Power Bills Are Soaring. So Are Utility Profits. Americans Pay The Price.

Investor-owned utilities pocketed $244 billion in profit off ratepayer bills between 2021-2024

America’s energy affordability crisis is spiraling out of control, leaving our families and businesses unsure how to pay their bills, with the reasons seemingly out of control.

Even before the Iran war spiked oil and gas costs, factors like the federal government repealing tax credits designed to cut energy costs, surging electricity demand, volatile natural gas prices, and expensive and unreliable coal plants had pushed electricity prices far past “normal” – nearly 1 in 20 households now face utility debt so severe they will be sent or soon will be sent to collections.

A new analysis reveals a hidden reason America’s electricity bills are skyrocketing: utilities raking in massive profits from consumer bills. The Energy Policy Institute recently released an analysis showing utility ratepayers are paying hundreds of millions to pad utility profits, right when energy affordability is at its worst point in years.

We asked David Pomerantz, EPI’s executive director, about the new research and what consumers can learn from an online tool that reveals how much profit their specific utility is making off their bills.

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Silvio: EPI’s new tool is the first analysis of how much profit electric utilities take from customer bills – certainly timely considering electricity bills surged 13 percent in 2025. What was your biggest takeaway from this analysis?

David: The biggest takeaway is that for most Americans, when they pay their electric bill every month, a big chunk of that bill – probably bigger than they think – is going to their utility’s corporate profits. That number averaged 15 percent in 2025, based on the data we have so far. That means that if a customer has a $200 electric bill, something on the order of $30 isn’t paying for electric poles, or wires, or power plants. It’s paying a wealth transfer to Wall Street and the company’s executives. We made a calculator so you can see how much you’re paying toward profits.

In aggregate, that money adds up. From 2021 to 2025 (with some 2025 data still being reported), corporate electric utility profit margins were $244 billion.

A host of studies show that level of wealth extraction is not necessary for utilities to provide safe and reliable service. For all the talk from policymakers about how to lower customers’ bills, these inflated profits seem like a great place to start.

Silvio: Your analysis shows the national average profit share in 2025 was 15 percent of what a consumer pays on their electricity bill. Did any utilities stand out as taking a larger portion of profit than that average? If so, what’s behind those outliers?

David: Yes! This was the most surprising research finding to us. Very large utilities, some with millions of customers, are taking as much as 25 percent in profits from every customer’s bill.

SoCalEdison and Florida Power & Light, two of the largest utilities in the country, extracted 26 percent and 27 percent, respectively, of profits out of customers’ bills in 2025. Georgia Power and Duke Energy Carolinas were at 23 percent and 22 percent.

These numbers jump around a bit each year, but from 2021-2024, nearly 40 utilities retained more than 15 cents of every revenue dollar as profit. The utilities with the highest average profit shares over that four-year period were MidAmerican Energy in Iowa, at a whopping 27 percent, and Florida Power & Light (FPL), at 23.5 percent.

People who work around utility ratemaking are used to hearing that utilities’ return on equity averages about 10 percent. That number reflects what utility investors are allowed by state regulators to earn on their share of capital investment. It’s kind of like a mortgage or interest rate, in that it has a compounding effect. So if a utility is making a lot of capital expenditures, and regulators allow it to earn a high return on equity, customers can wind up paying these very high percentages toward corporate profits over time.

Silvio: Did you see any difference between monopoly utilities that own their own generation versus those that sell power into organized power markets?

David: We did. Vertically integrated utilities, like those in the Southeast, tended to take higher profits as a share of customers’ bills than did the utilities that sell power into wholesale power markets. Between 2021 and 2024, Southeastern utilities retained nearly 16 percent of revenue as profit.

In the Southeast, the utility owns generation, transmission, and distribution — meaning that any profit that’s generated in that whole value chain flows to them. In competitive wholesale markets, regulated utilities only own transmission and distribution; generation is often owned by independent power producers whose profits aren’t captured here.

That doesn’t mean the organized markets are guaranteeing better outcomes for customers. PJM’s data center boom, failure to interconnect new generation, and capacity market shortfalls have led to soaring prices for customers, for example. But the analysis does show that the Southeastern utilities are consistently extracting exorbitant profits from captive customers – more than is necessary to provide safe and reliable electricity service. Southeastern state Public Utility Commissions have granted these utilities some of the highest returns on equity in the country.

Silvio: EPI recently published research showing that states where laws prohibit utilities from spending customer money on political activities are saving consumers hundreds of millions per year. Is that the best option for state officials looking to protect their constituents from soaring utility bills, or do they have other options?

David: That’s certainly a great place to start! These political influence costs – expenses like lobbying, promotional advertising, political trade association dues and legal fees – can add up to millions of dollars. Customers are outraged when they learn they’re paying for them. It should be a no-brainer for policymakers to get these costs out of rates and make the utilities pay for them out of their exorbitant costs.

That policy alone won’t stem the affordability crisis, of course. No single policy can do that. But if policymakers can’t take that most basic and obvious step, it’s going to be hard for them to take the next ones.

Lots of other great ideas are gaining traction right now. One obvious one is to right-size utility returns on equity. Others include creating public financing for clean energy and transmission assets, strengthening state grid planning capacity, and requiring utilities to increase their utilization of existing assets.

Personnel is also policy. Many of these solutions are within the purview of Public Utility Commissioners, most of whom are appointed by governors. Governors should pick great ones who will regulate boldly in the public interest, and then back them against investor-owned utilities try to undermine them.

Silvio: Given all this new analysis, what can the average person do to reverse the trend of utilities profiting off utility bills?

David: The main thing that’s propped up utilities’ ability to earn these massive profits over the years has been their massive political operations (much of which gets funded out of people’s electric bills, as you mentioned!) Utilities will understandably deploy all their political power to protect their profits. That means that passing reforms that can right-size utility profits, and ultimately lead to lower bills, will require a lot of political engagement from customers to overcome that entrenched incumbency power.

Fortunately, we are now seeing a lot of policymakers, from both sides of the aisle start to recognize and call out the problem.

Political advocacy is hard to do alone. Most states have great consumer and environmental advocates working toward these aims. Folks should find an organization that’s advocating for some of these reforms to lower profits and bills in their own state, and join them.