Michigan residents overwhelmingly passed a ballot measure last week intended to restrict the ability of utilities and state contractors to influence politics. Now, the utilities are fighting back.
In a lawsuit filed last Thursday, the two major utilities in Michigan, Consumers Energy and DTE, argue that the measure—dubbed Proposal 2—threatens their First and 14th Amendment rights.
The ballot measure, which passed with 81 percent of the vote, amends the state’s campaign finance laws to put restrictions on donations for both utilities and companies with more than $250,000 annually in state and local government contracts. The new language explicitly bans political donations from utilities, contractors, and high-level employees, lobbyists, and their immediate family members. The ballot measure also tightens the state’s regulations around disclosures for political ads, mailers, and other forms of communication.
Michigan was part of the blue tsunami election where energy prices and government corruption—and data centers—played a huge role in getting Democrats elected and getting ballot measures like this passed. The state is a major hub for data center development, with at least 26 projects planned across the state as of July.
The utilities have supported that development: the industry has lobbied in the past for tax breaks for data centers, and DTE has proposed building two new massive gas plants to handle potential data center load, at a cost of $6.4 billion, with consumers potentially on the hook. Michiganders have seen energy bills increase by 10 percent over the past 12 months, the fourth-largest increase in the US, according to Energy Bill Lab.
“Michigan really is ground zero right now for a utility accountability wave that is quite national,” says David Pomerantz, the director of the Energy & Policy Institute, a nonprofit utility watchdog.
The ballot initiative, the utilities say in the lawsuit, was drawn up as “a means of excluding Plaintiffs from critical aspects of the political debate.”
Consumers spokesperson Katie Carey writes in an email that the proposal “unfairly targets a Michigan business, its Michigan employees, and their family members from exercising their constitutionally protected rights to participate in the political process, while allowing out-of-state special interest groups and billionaires to continue flooding Michigan with political spending. Michiganders should not lose their First Amendment rights because of where they work.”
DTE did not respond to WIRED’s request for comment.
Utilities are regulated by state-level bodies, either elected or appointed by the governor, which Pomerantz says means that there’s much more incentive to participate in pay-to-play schemes. Corruption scandals involving utilities have rocked neighboring states like Ohio and Illinois. In the lawsuit, DTE and Consumers Energy say there is “no scandal, no exchange of official acts for money, no examples whatsoever.”
