Exposing the utility playbook: Ratepayers are stuck paying the bill for utility corruption
In 2020, Ohio House Speaker Larry Householder was arrested and subsequently resigned his speakership after an FBI investigation found that the influential lawmaker accepted $61 million dollars from electric utility FirstEnergy in exchange for passage of a nuclear bailout bill. The legislation sought to subsidize two of the company’s failing nuclear plants by charging Ohioans a monthly fee.
Another recent scandal in Illinois saw Michael Madigan, the longest serving state Speaker of the House in U.S. history, lose his position when the state’s largest utility, ComEd, confessed to giving jobs and contracts to Madigan associates for nearly a decade in an effort to sway legislation at the state capitol.
Sadly, stories like these are nothing new — and they aren’t surprising. We’ve long known that unregulated monopolies necessarily lead to higher costs, less efficiency and limited innovation. The very nature of our monopoly electric utility model leads to companies who are beholden to their shareholders — not their customers. To compound this issue, bad actors among monopoly companies expend unlimited time, money and resources on achieving regulatory capture. Regulatory capture occurs when the lawmakers and officials who are supposed to protect public interests and regulate these monopolies instead begin working to benefit those very same companies.
Ever since Edison fired up the first commercial power plant on Pearl Street in NYC in 1882, many have believed that building, operating and maintaining the electric grid and delivering power to families and businesses should be a vertically integrated industry under monopoly control. For over a century that sentiment was arguably true. After all, who needs dozens of companies running redundant power lines and infrastructure across the country from house to house in every town and city.