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Last month, protesters angry over high electricity costs disrupted a Las Vegas conference of executives for the nation's biggest investor-owned utilities — a vivid example of growing public outrage that has forced the industry to again defend their legally guaranteed profit margins.
As affordability concerns increase political pressure, several states have taken steps to lower utilities’ return on equity, either through regulatory or legislative action. Consumer advocates say these measures are long overdue, while utilities say suppressing their ROE could impact their credit rating, which would carry over into higher customer costs.
It is possible the combination of how vital electricity has become in the 21st century and its rising cost in the 2020s could lead to a turning point at this moment in the acceptable level of utility profits, experts told Utility Dive.
In a potentially pivotal and soon-to-be-decided Maryland rate case, utility executives said the matter should be left to state regulators, while consumer advocates said regulators should lower the utility’s profits closer to its costs for serving its customers.
