by Chris Andrews
March 16, 2008

How many lobbyists and PR firms does it take to change an energy law?

The major utilities’ team includes lobbyist Tom Hoisington and PR executive Kelly Rossman-McKinney.
Photo by David Trumpie

As many as you can get. And even that may not be enough if there are as many firms and political foot-soldiers engaged on the other side.

There may or may not be consensus on energy policy in Michigan any time soon. But in the meantime, the current debate over energy regulation and alternative energy has become, if nothing else, an economic stimulus package for Lansing’s powerful multi-client lobbying firms and the leading issue-management public relations companies.

The battle is largely between the state’s two dominant utilities, Consumers Energy and Detroit Edison, and the Customer Choice Coalition, a group that includes their competitors, businesses, trade associations, school groups and others. The utilities want to eliminate most or all of the competition created by Public Act 141 of 2000 before they embark on billions of dollars of investments in a new 800-megawatt clean coal plant in Bay City. Their opponents say competition and choice have benefited businesses and consumers and that private power producers are eager to build plants in Michigan if they have the fair opportunity to compete for customers.

And the legislation is linked — at least for now — to legislation that would create a Renewable Portfolio Standard (RPS) setting minimum standards for the use of renewable energy in Michigan. Governor Jennifer Granholm says alternative energy businesses won’t open wind turbine plants or make other investments in states that aren’t committed to green power. She wants the legislation finalized yet this month, but that’s not expected to happen unless lawmakers decide to break the tie bar and consider RPS as a stand-alone issue.

Both sides have muscled up, building high-priced, high-powered armies with multiple multi-client lobbying firms and the leading public relations agencies. Veteran lobbyist Tom Hoisington says it’s a relatively new template, but one that will become increasingly common on major issues with layers of complexity.

“There used to be a checklist: do you have your message right, have you talked to leadership?” said Hoisington, president and chief operating officer of Public Affairs Associates and a key player in the energy debate. “Now there’s a whole new page. Do we need a new coalition, do we need new foot-soldiers, do we need more media control? That, to me, looks much more like the Washington model.”

Consumers Energy is represented by both its own lobbyists and by another of Lansing’s multi-client lobbying giants, Governmental Consulting Services Inc., which has represented Consumers for years. Public Affairs Associates has been carrying the legislative water for DTE, Detroit Edison’s parent company, for decades, but DTE has also engaged the services of lobbying heavyweights Kelley Cawthorne (the firm of former Michigan Attorney General and utility basher Frank Kelley) and Karoub Associates for the battle over electric regulation.

The media and public relations campaign is being handled by PR pro Kelly Rossman-McKinney, chief executive officer of the Rossman Group, along with CMS Energy’s internal team of Jeff Holyfield and Dan Bishop.

And in the other corner stands Barry Cargill, executive director of the Customer Choice Coalition, and a multitude of other highly respected multi-client lobbyists. They include Muchmore Harrington Smalley & Associates, Michigan Legislative Consultants, Midwest Strategy Group and Fraser Consulting.

Martin Waymire Advocacy Communications is the primary public relations firm for the coalition, but The John Truscott Group, John Bailey & Associates and Maureen Saxton McNulty are also involved.

Many other government affairs pros are involved in one way or the other, on one side or the other.

High stakes
Amid all the conflicting facts, claims, studies and news releases, the two sides agree on this: the stakes are high.

Granholm believes the alternative energy industry can be a centerpiece in Michigan’s efforts to reinvent itself economically and overcome the loss of hundreds of thousands of manufacturing jobs over the past several years. She envisions Michigan becoming a leading producer of windmill turbines and says the state is ideally suited in terms of its geography, climate and skilled work force to take advantage of wind power.

But she says that will only happen if Michigan enacts a Renewable Portfolio Standard. For now, she told reporters last month, Michigan remains a “backwater,” lagging behind more than two dozen other states that have enacted standards. Granholm’s proposal would mandate that 10 percent of the state’s energy come from renewable sources by 2015 and 25 percent by 2025.

She would also like the RPS standards tied to legislation that would eliminate most of the competition created by Public Act 141 of 2000. Consumers Energy and DTE say they are committed to investing billions of dollars in new clean coal plants — creating thousands of jobs in the process — but can’t do it unless they know the customers will be there as the plants go online several years down the road.

“The real problem with Public Act 141 is that it creates a great deal of uncertainty in the Michigan electric markets,” Consumers’ spokesman Holyfield asserts. “When you’re trying to finance a project of that size, the financial community wants to make sure you’ll be able to repay it, and that’s where the uncertainty comes in. We’ve got 1.8 million electric customers. Tomorrow every one of them could sign up and go to an alternative energy supplier. Is that likely? No, but it’s possible.”

But others say Public Act 141 has been effective in holding down the cost of electricity. The Customer Choice Coalition says commercial electric rates increased by 11.2 percent between May 2000 and May 2007, compared with 19 percent for the region and 33.3 percent nationally.

“The one thing that has gotten lost in this is that the reason it (Public Act 141) was passed is because we were hearing in the Engler administration time and time again that our energy costs were too high. We were losing selection of plants because of that,” said John Truscott, who was former Governor John Engler’s press secretary before starting his public relations and lobbying shop. “If we return to giving everything back to the utilities, the number one problem that we will face economically will be high energy costs again.”

Holyfield says that limited competition — capped at 10 percent — is a reasonable compromise. The choice coalition disagrees.

It’s complex stuff for lawmakers and the public to digest, and the two sides are issuing reports and counter-reports warning of dire consequences if their side doesn’t prevail. With the stakes so high, no one wants to risk losing because they are outgunned.

“It’s almost like when the Russians get a new set of nuclear weapons, the Americans have to keep up and have their own set of nuclear weapons,” said Dave Waymire, a partner in Martin Waymire.

“The utilities always have a huge set of assets. They always have a giant PR operation,” said Waymire, a former capital reporter who has become one of Lansing’s most tenacious PR advocates. “If the other side wants to be in the game, it has to step up and show the effort.”

Rossman-McKinney said there are also times when a client seems to be hiring additional lobbying talent primarily to keep them on the sidelines.

“One of the tactics that some of the larger organizations have employed is to bring on other firms to make sure, at a minimum, they are not working against you,” Rossman said. “Some of the lobbying firms get hired to do what’s called ‘the monitor,’ where they are not aggressively taking action but they are monitoring the progress of a particular bill.”

Term limits
Political insiders agree that term limits have fundamentally changed the dynamics of lobbying and contributed to a growth in the industry.

In the olden days — pre-1999, when the first lawmakers were swept out of office by the term limitations approved by voters in 1992 — a lobbyist could know every legislator and become tight with key committee chairs, who often held the gavel for many years and became experts in their own right.

“You don’t have the same level of institutional knowledge that you did in the era of Jacobetti,” said Rossman-McKinney, referring to the late Dominic Jacobetti, long-time chair of the House Appropriations Committee. “You have an awful lot of people who are facing an issue for the first time. It might be health insurance, it might be electric regulation, and as a result, there is a huge opportunity and really an obligation to provide as much straightforward, factually based information as you possibly can.”

Term limits make it impossible for lobbyists to foster the same types of relationships they did in the past, particularly in the House. With the rare exception of a term-limited senator who runs for the House, nearly all state representatives have less than six years experience. Term limits guarantee dozens of new, inexperienced faces with each election cycle.

“The days when a corporation could have one guy padding around the Capitol checking in with five people out of 148 and control that universe are long gone,” Hoisington said.

Hoisington says that while today’s lawmakers are as talented as those before them, they aren’t around long enough to acquire the same level of expertise. That means a steep learning curve, and a greater challenge for lobbyists helping to bring them up to speed.

“The members of the energy committee became somewhat experts on energy issues and policy because they spent seven, eight, nine years hearing the different scenarios. That’s gone now. They’ve had to go on a crash course,” Hoisington said. “Everything is complicated here. Energy policy has a million moving parts. The cable bill of last year had many moving parts. Anything that really matters has got a lot of pieces.”

He adds, “I give credit to those who try to take those issues on. I’ve been representing Detroit Edison for 30 years, and I’m still learning things every day that I did not know before.”

The new era of multiple multi-clients lobbying firms and public relations shops being hired by a single client is still in its infancy. It was ushered in during 2003 by Taubman Centers Inc., a Michigan company that operates shopping malls around the country. It assembled a multi-firm team to fend off a hostile takeover attempt by Simon Property Group. The strategy worked. Lawmakers enacted the legislation, Granholm signed it, and Simon dropped its takeover bid.

Since then, similar coalitions have been put together on cable franchise legislation, Blue Cross Blue Shield of Michigan bills now pending, as well as the energy package.

In issues like energy, the challenge is to effectively manage resources of several firms and avoid duplication of effort that can be wasteful or even counterproductive.

Hoisington is DTE’s primary lobbyist and, as such, has a lead role in directing the efforts of lobbyists from other firms. On other issues, he may play a support role, taking his cues from the lead firm. The lobbyists consider issues like who has the best relationships or quickest access to a particular legislator.

Dave Waymire and Barry Cargill (in background) lead the discussion during a Customer Choice Coalition meeting. Photo by David Trumpie

“I think it is fair to say that if I’ve got the long-term relationship (with a client), the client will call me before the meeting starts and say ‘where do you think we ought to be going here?’ They’ll get your ideas and take those ideas and form them into a plan that they lay out in the meeting,” he said. “Sometimes I get those calls, sometimes somebody else gets those calls because they have the relationship.”

Jim Crawford is a lobbyist with Karoub Associates, which represents DTE and the Michigan Municipal Electric Association. He said lobbyists don’t want to waste lawmakers’ time, but at the same time, it doesn’t hurt for lawmakers to hear a message twice and know that many people are engaged.

“There will be overlap, and we don’t discourage that,” Crawford said. “If I talked to somebody, and somebody from Public Affairs talks to somebody, that’s a good thing, not a bad thing.”

PR wars
The public relations firms take a similar tack in their efforts to win over the hearts and minds of consumers and voters, as well as lawmakers.

While several public relations firms are involved in the Customer Choice Coalition, Martin Waymire has taken the lead. It’s Waymire’s job to make sure everyone is rowing in the same direction. That means frequent meetings, conference calls and e-mails to make sure everyone is up to date with the latest developments and involved in decisions such as who will testify at a committee hearing or speak at press conferences.

“We have different groups and subgroups so that we don’t overweight people with meetings,” Waymire said. “But we do need to have meetings and conference calls and e-mails to hear things.”

The John Truscott Group, which represents LS Power and is part of the Customer Choice Coalition, helps prepare testimony, writes letters to the editor, contacts reporters and serves as a liaison to think tanks and research firms studying the issue.

“On issues like this, there is so much information and misinformation out there that it takes almost an army to keep it straight,” Truscott said.

Truscott said he has had to work diligently to counter the claim by House Speaker Andy Dillon that Wall Street won’t finance independent coal plants such as one LS Power is building in Midland.

“I have talked to people in the private finance area who are more than happy to do this,” he said. “They may not be U.S. banks that do it, but there are plenty of European banks that do this all across the country.”

Alliances shift
With changing issues come changing coalitions. Lobbying and public relations firms that are working together on energy can find themselves on opposite sides on legislation dealing with Blue Cross Blue Shield of Michigan or cable television franchises.

The pros know they must represent their clients aggressively, but not take the contest personally.

“There is a saying, ‘There are no friends and enemies in Lansing.’ There are allies and adversaries, and they can change from minute to minute,” Rossman-McKinney said. “It’s not unusual to go into a committee meeting and be on the same side with somebody you are going to be opposing in the afternoon.”

Chris Andrews is the award-winning former politics editor of the Lansing State Journal.