If utility returns are falling, the story of rising bills has to be about supply
Victoria Shinder2 min readGuy Caruso, a retired administrator of the US Energy Information Administration, used an opinion piece this week to push back on a now-common framing: that rising electricity bills are chiefly a story of utility greed. His argument is empirical rather than rhetorical. Allowed utility returns have been trending downward, he writes, which is awkward for a narrative that blames bills on utilities extracting ever more profit. If the people selling the power are earning less on each dollar of capital, the pressure on the bill is coming from somewhere else.
That "somewhere else" is the part worth taking seriously, whatever one makes of the politics around it. The cost of delivered electricity is the sum of generation, transmission, distribution and the fuel and capacity that back them up — and the fastest-moving term in that sum right now is demand. Data centres, electrified transport and heat, and reshored manufacturing are all pulling load upward at once, into a system that cannot add generation or wires as quickly as it can add consumption. When demand outruns supply, price is the mechanism that clears the gap. That is not a moral failing of any particular company; it is what a shortage does.
The honest reading of Caruso's piece is not that utilities are blameless — monopoly returns deserve scrutiny precisely because they are set by regulators, not markets — but that "greed" is a weak explanation for a trend that is moving the wrong way for the greed story. A country can regulate utility profit to zero and still watch bills climb if it has not built enough supply to meet the load it is adding. The affordability debate keeps reaching for a villain because a villain is easier to legislate against than a construction queue. The uncomfortable answer is that the lever that actually moves the bill is the one nobody can pull quickly: more generation, more transmission, and the permitting and capital to build both. Everything else is an argument about how to divide a cost that supply decides.