Watchdog organization Energy and Policy Institute compiled a report that claims investor-owned utility profit margins are on the rise, with 13-15% of customers’ bills bankrolling profits.
EPI’s report, “Paying for Their Profits: How Ratepayers Foot the Bill for Soaring Utility Profits,” said that from 2021 to 2024, utilities kept on average of 13 cents in profit of every dollar customers paid, totaling $195 billion in profits. EPI said electricity bills “far outpaced” inflation and the median wage, affecting customers’ ability to pay.
“This is just the latest example of EPI making up alternative definitions that serve the interest of their dark-money benefactors,” said Dani Marx, a spokesperson for the Edison Energy Institute, an association that represents investor-owned electric utilities.
Another critic of the report called it “a naked attempt to inflame the public against energy bills that have risen due to the restrictive policies” EPI has “championed for years.”
Daniel Tait, EPI’s research and communications director, said researchers analyzed publicly available data from about 110 investor-owned utilities across the country from 2021 to 2024. Utilities included electricity-only utilities and those that bill customers jointly for electric and gas service.
Tait said EPI used a “straightforward calculation” of net income divided by total operating revenue.
As part of the report, EPI included a net-profit utility report and calculator tool, where ratepayers can look up their utility and type in their bill amounts to figure out what portion of their bills go directly to profits.
“Transparency here is going to be just the first step,” Tait said.
Tait said EPI plans to update its calculator tool as utilities report their 2025 financial results. During a March 12 webinar to discuss the report, Tait said data collected so far on 2025 financials show that profit margins are getting larger, closer to 15 cents on the dollar.
Tait said EPI found that for an electric bill, an average of $30 goes directly to corporate investors.
“That is money not to keep the lights on, not to build the grid, but just for that profit,” Tait said. “And that share is rising as bills have gone up.”
EPI said the pattern of rising rates and rising profits “raise important questions about the balance between utility profitability and affordability, especially as customers nationwide face continuously high energy costs and immense financial strain.”
Tait said that while politicians and utilities often point to things like fuel costs, infrastructure investments and extreme weather events when explaining rate hikes, they often leave out how much of a customer’s bill goes to shareholders.
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EPI said that between 2021 and 2024, almost 40 utilities averaged profit margins above 15%, with other utilities trending even higher. Utilities they found with the highest average profit percentages over the four-year period include: MidAmerican Energy (27.22%), Florida Power and Light (23.51%), Nantucket Electric (23.24%), Empire District Electric (22.45%), Florida Public Utilities (20.35%), CalPeco (20.28%), Public Service Electric & Gas (19.44%), Duke Energy Carolinas (19.07%), Alabama Power (18.71%) and AEP Texas (18.63%).
EPI also said that of the 79 utilities that released 2025 financial information at the time it was finalizing its report, the highest profit margins were at Florida Power and Light (27.44%), MidAmerican Energy (27.16%), SoCal Edison (26.11%), Georgia Power (22.57%) and AEP Texas (22.19%).
Marissa Gillett — former Chair of Connecticut’s Public Utilities Regulatory Authority and now a senior fellow at the American Economic Liberties Project — said even before today’s affordability crisis, customers expressed “feelings on a spectrum ranging from confusion to outrage regarding the size of utility profits.”
During the webinar, Gillett said there are “four policy levers that can be utilized immediately to address the moment we’re in,” including dialing down artificially high return on equity rates, re-examining capital structures, modifying the ratemaking process to right-size utility profits and adding more consumer advocate voices to the ratemaking process.
She said anyone who hasn’t historically participated in rate proceedings needs to become involved. She also said state commissions should be filled with qualified candidates.
Gillett said the country’s investor-owned utilities are making for a “particularly extractive moment” because of “mismatched” incentives utilities receive for capital buildout. She said the return on equity drives utilities to build more, as evidenced by EEI announcing that utilities intend to spend $1.1 trillion over the next four years.
“Profits … are going to get higher if all of that capital investment enters into the utilities’ rates,” Gillett said.
Marx of EEI offered a different point of view. “There are standard calculations for evaluating regulated utility profits that appropriately recognize that most of a customer’s bill reflects pass-through costs of service, but EPI instead took a simple but analytically weak and insufficient approach to intentionally mislead readers into believing that a high percentage of customer bills goes toward profits.”
Brionté McCorkle, executive director at Georgia Conservation Voters, said consumers increasingly are spending higher shares of their income on utility bills. “That burden just continues to get worse as power bill continue to rise,” she said.
McCorkle said her most recent Georgia Power bill was about $233, with roughly $52 of that for utility profit. “That is really high,” she said. “It’s not that they’re raising these bills because it’s necessary to keep the power on. They’re raising these bills and they’re padding their profits.”
McCorkle said utilities are “incentivized to build even if the demand for energy never fully manifests.” She said even if big capital expansions aren’t prudent, utilities can take the investment risks while their rate base foots the bill.
“We’re not just paying for what we build; we’re also paying for the company to profit. … It’s just not designed well,” McCorkle said of the current setup.
McCorkle said the report helps “cut through the claims” that the increases are necessary to keep service reliable. She said utilities can still be profitable, “just not egregiously so.”
Marc Brown, Consumer Energy Alliance vice president of state affairs, derided the EPI report.
“This report is connected to neither sound accounting nor reality,” he said in an emailed statement. “The report’s own disclaimer says that any output is an estimate that could fluctuate wildly, which is to say that fantasy football and uninformed guesses are more accurate.”
He continued: “EPI is the three-card monte of so-called policy organizations. They want you to look elsewhere while remaining silent on state policies, which are responsible for as much as 40% of customer bills in some states. They ignore policies like net metering, which transfers wealth from the poor to the rich, and never offer solutions to failing market designs, which have resulted in future generating capacity shortfalls in PJM, MISO and NYISO.”
“Additionally,” he wrote in reference to Gillett, “one must question the credibility of an organization that casts doubt on others’ motives while remaining shrouded in darkness as to who they represent. Especially when one considers that this line of attack comports with the thinking and behavior of their favorite disgraced state commissioner.”
Ultimately, state regulators are charged with evaluating projects to ensure they’re necessary and benefit customers. Those regulators determine what level of earnings is appropriate for utilities.
