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Newsletter | Revolving Door Project Newsletter | June 12, 2024

Utilities Doubling Down On Fossil Fuels? That’s A Junk Fee!

Anti-MonopolyClimate and EnvironmentEthics in GovernmentExecutive Branch

Plus, how the newest reporting on Joshua Wright’s downfall sheds light on Big Tech’s scheme to avoid antitrust scrutiny.

This newsletter was originally published on our Substack. Read and subscribe here.

In late May, Brian Deese, the former director of President Biden’s National Economic Council and current MIT fellow, wrote about “The Next Front in the War Against Climate Change” for The Atlantic. Deese explained that while the Inflation Reduction Act’s incentives have stimulated clean energy demand “beyond my wildest hopes,” he still finds himself “lying awake at night, worried that America could still fail to meet its climate goals.” 

The bogeyman keeping Deese from a sound night of sleep is one that he acknowledges, quoting Volt’s David Roberts, to have a “force field of tedium” surrounding it: utility reform. But Deese is absolutely right that reforming the broken incentives structure of our electricity market is key to deploying clean energy at the scale and speed we need. 

Deese offered some potent framing for the fight to reform utilities, adopting the Biden administration’s popular focus on combating the everyday scourge of junk fees: “If a utility is trying to bill consumers for the cost of an expensive new natural-gas plant instead of cheaper and cleaner alternatives, that isn’t a fair price—it’s a junk fee that consumers are paying for no good reason.” This is strong messaging that the White House should embrace. Too many utilities and their fossil fuel suppliers, from the Pacific Northwest to the Southeast, are doing just this: seeking to saddle ratepayers with the exorbitant cost of long-term fossil fuel use.

Decarbonizing our electricity supply will reduce people’s direct exposure to oil and gas price volatility, and all the indirect costs and consequences of increased greenhouse gas pollution. This is an economic equity and health issue too: two-thirds of low-income Americans experience high energy burdens, and at the same time are disproportionately exposed to the health hazards of fossil fuel infrastructure and air pollution. Frankly, any analysis that deems a new fossil fuel-fired power plant cheaper than renewable energy is just incomplete math, failing to calculate the massive “negative externalities” or hidden costs that come from enabling more pollution. People still pay those costs, whether via their utility bill or their hospital bill.

The Biden administration should embrace the opportunity to be a messenger about the unseen costs we pay to maintain our fossil-fueled economy. Its own “social cost of carbon” metric, though imperfect, can be a helpful tool in communicating about that. But there are plenty of other metrics to rely on, too. While oil and gas companies are price-gouging individuals at the pump, they’re also price-gouging the world, with the costs of enduring climate change already six times higher than the cost of implementing measures to prevent it. A landmark recent study in Nature projects that climate change will cost the world $38 trillion in economic damages in 2049, under a middle-of-the-road scenario; if we fail to phase out fossil fuels, that cost could double

These numbers aren’t a reason to throw in the towel. They’re a reason to get deadly serious about decarbonization, and to reject the ceaseless propagandizing of the homicidal fossil fuel industry. One place where the Biden administration should step up on decarbonization is with its own federally owned utility, the Tennessee Valley Authority. 

Under the direction of its fossil-fueled and overcompensated CEO Jeff Lyash, the Tennessee Valley Authority has continued to move forward with replacing its coal-fired power plants with gas-fired power plants instead of clean energy. The most recent example is TVA’s move to replace the Kingston Fossil Plant with a methane gas plant and new 122-mile pipeline across eight counties. 

The Environmental Protection Agency sharply critiqued TVA’s proposal, calling its environmental review “inadequate” owing to “serious deficiencies.” The EPA even cited several ways in which the utility’s math was simply wrong, including failing to factor in the Inflation Reduction Act’s “significant” clean energy incentives and ignoring the social cost of greenhouse gasses and air pollution altogether. The EPA cited independent cost analyses which showed that the renewable energy alternative would have saved TVA ratepayers $1.3 billion dollars relative to the gas plant with carbon capture equipment, and $1 billion dollars relative to the gas plant without carbon capture equipment.

EPA explicitly called out the utility for dismissing the “lower costs, lower financial risks (compared to future natural gas price volatility), and far superior environmental performance” of the solar and battery plant option. Ignoring EPA’s censure, TVA is boldly moving ahead with its gas expansion plans, and the EPA seems to have backed off from taking further action. 

The White House should embrace Deese’s call to action and put pressure on TVA to change course. TVA is the nation’s largest public utility, but instead of being the leading adopter of federal incentives for utility decarbonization that it should be, it is actively undercutting both federal environmental laws and the energy transition. 

The Downfall of “Big Tech’s Proudest Ally” 

Bombshell reporting from Wall Street Journal is rocking the antitrust world this week. In August 2023, former FTC commissioner Joshua Wright abruptly left his long-standing post leading the right-wing antitrust pipeline at George Mason University. The news quickly spread that his sudden departure was due to sexual harassment and misconduct allegations from former law students and a GMU job candidate

Now, in a three-part8000 (!)-word series for the Journal, Brody Mullins has revealed the extent to which Wright’s corporate clients (including Google, Facebook, Amazon, Qualcomm and Walmart) enabled Wright’s predatory behavior; several former law students of Wright “allege he used his position as a professor, and later as a boss, to pressure them for sex.”

Even after Wright was forced out of BigLaw firm Wilson Sonsini for not disclosing his relationship with an employee who was once his student at GMU (and who later called him “a f—ing predator,”), he was able to maintain lucrative contracting gigs with his corporate clients. Those clients denied knowledge of allegations of Wright’s inappropriate actions prior to last year’s reporting. As Wright’s former Wilson Sonsini colleague Kellie Kemp noted, “His inappropriate relationships with students were apparently an open secret at GMU for years, but his misconduct also affected junior antitrust lawyers and scholars […] Yet leaders of law firms, academic institutions, and other organizations continued to employ him, sponsor him, or refer work to him well after they should have known better.”

When Wright’s wife filed for divorce in 2021, he listed his income at $170,000 a month, thanks in part to Google, Amazon, Facebook, Qualcomm and Walmart. Indeed, had several brave women not gone public after Wright stepped down from GMU, it’s easy to imagine Wright would still be cashing in Big Tech checks today, with his corporate benefactors happy to keep their heads in the sand.  

As uncovered by Mullins, Wright understood his role as a valid defender of monopolists hinged on the public not knowing that he was being paid to defend them – “Wright told romantic partners that public disclosure of corporate donations, together with his consulting work for the same companies, might undermine the credibility of the academic research and advocacy he did on their behalf.” 

When the school’s gift-acceptance committee sought to review Wright’s corporate donations from Google, Amazon, Meta and Qualcomm for possible “illegally lobbying overseas officials […] They learned the institute allowed companies to keep contribution figures secret.” One member of the committee said they believed GMU administrators violated a school policy to make sure the donations didn’t create “a conflict of interest for the university or influencing academic work.” Seemingly, Wright was protected from the school’s own designated ethics figures charged with bringing to light conflicts of interest contrary to the ethical goals of academia. 

(As a side note, we wouldn’t be surprised if a contributing factor to this reporting coming out months after the initial scandal is GMU’s willful reluctance to release relevant documents via FOIA requests despite its obligations as a public university. The Revolving Door Project submitted several requests relevant to the Wright scandal in 2023 that have not yet been released.) 

These facts point to an attempted coverup to keep “Big Tech’s Proudest Ally” protected from a downfall that in retrospect seems inevitable. But there are clear lessons for any of the parties involved who want to prove that such an oversight won’t happen again. For one, George Mason University and its overseers in the Virginia General Assembly should investigate the newest revelations, carefully considering how Wright’s evasion of conflict of interest rules happened without a hitch, and release their findings (and solutions) publicly to restore the public university’s image. 

In a larger sense, the scandal leads us to wonder how many other ‘independent’ experts are in fact being paid for their public opinions by corporations, and whether their corporate benefactors are willing to look the other way on misconduct. As the antitrust enforcers have stepped up in their roles to rein in price-fixing across the economy and restore economic power to workers and consumers, the media must be clear about whether the other-side-of-the-argument experts they quote in opposition to public servants are being funded by corporations.

Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week: 

The Worst Possible Trump Attorney General Is the One He’d Be Likeliest to Pick

Jim DeMint Wants to Destroy Democracy

Neoliberal Champions Under the Microscope: Hackwatch’s Latest Exposés

This California congressman is all over TV and TikTok, touting Biden … and himself

Database Reveals ‘Staggering’ $6.6 Million in Gifts to Supreme Court Justices

Anti-MonopolyClimate and EnvironmentEthics in GovernmentExecutive Branch

More articles by Hannah Story Brown More articles by Andrea Beaty

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