As Americans struggle with the cost of living, state utility consumer advocates are on the front lines of complex regulatory battles that decide what people pay for power and heating.
Unsung, scrappy and operating on shoestring budgets, these small state offices and nonprofits vary by name, size and the scope, but they share a universal reality: They’ve always been underdogs facing off with multibillion-dollar utilities.
“Underresourced is an understatement,” said David Lapp, head of Maryland’s Office of People’s Counsel. Lapp runs an office of about 30 advocates on an annual budget of about $8 million. That’s less than Exelon, the largest utility holding company in Maryland, generated in net income in a day.
The David vs. Goliath nature of the work of utility consumer advocates isn’t new. But eye-popping demand projections driven by AI data centers with city-size thirsts for power have raised the stakes for their work.
The Edison Electric Institute, the lobby for investor-owned electric utilities, said its members invested $1.3 trillion in grid infrastructure over the last decade. The group estimates those same companies will nearly match that pace of investment — $1.1 trillion — over the next five. Those costs are ultimately recovered from consumers, who also already faced rising costs for utilities, groceries other essentials.
“The utilities have dollar signs in their eyes, and they want to build all the resources and grow rate base,” said David Springe, executive director of the National Association of State Utility Consumer Advocates. “Not that we’re against growth, I think we’re just very concerned about the level of capital expenditure.”
The data center boom’s contribution to rising levels of peak power demand and higher wholesale prices is generating public and media attention around energy affordability. But utilities are also spending more to replace decades-old transmission and distribution lines, and they’re spending money to rebuild in areas hard hit by extreme storms in recent years.
“We can’t take it anymore,” Indiana Gov. Mike Braun (R) said in a news release announcing a new consumer advocate. He tasked the state’s new ratepayer advocate with evaluating utility profits and said he wants company shareholders to “bear more of the cost of doing business.”
Braun’s choice to lead the Indiana Office of Utility Consumer Counselor, Abby Gray, declined to be interviewed.
While elected officials are feeling the political heat from rising utility bills in places like Indiana, some ratepayer advocates have gotten political blowback from being too critical of utilities.
The budget for the Office of the Ohio Consumers’ Counsel is less today than it was in 2011 when then-Gov. John Kasich (R) and lawmakers slashed funding by almost half. Ohio’s chief consumer advocate at the time, Janine Migden-Ostrander, resigned in protest.
Today, Migden-Ostrander, a fellow at Pace University Law School, says the importance of ensuring consumer advocates have adequate funding to do their jobs can’t be overstated.
“The impacts on bills are negligible, but the return to customers in terms of the giving the consumer advocates the resources to reduce rate base and to protect customers is pretty high,” she said.
All but a handful of states have dedicated consumer advocate offices that do the dirty work of scrutinizing thousands of pages of complex rate filings, filing expert testimony, and taking on the country’s largest utilities in court-like proceedings that decide utility rates.
Many of the offices were created by state legislatures during the energy crisis of the 1970s. It was at the start of a two-decade surge in electricity demand growth. Power demand flattened out in the mid-2000s. Today, growth is back and on a scale that couldn’t have been imagined even a few years ago.
Lapp, Maryland’s public counsel, said the AI-driven boom is outpacing the ability of systems meant to protect the interest of consumers.
“Our regulatory system is really not built for data centers,” Lapp said. “It’s built on gradual growth and electricity demand spread out uniformly.”
‘Couch-cushion money’
The data center industry insists it’s willing and capable of fully funding the massive grid upgrades necessary to accommodate the growth. Utilities in many states have gotten approval for specific tariffs or rates that aim to ensure consumers aren’t on the hook for grid upgrades if data center projects fall through.
Lapp and others maintain consumers, especially in the mid-Atlantic, are already being forced to pay more than they should. And the trend will continue absent reforms, according to Joseph Bowring, the independent market monitor for PJM Interconnection, the region’s grid operator.
“Large data center load additions have already had a significant impact and will have additional significant impacts on other customers as a result of higher transmission costs, higher energy market prices and higher capacity,” Bowring said in his most recent quarterly report.
Many state utility consumer advocates have legislative mandates to participate in state regulatory proceedings that affect rates for electric or natural gas service. But often big decisions that affect consumer costs are made elsewhere — by the courts, by state lawmakers or in Congress. The Federal Energy Regulatory Commission weighs in on issues tied to power prices. Rules set by grid operators like PJM also dictate what people pay for electricity.
It’s a lot to keep tabs on for offices with slim budgets and that can’t pay lawyers and other staffers what they’d make working for utilities or even at utility commissions.
Ohio’s Consumer Counselor (OCC) has a staff of about 35 people and a $6.7 million annual budget. It regularly squares off with some of the nation’s largest utilities — Columbus, Ohio-based AEP, Duke Energy and FirstEnergy — that have seemingly unlimited budgets to press their agendas.
“I call us the little engine that could,” said Maureen Willis, who leads the Ohio office. The office solely represents residential customers.
The OCC is funded not by taxpayers but through an assessment on utility bills — 3 cents for every $100 paid. She estimates they’ve saved Ohio consumers $1 billion over the last five years through the office’s advocacy work.
It’s the same story in southeast Wisconsin, where hyperscale data centers have sprouted over the past 18 months. Wisconsin has no public advocate designated to represent the interest of utility consumers. Instead, it’s the nonprofit Citizens Utility Board (CUB). It is among a handful of states with so-called CUB offices, an idea that grew out of a 1974 recommendation by noted consumer watchdog Ralph Nader.
While other CUB states including Illinois, Oregon and Minnesota also have state offices that represent utility consumers in regulatory and legal proceedings, Wisconsin does not.
Authorized by the state’s General Assembly in 1979 to keep watch over monopoly utilities, CUB Wisconsin has a staff of six and runs on a budget of about $1 million — about a penny from each investor-owned utility electric and gas bill. It’s less than big Wisconsin utilities pay top executives.
Tom Content, the group’s executive director, said CUB was already stretched just trying to keep pace with utility cases at the state Public Service Commission before the data center developers landed. The rush of requests to build new grid infrastructure to serve Microsoft and other tech companies has only added to the workload.
Microsoft is building what it calls the world’s most powerful AI data center south of Milwaukee. OpenAI and Oracle’s Stargate venture is partnering with developer Vantage Data Centers on a $15 billion data center in Port Washington, a half hour north of Milwaukee and other large data centers are in various stages of development.
The state’s largest utility We Energies already received regulatory approval this year to build two new natural gas plants at a cost of $1.5 billion to help meet data center demand at the same time it plans to shutter existing coal-fired power plants.
This month, the Milwaukee-based utility announced a proposal to add another 3 gigawatts of generating capacity to meet projected demand growth. Wisconsin-based ATC, a transmission-only utility, already has approval for a $600 million high-voltage line needed to serve the Microsoft projects. And it is proposing another $1.4 billion project to support the Stargate data center.
Wisconsin CUB and other state utility consumer advocates hope policymakers will recognize the value they bring in guarding consumer interests, especially as political pressure ramps on elected officials ramps up.
Regardless, Content and his peers know it they’ll continue to be vastly outstaffed and outspent in their efforts to keep rates as low as possible. The only question is by how much.
“Even if customers in Wisconsin were paying one dime out on a typical monthly bill,” Content said, it’s “couch-cushion money. And the fact that we’re only investing couch-cushion money in consumer advocacy, that’s concerning here and across the country.”
