This article is Part 2 of a four-part series demonstrating how the money in a lobby sector can impact state politics and legislation. We’ve selected the Green Energy sector due to a resurgence of interest in a behind-the-scenes look at renewables following the 2021 snowstorms, but you can follow the money in any industry of interest that is spending lobbying dollars in Austin.
To see the first article in this series, read “How Big is the Green Energy Lobby?” here.
The Real Political Powerhouse
Between 2006 and 2029, green energy companies doing business in Texas will rake in an estimated $36 billion in federal and state subsidies.
Conversations about money in politics tend to focus on wealthy donors, big corporations, and powerful political action committees. Scant attention is paid to the role of lobbying. But the numbers show that lobbying is actually the financial powerhouse in American politics.
Our site includes a list of lobbyists in Texas, whose interests they’re representing, and how much they’re being paid, but to get a complete picture of the way money influences lawmakers, other means of influence should be considered.
Crony Capitalism
Businesses, industry groups, and government organizations hire lobbyists to influence legislators in Austin, often by wining and dining them or providing tickets to exclusive events.
Those same organizations sometimes donate to those same lawmakers through their PACs. Executives in those corporations may make individual donations to a politician’s campaign account.
In return, those organizations may get favorable laws, beneficial regulatory positions, government payouts, tax breaks, etc. Known as crony capitalism, it is a distortion of the free market. Practiced by Republicans and Democrats alike, it ultimately creates an uneven playing field benefiting those who are willing to to pay for access and favor from those in power.
A Lobbying Case Study — The Green Energy Industry
While many individuals and organizations play this game, we are currently doing a case study of the lobbying efforts and other monies spent by the green energy industry in Texas. Since the record breaking winter storm which left millions of Texans without power and more than 200 dead, questions and accusations have been swirling about how so much of Texas’ energy grid — at least 25 percent — came to rely on green energy. Last week we provided a list of green energy-related entities in Texas and the money they have spent to lobby Austin lawmakers.
Since 2015, as much as $71.7 million has been spent on lobbying by companies whose primary source of income is renewable energy, including solar, wind and nuclear. That number likely climbs much higher if other companies with a strong interest in green energy are included — companies like Shell Oil and AT&T, who have invested billions in green energy and have a strong lobbying presence in Austin. So what are lobbyist clients getting for all that money spent? Quite a bit, actually.
Subsidies are the Big Payout
According to records compiled by the Texas Comptroller’s office and a 2019 study by the Texas Public Policy Foundation, the total cost to taxpayers and consumers for the myriad of subsidies going to green energy operators in Texas from 2006 to 2029 will be $36 billion.
Texas Subsidies:
The largest portion, almost $18 billion, comes from state and local incentives.
According to the TPPF study, “Texas subsidies expected to be paid out through 2029 combine to exceed the [federal] costs, reaching almost $18 billion. Texas state and local subsidies include the Competitive Renewable Energy Energy Zone (CREZ) transmission lines ($14 billion), 313 property tax abatements ($2.5 billion), grid interconnection costs ($1 billion), and the Renewable Energy Credits (REC) program ($570 million). In addition to these direct subsidies, the Texas Public Utility Commission (PUC) recently used an administrative pricing mechanism to add as much as $2.5 billion a year to the cost of electricity in an attempt to fix the problems with grid reliability caused by renewable energy.”
Federal Subsidies:
In addition to these myriad incentives provided by Texas, the largest single subsidy comes from the federal Production Tax Credit (PTC), which will account for an additional $16 billion in subsidies to Texas green energy operators through 2029.
Here are some of the green energy lobbying groups we featured last week along with the amount of subsidies they have and will receive through 2029 from the federal PTC alone.
| Lobbyist Client | PTC Subsidy |
| Next Era Energy | $5.7 billion |
| EDP Renewables | $1.6 billion |
| Invenergy | $1.3 billion |
| NRG Energy | $1.1 billion |
| E.ON | $1.1 billion |
| Duke Energy | $938 million |
| BP | $913 million |
| EDF Renewables | $622 million |
| Exelon | $528 million |
| Pattern | $500 million |
A Staggering Return on Investment
Transparency USA has catalogued up to $71.7 million invested in lobbying by Texas green energy companies since 2015. (That number only includes lobbying of state-level lawmakers, not any lobbying efforts in D.C.) In return, green energy companies have received and will continue to receive subsidies from the Texas government of almost $18 billion — that’s recouping the money they will have spent between 2006 and 2029 about 76 times over.
The available lobbying numbers only cover about seven out of those 23 years. To get a more accurate comparison, we extrapolated those same lobbying numbers over the entire 2006-2029 period where the $18 billion in state and local subsidies would be received. The green energy lobby continues to grow in each available cycle, but there are not enough data points to assume an accurate growth rate. Instead, we’re applying the same rate of investment in lobbying from the known seven-year stretch. Using those numbers as a guide, we estimate a $235 million investment by renewables companies operating in Texas.
At around 76 times the sector’s reportable investment in lobbying Austin lawmakers, it’s an incredible return on investment. And even if our estimate of the lobbying money that will be spent in Texas over the entire period turns out to be on the low end, it’s certainly not going to be off by billions. It’s absolutely going to be money well spent for companies in the green energy sector.
Bottom line: it can pay off — big time — to be in the lobbying game. What private market can compete with that return on investment?
Stay tuned as we continue our case study of the green energy industry in Texas. Next we turn our attention to political action committees affiliated with these companies as well as donations being made by green energy corporate executives.