A growing number of congressional Democrats have a new political villain in the fight over rising energy bills: electric utilities.
For years, Democrats focused much of their political fire on the fossil fuel industry, tying oil and gas companies to volatile gasoline prices. But as electricity bills become a more visible household expense, utilities — and their executives — are attracting more attention.
While utilities have long been regulated and challenged at the state level, Democrats in Congress are increasingly signaling they want a role in reshaping how the industry operates.
“We have to change the system. … There is an immediate need right now for folks to be able to survive from one day to the next,” said Rep. Josh Riley (D-N.Y.) during an interview. “People cannot afford to wait for this place to get its act together.”
Riley has criticized utility rate increases and inserted himself into state-level fights over consumer costs. On Capitol Hill, he’s created a Congressional Lowering Utility Bills Caucus with 17 members from around the country.
Rep. Chris Deluzio (D-Pa.), a member of the group, said, “I’m proud to be a part of this new Lowering Utility Bills Caucus that is going to take on the profiteering monopolies screwing us over, work to get more power onto the grid, and fight to make life in America less of a ripoff.”
Riley’s constituents have seen their bills more than double from utility New York State Electric and Gas since 2019. And in Deluzio’s Pennsylvania, regulators last year announced they would adjust energy supply prices electric utilities they oversee, raising rates in Deluzio’s district by 10.8 percent.
Democrats in key positions of power are taking note of utilities. Rep. Kathy Castor (D-Fla.), ranking member of the Energy and Commerce Subcommittee on Energy, used a recent hearing to focus on how the current system of utility regulation often favors expensive new generation projects over cheaper upgrades.
“We really have to get grid-enhancing technologies onto the grid, but the incentives for utilities are so misaligned for the moment we’re in,” Castor said.
Senate Minority Leader Chuck Schumer’s (D-N.Y.) energy talking points for the midterm elections center on increasing renewable energy generation and reviving tax credits for wind and solar. They also talk of “enforceable consumer protections” to address electricity prices.
Return on equity focus
At the center of the new Democratic push is a wonky but powerful feature of the utility business model: a built-in incentive for utilities to spend — and earn — more money.
Investor-owned utilities are regulated monopolies. Because customers typically cannot choose another provider, state regulators set the rates utilities can charge and determine how much profit they are allowed to earn.
Critics argue the system creates a powerful incentive for companies to build expensive infrastructure projects — whether a major transmission line, a new power plant or other large capital investments — because the more they spend, the greater the return they can collect from customers.
Democrats have begun focusing on utilities’ return on equity (ROE) — the profit margin regulators allow investor-owned utilities to earn on those investments. Critics argue current ROEs are set too high.
Pennsylvania Gov. Josh Shapiro (D) recently sent a letter to the state’s electric, gas and water utilities arguing for a more market-based ROE that factors in competitive bidding and could result in more cautious spending.
On the Hill, Riley and Progressive Caucus Chair Greg Casar (D-Texas) recently introduced the “Lowering Utility Bills Act,” H.R. 8568, with around 20 other Democrats aboard.
It would require the Federal Energy Regulatory Commission to set a “zone of reasonableness” for utility ROEs based on expected U.S. equity market returns over the next decade — a formula supporters say would better align utility profits with broader financial markets.
“This bill is saying all of those calculations that you’re doing for that return on equity, those have got to be thrown out the window and you need to think about this in terms of what’s a fair return, not the price gouging that’s happening now,” Riley said.
Utilities reject the criticism, arguing that regulators already carefully scrutinize their returns and that healthy ROEs are necessary to attract investors and fund grid upgrades, reliability improvements and new generation.
They also point to an increasingly tough job to keep a reliable grid running, including growing wildfire risk, aging infrastructure and a surge in electricity demand driven by artificial intelligence.
“Our members operate the most important machine in the country — the electric grid — and if it doesn’t work, America doesn’t work,” said Drew Maloney, president of the Edison Electric Institute, which represents investor-owned utilities, in a statement. “That means we have a responsibility to continuously invest so the system that families and businesses rely on performs.”
New Big Oil?
The rhetoric about utilities can resemble comments the left has been making about oil and gas companies, which can make record profits when prices skyrocket.
“These utility companies have the gall to say they have to raise your electric rates because they have to pay for private jet rides or for business class flights to France, or for country club memberships or for their political donations,” Casar said during a recent press conference.
The Center for American Progress, the left-leaning think tank, is pushing a proposal for Congress to pay states to freeze or lower electricity rates. It’s part of Maine progressive Senate candidate Graham Platner’s energy plan.
On Monday, a range of Democrats said they would be scrutinizing a planned merger between NextEra Energy and Dominion Energy to make sure the $67 billion deal doesn’t hurt ratepayers.
“You have people focusing on their utility bills as a front-line political issue for the first time in years, and they’re pointing the finger at people they had never really paid attention to before,” said Alex Jacquez, chief of policy and advocacy at progressive think tank Groundwork Collaborative and an economic policy aide in the Biden White House.
Concern over rising utility bills is resonating beyond Democratic circles. Late last year, Riley introduced H.R. 6590 with Rep. Jeff Van Drew (R-N.J.) to block utility company executives from getting a bonus if they raised rates for customers at a pace higher than inflation.
Indiana Gov. Mike Braun (R) signed legislation that changes how the state approves utility rates by tying some decisions more closely to performance metrics.
“There is a growing concern around rising utility bills that are correlated with and coinciding with a period of utility profits going up and utility stocks generally performing quite well,” said Charles Hua, founder and executive director of nonprofit group PowerLines, which is focused on lowering utility bills.
Even with the increased attention on utilities and other players like data centers when discussing affordability, Democrats are channeling most of their ire at the president ahead of the midterm elections.
Sen. Martin Heinrich (D-N.M.), ranking member of the Senate Energy and Natural Resources Committee, said Democrats should be most focused on the Trump administration’s actions to stifle renewable energy. It’s the party’s answer to Republicans attacking Democrats in the past for wanting to move away from fossil fuels.
“Sure, hold utilities feet to the fire. Hold them accountable,” Heinrich said about energy prices. “But the real cause is President [Donald] Trump’s war on clean energy.”
