For Immediate Release: June 04, 2024
Media Contact: Reggie Rucker
“If we’re serious about making clean, local electricity available to everyone, everywhere, we can’t leave the utility company abuser in charge,” says John Farrell, the report’s author
[WASHINGTON, DC] – In the electricity sector, investor-owned utilities wield monopoly power rivaling that of Amazon to sabotage potential competitors, evade public accountability, and prioritize shareholder returns over customer service. Upcharge: Hidden Costs of Electric Utility Monopoly Power, a new report from the Institute for Local Self-Reliance (ILSR), delves deep into the problems associated with the 100-year-old business model granting private companies such exclusive power over the public resource of electricity — and calls for structural reforms to restore competition and equilibrium to the sector.
The report tallies the staggering costs imposed by private utilities. From accounting for 32% of the U.S.’s energy-related carbon emissions to causing 171,000 pollution-linked deaths per year to hiking electricity prices to record levels and triggering debilitating power shutoffs for low-income families, these private companies are responsible for many publicly borne burdens.
“Allowing private, monopoly power over an essential public resource invites abuse,” said John Farrell, author of the report, co-director of ILSR, and director of ILSR’s Energy Democracy Initiative. “And if we’re serious about making clean, local electricity available to everyone, everywhere, we can’t leave the utility company abuser in charge.”
Upcharge places utilities in the same platform monopoly league as Amazon and Google because they use their exclusive control over their industry’s infrastructure – the electricity distribution grid – to obstruct competition and favor their own business. Utilities all over the country have been found rigging bidding processes, slowing grid connections, and manipulating contract negotiations to stifle potential competitors. The report also chronicles how utilities use their control of consumer data to evade regulatory oversight and accountability.
Stacy Mitchell, antitrust expert, co-director of ILSR, and director of ILSR’s Independent Business Initiative, remarked, “Amazon and other Big Tech monopolists get a lot of deserved attention in the antitrust space, but electric utilities are at least as harmful within their own industry. Luckily, the solutions to both are similar.”
The report recommends state and federal policy changes to end the abusive monopoly utility model, noting that private utilities have already used revenue from their captive customers to build protective political influence. Upcharge argues that state and federal policymakers must work together to trust-bust utility companies and restore competition to as much of the electricity system as possible. For the natural monopoly of electricity distribution, the report prescribes a transition to non-profit, cooperative, or public entity control. Finally, the report notes that historic harms imposed upon communities of color and low-income customers must be addressed through prioritized access to financing and bill relief.
Download Upcharge here.
About the Institute for Local Self-Reliance
The Institute for Local Self-Reliance has a vision of thriving, equitable communities. We are a national research and advocacy organization that partners with allies across the country to build an American economy driven by local priorities and accountable to people and the planet.
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