The total profit-related share of customer bills — net income plus income taxes — is higher than the figures reported here. Utilities collect enough revenue to cover both their income tax liability and their return to shareholders, meaning customers fund both. This metric does not isolate the electric portion of revenue in cases where utilities report consolidated electric and gas operations. This ratio, net income as a share of revenue, is our primary metric throughout this report. We reported utilities that merged, sold, or otherwise changed ownership with as much data as was available during the time-period reviewed. Where a 10-K did not have the required data, we used data from the utility’s Form 1 filing to the Federal Energy Regulatory Commission.
However, it is unclear if this includes a “Load Ramp Period.” In some cases, the minimum term begins only after a “Load Ramp Period,” which is a few https://pankisi.info/if-you-read-one-article-about-read-this-one-19/ years where the customer gradually increases their demand to reach the contracted size. An example from the higher end of this trend is Kentucky Power’s recently approved Tariff Industrial General Service, which sets a 20-year minimum contract term for all new loads of 150 MW or more. Across the 65 tariffs reviewed, large load tariffs feature minimum term lengths ranging from 1 to 20 years, and longer term lengths have become more common in recent proposals, shown in Exhibit 2.
These utilities wield significant market and political power, making regulation necessary to prevent unjust or unreasonable energy costs, poor service quality, and inadequate infrastructure investments. Utility regulation is particularly crucial for investor-owned utilities that operate as monopolies. Every state designates a Public Utility Commissions (PUC), sometimes called Public Service Commissions (PSC) or other titles, to oversee public utilities. By increasing access to clean, affordable energy solutions like solar power, we can lower energy bills, ease financial burdens, and cultivate a new approach to our energy system that empowers families and communities. Low-income households are particularly vulnerable to what is known as energy burden—the percentage of a household’s income that is spent on utility bills.
Three in four concerned their gas, electricity utility bills will increase this year
Once data centers come online, they can also affect local air quality. In an emailed statement, a Meta spokesperson says the company is working to “mitigate impacts to the community” by building new roads to divert truck traffic, conducting a traffic study, and collaborating with contractors and the local police department. Hyperscale data center facilities take years to build, and the construction phase can take a toll on community members’ daily lives. The system’s two major reservoirs—Lake Powell and Lake Mead—have fallen from roughly 90 percent capacity in 2000 to around 30 percent today. Phoenix draws 40 percent of its water from the Colorado River.
- A November 2025 nationally representative survey (PDF) of 2,146 U.S. adults by Consumer Reports found that 78 percent of Americans are somewhat or very concerned that the new data centers being built across the country will make their energy bills go up.
- These higher generation costs are passed on to consumers through higher monthly energy bills.
- Despite their significant power, most people don’t know much about PUCs or how they operate.
- While reforms are underway in a range of states, certain key IRA incentives have a time horizon, requiring prompt action within the next few years.
- According to a recent analysis from NEADA, household utility debt has risen from $17.5 billion at the end of 2023 to $23 billion as of June 30, 2025, an increase of 31 percent.
Five common large load tariff terms designed to protect ratepayers
And a Heatmap Pro review of public records from January 2026 revealed that at least 25 projects were canceled last year in response to local objections. But individual communities have started vocally pushing back against many projects—with increasing success. And in November 2025, two business school professors published research finding “no clear evidence that data centers stimulate local growth in tech employment.” However, consumer advocates say the practice leaves residents in the dark about looming construction projects that will have long-lasting community impacts.
“Communities across the country believe that the communities most impacted by data centers must lead conversations about their implementation. When a utility expands its system in anticipation of growing consumer demand, ratepayers share the costs of that expansion based on the premise that society benefits from growing electricity use. Customers also pay a return each year on the remaining unpaid portion of that investment, so over time the total amount paid for an asset typically exceeds what it originally cost to build.
Reducing the need for system expansion by harnessing flexibility, refining cost allocation methods to reflect the benefits ratepayers receive, and aligning grid planning to optimize investments are complementary strategies. When paired with other protections, capacity reassignment can support large loads to adjust to changing business needs, conditions, and innovations, including those in efficiency and flexibility. Some of the large load tariffs reviewed reduce or waive exit fees when the departing customer finds a successor, creating an incentive to line up replacements. Allow customers to reassign or reduce up to 20 percent of their contracted capacity without penalty under certain notice and term conditions.
Confronting and addressing rising energy bills linked to data centers
Across the utilities examined in this report, the median profit margin between 2021 and 2024 was 12.9 percent. The results show that utilities consistently retain a substantial share of the revenue they collect from customers as profit, and that these profit levels have risen in recent years. The analysis examined financial disclosures from 110 investor-owned electric utilities between 2021 and 2024, as well as 2025 filings available for 79 utilities that had reported results in time to be included in this report. The cumulative profit extracted from customers across a utility’s entire infrastructure portfolio, year after year, is what makes the profit https://goodmanner.info/2019/07/11/short-course-on-experts-what-you-need-to-know/ share of the electric bill so consequential.
For instance, the energy infrastructure reinvestment (EIR) program, which includes $250 billion in loans for reducing fossil infrastructure debt and reinvesting in communities, will sunset in 2026. While reforms are underway in a range of states, certain key IRA incentives have a time horizon, requiring prompt action within the next few years. Utilities’ antiquated business models can significantly limit their ability to deliver these benefits for their customers.
Portable methane gas turbines, for example, power Elon Musk’s xAI Colossus 1 and 2 facilities in Memphis, Tenn., affecting communities already overburdened by pollution. According to a recent Kapor Foundation report, 82 percent of California data centers are located in communities already facing poor air quality. Vehicular accidents in the rural area where Meta is building its Hyperion campus jumped by more than 600 percent in the first nine months of 2025 over the previous year, according to an analysis of police records published in November 2025 by Louisiana Illuminator, a local news outlet. That’s an 870 percent increase—and it’s nearly twice the water needed to supply a city the size of Flagstaff. A November 2025 nationally representative survey (PDF) of 2,146 U.S. adults by Consumer Reports found that 78 percent of Americans are somewhat or very concerned that the new data centers being built across the country will make their energy bills go up. According to a Bloomberg News analysis, data centers accounted for almost 40 percent of the state’s total consumption in 2024.
The Trump administration’s recent announcement of a Ratepayer Protection Pledge has shined additional light on the issue, leading to calls for data center operators to cover all energy costs linked to their facilities. Yet there is rising concern about data centers among national, state, and local leaders—as well as the people who live near them—regarding the pressures they place on the country’s grid and electricity costs. The tariffs and agreements generally ensure that utilities can recover their costs, including a rate of return, from the infrastructure they own and operate to serve new large loads. The report found that trends in the nationwide average were heavily influenced by large rate increases in specific areas, as seen in the visual.