This is an adapted excerpt from the May 31 episode of “Velshi.”
Just search “utility companies” under news, and you’ll find a familiar story playing out across the country: report after report of skyrocketing electric bills and mounting public anger with service providers. Out-of-control utility bills have become another aspect of the country’s affordability crisis, driven by an industry operating with too little accountability.
Retail electricity prices rose 7% in 2025 alone, part of a nearly 40% rise since 2021, which makes it the fastest period of electricity price growth on record. The average household’s monthly electric bill has climbed from roughly $121 in 2021 to $156 today, marking a nearly 30% increase that outpaces inflation.
In the words of the American Economic Liberties Project’s Matt Stoller: “Where’s all the f&$*#ing money going?”
Meanwhile, utility companies continue to ask regulators to let them charge even more money. In just the first three months of this year, utility companies sought approval for $9.4 billion in rate increases. That follows a record-setting 2025, when they requested $31 billion, more than double what they sought the year before.
According to the consumer advocacy group Powerlines, “Today, nearly 80 million Americans are struggling to pay their utility bills, forgoing basic expenses like food, education, and health care to keep their lights on.”
In the words of the American Economic Liberties Project’s Matt Stoller: “Where’s all the f&$*#ing money going?”
For their part, the utility companies will point to extreme weather, aging infrastructure, the transition to cleaner energy and now the enormous power demands of data centers. And while that is real, it doesn’t add up — and it hasn’t for years. We have been paying more for years.
The government has increased spending on the U.S. transmission system fivefold over the past two decades. But if all that money were actually fixing the grid, why do we keep hearing the grid is unreliable? Why do we keep hearing we need even more?
The answer lies in the utility business model, the part most people never hear about. Most people assume utilities work like ordinary businesses. They don’t. A regulated utility does not primarily make money by selling you electricity at a markup. Nearly every dollar it spends on operating costs is ultimately recovered from customers through rates approved by government regulators.
The real profits come from something else: capital investment.
When a utility builds a power plant, transmission line, substation or other major piece of infrastructure, regulators allow it to recover those costs from customers over decades.
On top of that, the utility earns a guaranteed return on the money it invested. And that return is not trivial; for most investor-owned utilities, it falls somewhere between 9.5% and 11%. Compare that with what you earn in a high-yield savings account today, which is around 4% if you’re lucky.
According to the Energy and Policy Institute, a watchdog group that calls for greater accountability in the utility sector, investor-owned utilities pocketed $244 billion in profit off customers from 2021 through 2024.
Here’s the breakdown of those costs, according to the group’s executive director: “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.”
Now, it should be noted, this is an analysis that industry groups dispute. But consider the incentives that kind of business model creates. If you’re guaranteed a premium on every dollar you spend, what’s your next move? It is likely not fixing the grid or upgrading aging facilities; it’s spending more dollars.
Build more projects, deploy more capital. Whether those projects are the most efficient solution or even strictly necessary becomes a secondary concern.
That helps explain one of the strangest features of America’s electricity system. As Stoller puts it, utilities are “truly paid to fritter away money, to gold-plate and waste.” And, if that’s not bad enough, in some states these same utilities can spend your money on political activities.
According to the Energy and Policy Institute, in states where laws prohibit utilities from charging customers for political spending, consumers are saving hundreds of millions of dollars a year.
Meanwhile, you, the average customer, are sitting around believing that paying more will lead to a better grid. That is the implicit bargain behind every rate increase. Customers are told that higher bills today will lead to a more reliable system tomorrow. Yet the opposite complaint seems to be growing louder every year.
The federal organizations responsible for monitoring the nation’s electric system have repeatedly warned that large portions of the country face increasing blackout risks as power demand grows and existing infrastructure ages.
Ultimately, the problem is that the system rewards spending itself: A utility that finds a cheaper solution earns less, and a utility that spends billions building — not fixing — infrastructure earns more.
As Stoller puts it, “They are willing to waste $1,000 to send an extra $60 to shareholders.”
Many experts argue that one of the most effective ways to lower costs and improve reliability would be to build more high-voltage transmission lines connecting different regions of the country.
Think of the electric grid as a national marketplace. Some regions have abundant, inexpensive electricity. The Great Plains, for example, have some of the world’s best wind resources. The Southwest has enormous solar potential. Other regions, particularly dense population centers in the Northeast and parts of the Midwest, often face higher electricity costs and tighter supply constraints.
The obvious solution is to move more power between these regions. Done correctly, these projects can lower costs, improve reliability and make the entire system more resilient.
But that requires coordination. Large interstate transmission projects involve multiple states and multiple regulators, more oversight. And crucially, they don’t fit as neatly into the business model that rewards individual utilities for expanding their own assets.
As a result, utilities favor smaller local projects that are easier to approve, easier to build and guaranteed to generate shareholder returns.
Other countries have moved far more aggressively to build long-distance infrastructure capable of moving power across vast regions. Look at China, which has built more than 8,200 miles of high-voltage transmission lines in recent years. The U.S. has built a mere 375.
At this point, you may be wondering: Where are the regulators? After all, utilities don’t operate in a free market. Customers can’t simply switch providers when rates rise.
The entire justification for granting utilities monopoly status is that government regulators are supposed to act on behalf of the public. In theory, that’s the safeguard. In the real world, that has become part of the problem.
Consider a recent example in Pennsylvania. When the Pennsylvania utility PECO — a subsidiary of Exelon, the largest utility in the country — recently asked for a return of nearly 11%, far above the national average, it took the governor publicly shaming them to get it withdrawn.
Customers are told that higher bills today will lead to a more reliable system tomorrow. Yet the opposite complaint seems to be growing louder every year.
Democratic Gov. Josh Shapiro called PECO’s proposed rate hike “pure greed.” In response, PECO said in a statement that the company “shares Governor Shapiro’s concerns about affordability and remains focused on keeping customer bills as low as possible while continuing to invest in safe and reliable service.”
The rising costs led Shapiro to launch a new watchdog to scrutinize utility profits.
But critics argue that many of the state commissions that are supposed to oversee these utilities have been effectively captured. The revolving door between regulators and utility companies means that today’s watchdog can become tomorrow’s utility executive, and vice versa.
At the same time, utility companies are often permitted to contribute money to the campaigns of officials involved in overseeing them. The result is regulatory capture, with the system increasingly serving the interests of the companies rather than the ratepayers it was designed to protect.
That’s why the industry’s response to virtually every challenge sounds so familiar. Need to strengthen the grid against storms? More spending. Need to accommodate renewable energy? More spending. Need to support artificial intelligence data centers? More spending. Need to improve reliability? More spending. And systems rarely reform themselves when the people involved are benefiting from the status quo.
Most Americans don’t understand the mechanics of rate bases, transmission planning or regulatory capture. They don’t need to. What they understand is that their bills keep rising. They understand that every year seems to bring a new explanation for why prices have to go up again.
For much of the 20th century, utilities were largely run by engineers. Their mission was straightforward: keep the lights on. Today, the system is run by financial engineers focused on returns on their investments.
Allison Detzel contributed.
Ali Velshi is the host of “Velshi,” which airs Saturdays and Sundays on MSNBC. He has been awarded the National Headliner Award for Business & Consumer Reporting for “How the Wheels Came Off,” a special on the near collapse of the American auto industry. His work on disabled workers and Chicago’s red-light camera scandal in 2016 earned him two News and Documentary Emmy Award nominations, adding to a nomination in 2010 for his terrorism coverage.
Amel Ahmed
Amel Ahmed is a Segment Producer for “Velshi.”
