efforts to repeal renewable energy standards. The reports, however, have been thoroughly debunked.

• The Koch funded Institute for Energy Research (IER), founded in 1989 from a predecessor non-profit organization registered by Charles Koch and Robert Bradley, have attacked clean energy laws. In Ohio, for example, IER’s Daniel Simmons testified in favor of repealing the state’s renewable energy standard. The President of IER is Thomas Pyle, who had been a lobbyist for Koch Industries earlier in his career.

Last month, President Obama called out the Koch brothers for standing in the way of the clean energy future.

“But when you start seeing massive lobbying efforts backed by fossil fuel interests, or conservative think tanks, or the Koch brothers pushing for new laws to roll back renewable energy standards or prevent new clean energy businesses from succeeding – that’s a problem. That’s not the American way. That’s not progress. That’s not innovation. That’s rent seeking and trying to protect old ways of doing business and standing in the way of the future.”

Charles Koch responded the next day by working with Mike Allen at Politico. Allen writes,

Charles Koch hit back at criticism of “the Koch brothers” during President Barack Obama’s energy speech in Las Vegas earlier this week, saying he was “flabbergasted” by the attack…

“We are not trying to prevent new clean energy businesses from succeeding,” Koch continued. “Any business that’s economical, that can succeed in the marketplace, any form of energy, we’re all for. As a matter of fact, we’re investing in quite a number of them, ourselves – whether that’s ethanol, renewable fuel oil. … We’re investing a tremendous amount in research to make those more efficient and create higher-value products.”

White House press secretary Josh Earnest hit back and said,

“I’m not sure whether to describe those comments as remarkably rich or utterly predictable… The fact is that Koch Industries has spent at least tens of thousands of dollars, if not hundreds of thousands of dollars, lobbying Congress – these are public disclosures — in support of those kinds of policies, to say nothing of the millions of dollars that they have spent punishing those candidates that didn’t side with them.”

Philip Ellender, Koch Companies Private Sector’s president and COO of government and public affairs, then countered via email to Nick Gass at Politico, saying,

“We think it is hypocritical that Mr. Earnest attempted to tout the merits of a free-market system while promoting a new round of taxpayer-funded loan guarantees for the Administration’s politically friendly special interests. That said, Mr. Earnest’s statement about Koch is inaccurate. We have not lobbied for government subsidies or mandates, and we have lobbied against subsidies that directly benefit Koch.”

Republic Report is an investigative news blog dedicated to uncovering the corrupting influence of money in politics.