On October 17, Michigan Policy Network spoke to Nancy Moody, who oversees the lobbying efforts of DTE Energy, one of the state's largest utilities. Nancy spoke with us in her office about the legislative process behind the landmark 2008 energy package; how her history as a teacher helps her in her current job; and the problem with term limits, among other things.
MPN: What sort of day-to-day duties does your job entail?
Nancy Moody: I am the Chief Advocate for DTE Energy in state government affairs, which means I work with the legislature, the governor's office, and I work with all of the state departments. That's my primary responsibility.
MPN: What is the nature of your interactions with these officials?
NM: There are laws, there are regulations, and there are sometimes just plain policies, and we work on all three fronts. It depends on what the issue is, who we're working with and how we're doing that work. But we do most of our work in face-to-face meetings. Sometimes they're group meetings, because we work in coalitions quite a bit, and sometimes they're just one on one like you and I are sitting here right now.
MPN: The most notable recent law regarding utilities was the 2008 Clean, Renewable and Efficient Energy Act that, among other things, created renewable portfolio standards for utilties. What was the lobbying process like for DTE leading up to that bill?
NM: Intense (laughs). So that bill was part of a package, and the package also had a second bill that dealt with all of the regulations that govern utilities in this state. So what was happening is that you had diverse interest groups from every circuit you can think of—you had labor, you had business, you had the utilities, you had the environmentalists. Even within the business community you had the manufacturing communities, you had the advocates for trying to bring green manufacturing to Michigan—in fact, Governor Granholm was the strongest advocate of that group—and everybody was trying to negotiate a package that would give each of the groups something. The big something on the utility end of that was improved regulation. And the big piece that the governor got was the green energy policy that included the RPS, primarily, and the energy optimization component secondarily. So we were in the midst of all of that, it was a very, very intense effort for two years. Very intense. We probably never worked less than sixty hours in any week for two years. It was crazy.
MPN: Under the new administration, what have you been involved in so far?
NM: Well, we have a group of primarily national chains—Home Depot, McDonald's, those kinds of outfits—that are trying to undo some of the 2008 act. And we're busy defending the 2008 act and the way it's been implemented, so that's been important. We've got some legislators who don't understand Michigan's RPS standards, who don't understand the way energy optimization is working, so we're doing a lot of just straight-up educating. There's a new governor with a brand new administration, which means all of the cabinet directors changed. Over two-thirds of the House of Representatives were term-limited out, and the senate brought back eight members. So out of thirty-eight, thirty of them were term limited. Which means you've just got new, new, new, new, new, across, the board. Therefore, this year is an education year for us. Major threats to the 2008 package we take very seriously. When you have an outside group like Constellation Energy from Baltimore, Maryland, who is bankrolling lobbyists, calculations firms, lawyers, we take it very seriously. It's a concerted effort to undo some of the 2008 legislation. Not the RPS or the EO—they're not concerned with that—but the regulatory pieces.
MPN: How is lobbying for a utility different from other forms of lobbying?
NM: I always say there are three kinds of lobbying. There's single-issue, like gun rights if you're the NRA. And it's overstating to say it's single-issue, but it really comes down to [how you feel about] guns. There are several of those. Then you have your multi-client lobbyists, and multi-client lobbyists represent anyone who pays them. They really have fascinating work because they're just all over the map. And then you have single organization lobbyists, which is what I am. I'm a corporate lobbyist for DTE Energy. Now under that umbrella we have a lot of businesses, but they're all energy related. When I come into a room, everybody knows I'm there to represent the interests of DTE and its customers. When a multi-client lobbyist comes into the room, you need to find out “Who are you here for today?” I'm not disparaging them, they serve a really terrific role in the process. But it's just different, they don't just wear one hat. SO we have one organization with many interests, a single issue lobbyist will literally have a single issue, and a multi-client is all of the above.
MPN: DTE consists of two major utilities in Michigan, Detroit Edison for electricity and MichCon for gas. The regions in which these utilities operate are very, very different...
NM: Yes. Both utilities, long ago, were given their unique service territories. The Detroit Edison territory is compact, and that has to do with the fact that to deliver electricity, you have to have lots of wires. So it makes sense that everything is contiguous with each other. For natural gas, it's all delivered through pipelines. And we have pipelines throughout the state of Michigan, as does Consumer's Energy, and to a lesser degree smaller companies with little pieces [of service territory]. Because of that you can see that we get pocketed pieces of service territory, but it's all regulated by the public service commission.
Source: DTE Energy
MPN: Does this complicate your job? Do you ever find that the interests of customers in one region are at odds with those in another?
NM: That's a very good question...I don't think they're at odds with each other. But we have in Detroit the poorest region of the entire state of Michigan, and we work very hard on low income issues. That makes us a little different than the other out-state utilities that don't have as much need to work on those kinds of issues. I don't think that puts us at odds with the other parts of our service territory, in fact in the U.P. you've got some really low income pockets as well. Northern Michigan does, too. It does make us slightly different than the other utilities, because we work on those issues a lot more.
MPN: In addition to having direct lobbyists like you, DTE is a member of the Michigan Electric and Gas Association (MEGA) What is the benefit of this? Are there ever conflicts between your company's interests and MEGA's?
NM: Occasionally, but they're really small and we usually work them out. There isn't much. We participate with MEGA more as the “big brother” than we do with anything else. We provide resources for them. It's also good to continue to share industry concerns and how we're working things out. What's going on with your customer base over here, what do you think of this healthcare act over there, how's it affecting your employees. We have a lot of commonalities, but we're so much bigger. Most of the MEGA utilities are very small.
MPN: You were a French and German teacher before working in government. How did you go from teaching to lobbying?
NM: Advocacy work and teaching are almost identical. Your classroom's a little different. But what you're doing, in essence, as a lobbyist is sharing information. And of course your hope is that in sharing that information, the person you're speaking with will share your attitude about that information. I don't think it was a far stretch at all.
But my path is through the Michigan legislature. When I came to Lansing, way, way back, my husband was working in the building next to us here at the court of appeals. He's the one that brought us to Lansing. At that point in time I wasn't teaching, I had been laid off. It was in the early 1980s and there were no teaching jobs anywhere. And so I just took my resume to the state capitol and walked it around and landed a job. Six years later, Detroit Edison came recruiting me. And at that point in time I was working as the chief of staff for the Democratic floor leader in the senate. Where you really learned process. I mean, we'd get very, very proficient in process. So they were intrigued with my work there, not so much my teaching. But little did they know the teaching was a much greater experience for what I was about to do.
MPN: You've been doing this for a long time. How has the process changed over the course of your career?
NM: The institution has changed because of term limits. You've really gone from having quite expert [legislators], especially chairs of your principal committees, to having continual turnover and newcomers who have to learn everything from scratch and a lot of times who want to reinvent the wheel, and that's very frustrating on my end. But that's the way it is. That's the nature of the beast, and that was an evolution that I don't believe was a good one.
MPN: What else do you feel has changed greatly in government since you first began working in Lansing?
NM: Well, you know, it's a national phenomenon, but I think that if I went back almost thirty years ago to the place when I started working in the legislature to where I am today, there was much more camraderie. But again, I think term limits had a lot to do with that in Michigan. Because people stayed in town and they developed relationships over many years, they became friends across the aisles, both Democrats and Republicans. But again, there is also a national trend of polarization and that trend has continued here. So I think there's just much much less working together and bipartisanship all the way around.
The 2008 energy package was a really interesting one because it started with and ended with bipartisan cooperation. And I think that's why it worked. If you look at 2008, it's the only major package that was adopted in that session. The only one.
MPN: What are you most proud of accomplishing in your career as a lobbyist?
NM: I think that the standout legislation, if I look at what was important to DTE energy, was the first package (in 2000). And ironically, the one that almost ended up destroying our company. But sometimes, you get unintended consequences. And the 2008 package was in essence was a revision of the reforms of 2000. So I'm probably, from a policy perspective, most proud of the 2000 law, which was a disaster later on, and the 2008 package which we think made the corrections and took us to really the bold new world of cleaner energy. And we're proud of that, very proud of that.
MPN: How was the 2000 law a problem for your company?
Well in 2000, the whole country was moving towards deregulation. We, as a utility company, did not want to be deregulated, but we also saw that deregulation was sweeping the country and [former Governor] John Engler was insistent that he was going to get what he wanted, and he got everything he wanted. And we were very well aware of that. So we negotiated to a place where we thought, okay. We didn't have to sell off all of our power plants, it's called divestiture. And we were able to get a financing piece that allowed us to recover the cost of the plant that was not in the market. That was our nuclear power plant, it was overpriced for the market. So we thought we'd structured a deal that would work for our customers and for our shareholders. But in the end, it didn't. It was very, very disatrous. So we started, I mean as early as 2004, trying really hard to make reforms. And it took us four years to get us to a place where we were able to.
But you asked me what I was most proud of, that was my DTE policy. In working for a large corporation and working in this venue where you get to know all the policymakers, one of the things I'm most proud of was my work with the Michigan Children's Trust Fund. Governor Granholm had appointed me as the chair of that. I don't remember what year it was, 2003 I think. And we were able to reinstate a law that said that people can contribute tax dollars-they can contribute their own money, on the tax form-for the children's trust fund. And my principal role as chair—because the organization was functioning pretty smooth with or without me—I was very proud of the fundraising that I was able to do for them, and the differences that made in kids' lives. And I would have never been given that appointment without being the DTE Energy person in Lansing. It was a direct result of who I work for, rather than who I am so much. But I'm very proud of the work we accomplished.
MPN: You mentioned earlier, talking about the 2000 law, that you try to get the best deal for your shareholders and your customers. And one of the components of the 2008 package was revenue decoupling among utilities, which is supposed puts those two groups less at odds...
NM: Well, the decoupling is what made [the energy optimization program] make sense for a utility. The way a utility was structured and worked for profit-we're investor-owned, so we're not in the business of giving away money. We have to make money. Before decoupling, you would not as a utility want your customers to use less of your product. You got paid according to how much of the product people were using. So what decoupling did is allow us to make up some of what we used to get paid if the customers were using as much as they used to. It's kind of hard to follow, but it actually makes sense economically. It protected us, and it was really good for our customers because the long-term savings under energy efficiency are very impressive.
MPN: But before the decoupling, were there ever instances where you felt split between benefitting your customers or your shareholders?
NM: I think it's pretty consistent because a healthy company can do healthy things for their customers. It's not in our customers' best interest if the company fails. So I don't really think we get at odds. We don't find ourselves very often—in fact in can't remember when— we had the consumer groups fighting us. I don't know what that would be on. Before I came to the utility, long ago, there used to be a lot of consumer tension with the utilities. But that hasn't been true since I've been here. And I've been here a long time.