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Utilities Don't Want You to Know This Reason Why Your Power Bills Are So Expensive

The dirty truth behind utility lobbying, their greenwashing efforts, and the path forward to hold them accountable

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100% Clean Power Climate & Environmental Justice

 

 

At a Glance

Utility companies are monopolies, and they have us trapped paying sky-high bills. What they don’t want you to know is that they are using your hard-earned money from your monthly bills to subsidize their backdoor anti-climate, pro-fossil fuel lobbying.

Watch the explainer video now.

 

 

If you’re like most Americans, you’ve seen your power and gas bills go up and up. This isn’t because you’re using more energy—and in fact, you might be cutting back on usage or other expenses to pay the growing bills.  

You can’t take your business elsewhere because your utility is a monopoly—there’s no alternative provider. And you have no choice but to pay the bill month after month because the fact of the matter is we all need electricity to power our appliances, keep the lights on, and cook our meals. 

As if jacking up our bills isn’t bad enough, what utilities are doing behind the scenes with our hard-earned money is even worse. 

Most utility companies are sneaking the costs of their anti-climate and pro-fossil fuel political lobbying into the fine print of our energy bills. This means, as paying customers, we’re trapped into funding climate delay.

Utilities are using millions of our dollars to pay membership dues to dangerous, powerful trade groups like Edison Electric Institute (EEI) and the American Gas Association (AGA), lobby against state and federal climate and clean air policies, and run Big Tobacco-inspired disinformation campaigns to mislead the public about their role in accelerating the climate crisis. While many utilities and their trade groups are publicly claiming to support the clean energy transition, behind closed doors, they are actively lobbying against crucial climate legislation and attempting to lock us into polluting, expensive energy sources.   

To be clear, the vast majority of Americans do not want their power bills to fund utility lobbying. But, ironically, we're paying bills to companies that turn our hard-earned dollars into lobbying to prevent us from seeing the affordable, clean energy future we actually want. Utilities have essentially enlisted us—their captive, unwitting customers—as donors in their scheme to work against our interests. 

It’s time to change course. To chart a path forward, we need to understand how they came to be a monopoly in the first place and, crucially, what they agreed to in return: regulation. This monopoly system and lack of effective regulation are the primary reasons why we’re facing rampant utility unaccountability today. They are also the key to reeling utilities back in. 

“My work is to make language more accessible because energy is something that can be super, super complicated. And also we're all experts in energy, right? Like we know when the power is on or off, we know when our bills are going up.”

Selena Feliciano Energy Democracy Project

Public Utilities Aren’t Acting in the Public Interest

Over time, monopoly utilities have been designed for corporate profit. In the early 20th century, the U.S. started to harness electricity and build it out at scale. At that time, electricity was predominantly generated by big coal plants, which were expensive to run and transmit. Samuel Insel, an associate of Thomas Edison, conceived of the system to address this challenge that we still use today: the regulated investor-owned utility monopoly model. Under this arrangement, private companies get a monopoly, granted by the state, over the equipment to generate, transmit, and distribute electricity to customers. And in return, they agreed to be regulated.

Today, about two-thirds of Americans are served by investor-owned utilities, regulated by public utility commissions, which are supposed to keep the electricity system safe, reliable, and affordable. But many of these regulators are up against a formidable opponent—the utility companies, themselves. As a result, utilities have become profit-making machines, traded like any other company on the stock exchange, and beholden to shareholders and Wall Street execs over actual customers.

The current approach to regulation creates a perverse incentive to build bigger and more expensive things, so the utilities make larger profits, even when cleaner, more affordable solutions are available. 

Utilities have also used their economic model of leeching money off their ratepayers to secure political monopolies by becoming major campaign contributors and lobbyists in their state. Research shows their nefarious efforts are paying off: There’s a clear correlation between states where utilities lobby against climate action and states lacking meaningful climate legislation. 

@evergreen_action This is why your power bills are so high right now. Check out our full investigation to learn more. #climateaction #utilities ♬ original sound - Evergreen Action

While Utilities Pay Execs Millions, Customers Are Forced to Pay Growing Energy Bills 

Across the country, this broken system hurts customers most of all. In California, while hardworking families are unable to afford their growing gas bills, SoCalGas’ CEO earned over $25 million last year. Using ratepayer money, the gas company has spent tens of millions of dollars to advocate against and undermine local climate policies that would benefit its customers. This includes a recent case in Berkeley, where SoCalGas funded a lawsuit to block building electrification efforts that would’ve improved public health and cut deadly pollution for residents. 

In Michigan, DTE Energy, the state’s largest power company, provides some of the dirtiest and least reliable energy in the country—and it just bumped up its rates by 6.4 percent. Instead of using ratepayer funds to benefit its customers, DTE charged them an eye-popping $5.3 million to pay for membership dues to spurious groups like EEI and fund fancy getaways to curry favor with local utility regulators.

Making matters worse, pandemic-era protections have left customers unprotected from the wrath of utilities, and millions of Americans have had their electricity shut off over unpaid balances. These shutoffs have disproportionately targeted BIPOC and low-income families, who typically spend a far greater percentage of their income on utility bills and are less likely to be able to afford the cost of transitioning to more energy-efficient appliances. 

“They're not building and embracing clean energy enough, not fast enough. They want to make sure they get to own it all and not have to compete with anybody else. So they'll slow the whole thing down in service of their monopoly.”

David Pomerantz Energy and Policy Institute

Utilities Are Lobbying to Keep Us Hooked on Dirty Fuels

Utilities invested heavily in setting up the infrastructure around dirty fuels a century ago, and despite their modern-day climate pledges, they have continued to double down on coal- and gas-fired plants since then. 

Today, power plants are to blame for a quarter of our nation’s climate pollution. While renewable energy is now cheaper and more reliable than gas and coal—not to mention better for our health and our climate—utilities are more interested in keeping business as usual to protect their profits, pay record dividends to shareholders, and shell out bonuses for executives.

To hook us on expensive, dirty fuels indefinitely, utilities and their lobbying groups EEI and AGA, have tried to block clean power legislation over and over again. Back in 2015, EEI tried to quash President Obama’s Clean Power Plan, claiming it was too difficult for utilities to meet the requirements. We know this was all blather and stall tactics, as they ended up meeting the goals a full decade early. Most recently, EEI has been trying to block popular, common-sense rules regulating pollution from power plants using the same flawed arguments. And all of this backdoor lobbying that doesn’t align with our best interests? Utilities are doing it on our dollar. 

 

The Way Forward: How We Hold Utilities Accountable

Remember that agreement utilities struck with the government? That they could be a monopoly as long as they are regulated? Well, both sides are failing this bargain. 

First, there’s an inherent conflict of interest between regulators, who are responsible for ensuring fair prices and reliable service, and utilities, who were set up to serve their bottom lines above all. Yet, utilities are using the guaranteed money they are getting from customers to lobby these same regulators, curry favor among legislators, and amass political power. 

Absent meaningful regulation and the presence of competitors, utilities and their trade groups have amassed a huge amount of power. Regulators are the key to making this system work for us, and they are unable to, in part because of the unchecked power of utilities and their trade groups. At the core of this problem is the way utilities fund their political machines—us, their ratepayers. 

The solution is straightforward and begins with getting customer money out of utility lobbying. Promisingly, there’s a growing trend where states are passing laws to protect customers by making it illegal for utilities to embed political advocacy costs into their customers' bills, along with transparency requirements to report on what customers’ bills are truly funding. 

Americans have the right to demand more from their utilities and deserve accountability—now and in the future. It's time to pass common-sense laws to protect our wallets and our clean energy future. 

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