Your electricity bill rose 40% while utility CEO pay rose 47% – now, voters are taking it to the ballot boxes – Image for illustrative purposes only (Image credits: Pixabay)
Families nationwide struggled last year to manage electricity bills that jumped 40% since 2021, forcing tough choices between power and other essentials.[1][2] Utility companies disconnected service to millions amid mounting arrears, while their chief executives pocketed a record $626 million in 2025 compensation alone.[3] This growing imbalance has spurred voters and lawmakers to pursue reforms through ballot initiatives and legislation, aiming to shift more costs away from everyday customers.
Executive Pay Reaches New Heights
Investor-owned utilities disbursed $626 million to their top executives in 2025, marking a 16% increase from the previous year.[3] Across 50 major electric and gas companies, plus the Tennessee Valley Authority, the average CEO compensation hit $12.3 million. Since 2017, total payouts to these leaders exceeded $5.2 billion, with average pay rising 47% – well ahead of 31% inflation and 38% wage growth over the same period.[3]
Twenty-seven CEOs received raises topping $1 million. American Electric Power’s Bill Fehrman led with $36.6 million, followed by Southern Company’s Chris Womack at $28.2 million and NextEra Energy’s John Ketchum at $24.2 million.[3] Much of this pay linked to performance metrics favoring shareholders, such as return on equity, where higher customer charges directly boosted bonuses.
Customers Bear the Brunt of Rate Hikes
Residential electricity prices rose more than 7% from February 2025 to February 2026, surpassing inflation rates.[1] Over a longer stretch since 2021, costs climbed 40% on average, coinciding with utilities posting net incomes over $200 billion from 2021 to 2024 and profit margins reaching 14.6% in 2025.[3] Regulators approved a record $31 billion in rate increases in 2025, impacting 81 million customers.[4]
Service disruptions underscored the human toll. Utilities like American Electric Power disconnected 173,000 customers in Ohio, while Pacific Gas & Electric cut off 196,501 in California and Consolidated Edison over 190,000 in New York.[3] Average overdue bills swelled from $597 to $789 since 2022, leaving many households vulnerable during extreme weather.
States and Voters Mobilize for Change
Public outcry prompted targeted responses. In Los Angeles, supporters gathered signatures for the Overpaid CEO Tax ordinance, a November 2026 ballot measure to tax companies where CEOs earn 50 to 100 times typical employee pay.[2] Lawmakers in Maryland enacted a cap in April 2026, limiting ratepayer recovery of executive salaries to 110% of the Public Service Commission chair’s pay, around $230,000.[5][3]
Minnesota advanced a similar bill tying recoverable executive pay to the governor’s $200,000 salary.[2] Other states followed suit: Colorado regulators barred certain corporate costs, including salaries, from customer bills, while Connecticut, New Hampshire, and Maine passed comparable limits.[5] At the federal level, bipartisan legislation sought to ban bonuses for executives during rate hikes.
Key State Actions:
- Maryland: Cap at 110% of PSC chair salary (~$230,000).
- Minnesota: Limit to governor’s salary ($200,000).
- Los Angeles: Ballot tax on excessive CEO-to-worker ratios.
- Colorado: Blocked salary pass-throughs to customers.
Incentives Under Scrutiny
Critics pointed to structural issues, like return on equity programs that rewarded executives for extracting higher revenues from ratepayers.[1] Utilities shifted focus from environmental goals and customer service to profitability, even as disconnections rose and satisfaction metrics faltered. Perks such as private jets – charged to customers in cases like Duke Energy’s $5 million tab in Indiana – added fuel to the debate.[3]
“In 2025, rising utility bills became a defining national issue – first an energy story, then an economic one, and now a political one,” noted Charles Hua, executive director of PowerLines.[4] Utilities defended the packages as necessary for talent retention, with much tied to performance and funded by shareholders. For more details, see the Energy and Policy Institute report.[3]
As data centers and grid upgrades drive future demands, these reforms could reshape how utilities balance shareholder gains with household affordability. Customers, regulators, and voters alike watch closely, determined that essential services remain within reach for working families.
