In this blog post, authors Paul L. Singer, Beth Bolen Chun, Abigail Stempson, and Andrea deLorimier (Kelley Drye) discuss a 16-state Republican investigation announced by Montana Attorney General Austin Knudsen into four “big tech” companies regarding allegedly deceptive renewable energy claims. The AGs sent a letter to the companies raising concerns and requesting information about claims that they are 100% powered by renewable energy, with a deadline of October 27 for responses. The letter alleges that these companies purchase unbundled renewable energy certificates (RECs) to support their claims, but argues that claims of consuming, using, or being powered by 100% renewable energy based on RECs may be misleading, since RECs do not prove additional renewable energy generation would occur or that purchasers actually used renewable energy.
The authors explain that the AGs’ letter asserts tech companies use electricity from the power grid, which relies on fossil-fuel-generated baseload power, meaning they are not actually powered 100% by renewable energy despite REC purchases. The letter compares purchasing a contractual right to make renewable energy representations through RECs to buying the right to make a “Made in the USA” claim, suggesting both can mislead consumers. The AGs further argue that matching electricity consumption with unbundled RECs does not reduce emissions as companies claim, since those companies actually create emissions through their use of fuel-generated baseload power. While the AGs acknowledge that the FTC’s Green Guides suggest renewable energy claims can be made using REC matches, they argue this language does not apply to emissions claims and emphasize that Green Guides are nonbinding and not preemptive, signaling their intent to interpret their UDAP laws more broadly than the Green Guides in this instance.
The letter also expresses concerns that tech companies have both increased electricity demand (including from AI products) while attempting to “lock up” nuclear power by seeking to connect data centers directly to nuclear plants for energy. The AGs assert this approach will deprive consumers of reliable energy rather than adding new green energy, as wind and solar are not reliable sources. They contend that the emphasis companies place on renewable energy pressures utilities to move away from fossil-fuel-generated baseload power, and that this shift to shut down fossil fuel generation combined with increased energy needs “threatens the integrity of the electric grid.” The letter concludes with 21 questions requesting information from all four companies about their purchases of unbundled RECs and how RECs support usage claims or reduced emissions claims.
The authors identify multiple takeaways from this action. First, it represents the latest instance of state AGs focusing on “big tech” and potential misrepresentations by these companies. Second, companies should recognize that even where AGs may lack pre-suit discovery tools or choose not to use them, they can leverage press releases and informal letters to obtain relevant information. Finally, the action demonstrates a continued focus by Republican AGs on ensuring adequate access to fossil fuel-generated power, with the core concern being that by misleading the public about being 100% powered by renewable energy, these companies may drive the closure of coal and natural gas plants, threatening the power grid. The authors note that continued reliance on fossil fuels is also a focal point of other challenges, such as the ongoing lawsuit against major investment firms alleging they used their ownership interest in the coal market to further green policy initiatives…
CONTINUE READING…
