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Amid shift away from coal, 7 utilities exit trade group tied to EPA officials

At least seven electric utilities have ended their membership in the Utility Air Regulatory Group, one of the foremost legal challengers to the U.S. Environmental Protection Agency's air pollution and climate rules in recent decades.

The move comes as a number of utilities are shifting away from coal-fired generation and investing in new natural gas and renewable projects and as top Democrats of a House of Representatives panel are probing Utility Air Regulatory Group's, or UARG's, inner workings.

Minnesota Power Inc., a subsidiary of ALLETE Inc., canceled its membership, effective April 16, company spokesperson Pat Mullen said in an email. Other companies that confirmed they are no longer members of UARG are Duke Energy Corp., DTE Energy Co., Consumers Energy Co., Dominion Energy Inc. and its subsidiary South Carolina Electric & Gas Co., NiSource Inc., and Kansas City Power & Light Co.

Run out of the law firm of Hunton Andrews and Kurth, UARG has recently come under close scrutiny after media reports revealed how former Hunton lawyers who now serve as top officials in the EPA's Office of Air and Radiation have allegedly maintained close contact with their old firm. A spokesperson for the law firm did not respond to a request for comment.

Moreover, some Democrats on the House Energy and Commerce Committee recently launched a probe into the trade group with a particular focus on whether Bill Wehrum, the head of EPA's Office of Air and Radiation, and agency Senior Counsel David Harlow, who formerly represented UARG as attorneys, violated federal ethics rules by working to reverse the EPA's position in ongoing litigation. As part of the probe, the Democrats sent letters to seven utilities asking, among other things, whether the companies use "ratepayer or shareholder monies" to pay UARG membership dues.

But shifting utility priorities, and not the probe, seems to have been the primary driver behind UARG's declining membership.

Most of the confirmed departures, first reported by Politico and E&E News, occurred prior to the probe's April 11 launch. Dominion and Kansas City Power and Light told S&P Global Market Intelligence they did not renew their memberships this year, NiSource ended its participation in UARG at the beginning of 2019, and Duke Energy canceled its membership as of March.

Moreover, Minnesota Power, NiSource, DTE and Duke suggested they left UARG because they no longer need the group.

NiSource President and CEO Joe Hamrock in an interview at an Energy Thought Summit in Texas noted UARG "advocates for balanced, constructive policies around the use of fossil resources" but "as we move away from coal, (there is) no real need to be in the group."

Duke said that as it shifts toward a "smarter energy future and transitions our generation fleet, we continuously assess our membership in industry groups to ensure that they support our customers’ expectations for reliable, affordable and increasingly clean energy. During this review, we ceased our membership with UARG," said Duke spokesperson Shannon Brushe.

Minnesota Power's Mullen said "the UARG membership has been under consideration for quite some time. ... Because air regulations have matured and Minnesota Power has implemented the required air quality improvements in our fleet, UARG no longer aligns with our company’s priorities, and we decided to discontinue our membership."

A further indication that the House probe itself may, as yet, not have put much of a dent in UARG's membership is that five of the seven companies Democrats wrote to as part of the UARG probe — Ameren Corp., Southern Co., FirstEnergy Corp., American Electric Power Co. Inc. and Tennessee Valley Authority — as of April 17 said they are all still members of the group. The other two entities, Tri-State Generation and Transmission Association Inc. and Vistra Energy Corp., did not respond to a request for comment as of press time.

AEP Spokeswoman Tammy Ridout said, "UARG was formed more than 40 years ago to help the electric generating industry navigate and achieve compliance with the Clean Air Act." She added that AEP has "made significant reductions in emissions from its power plants over the last three decades."

UARG "helps us and other utilities better understand and comply with Clean Air Act regulations. Our membership allows for sharing the cost of technical analyses and other research with other utilities, saving TVA ratepayer funds," said TVA spokesman Jim Hopson. He noted that TVA is not required to follow the UARG membership’s recommendations or positions, and TVA does not participate in or fund any UARG litigation or lobbying.