Utilities charge their customers fees for lobbying, branding and executive perks

As state lawmakers prepare for their 2025 legislative sessions, they have a clear opportunity to curb the common practice of monopolistic utilities of charging their customers unreasonable and unnecessary expenses, according to a new report from the Energy and Policy Institute.

The report includes real-world examples that show how the nation’s major private utilities have routinely attempted—and often successfully—to bill their customers for problematic expenses ranging from staff lobbying and sophisticated corporate advertising to private jet flights and Wellness offers were enough. The report also describes policy solutions to protect utility customers from incurring such costs.

With utility rate increases steadily increasing, it is critical to prevent utilities from charging customers for these costs. In 2023, state energy regulators nationwide approved $9.7 billion in net electricity rate increases – more than double the $4.4 billion in rate increases they approved the previous year, according to the U.S. Energy Information Administration. This trend threatens to push more households into poverty and force them to choose between keeping the lights on or paying for other basic needs such as food and medicine. In the 12 months leading up to November 2024, adults in about a quarter of households reported being unable to pay an energy bill at some point in the previous year, U.S. Census data shows.

As utility bills rise, most customers assume that these ever-increasing costs at least fund safe and reliable energy supplies – and not the lobbying efforts of utility companies, the corporate branding of these monopoly corporations, and even the luxury lifestyle costs of utility executives, board members and employees. In some states, lawmakers and regulators have taken steps to ensure that this is the case.

Colorado, Connecticut and Maine have each passed bills in recent years that would ban utilities from billing their customers for political activities and certain other expenses. Eleven states have introduced similar measures, several of which are expected to resurface in the coming legislative session.

Where these laws have been implemented, they are already having a measurable impact on customers. In Colorado, Xcel Energy gas customers save $775,000 annually that they otherwise would have had to spend on the utility’s political expenses. More refunds may be in the works after state utility regulators said Xcel’s lobbying disclosures were inadequate and asked that they be resubmitted. Likewise, Avangrid gas customers in Connecticut will save over $555,000 annually as the new utility accountability law prohibits reimbursement for industry membership dues, travel and subsistence expenses of utility board members and investor relations.

In states that have not yet taken legislative action, the prevailing method of defending against improper customer fees is cumbersome and imperfect. It relies on consumer advocates and regulatory agency staff to sift through thousands of pages of government documents and reports, identify potentially problematic expenditures and then challenge them – often facing resistance from the utility. Far from being a foolproof way to protect customers from incurring unreasonable costs, it actually exacerbates the risk that utility bills will include at least some of these costs.

But as the report shows, it doesn’t have to be that way. Instead, by providing a new examination of the scale and scope of the problem and a set of actionable policy solutions, the report shows that it is possible today to rein in utilities and reduce costs and risks for utility customers.

Download the entire report as (.pdf) here.