For years, American households have been watching their electrical bills gradually tick higher. As it turns out, the chief executives of the country’s largest investor-owned utilities were doing the same thing while looking at their paychecks.
Last year, 51 electrical and gas utility companies in the U.S. paid their CEOs a collective $626 million, according to an analysis published last week by the Energy and Policy Institute, a watchdog organization. It’s a nearly $100 million increase from 2024, when 54 utility companies were reviewed. Between 2017 and 2025, CEOs of electric and gas companies received a total of $5.2 billion in compensation, including major providers such as Pacific Gas & Electric, Entergy, and Con Edison.
The review comes as lawmakers begin to question utility leaders after years of consecutive price hikes. Consumers have also grown aggrieved, as a series of recent polls and reports suggest that surging energy costs are quickly coalescing into a chief affordability concern for Americans around the country.
Last year, utilities requested a record-high $31 billion in rate hikes, more than double the increases from 2024, according to a January report by the nonprofit organization PowerLines, a series of hikes that would affect 81 million Americans. Between 2021 and 2025, electricity prices surged by 40% on average, the report found.
A spokesperson with Pacific Gas & Electric, whose CEO Patricia Poppe received a 25.2% pay increase last year, told Fortune: “We set compensation at levels to attract and retain the best talent, but if they don’t deliver, that’s reflected in their pay,” adding that the majority of executive compensation was determined by performance and “paid for by shareholders, not by customers.”
A Con Edison spokesperson told Fortune that its executive compensation is designed to “attract and retain the leadership required to operate one of the most complex energy systems in the world,” adding: “The majority of executive compensation is performance-based and paid by shareholders. It is tied to metrics that matter, including safety, system reliability, and customer experience.”
Entergy did not immediately reply to Fortune’s requests for comment.
Rising costs and surging profits
There are some 3,000 electric utilities in the U.S. Most individual utility companies are either small, government-run operations or not-for-profit co-operatives that primarily serve rural areas. But the vast majority of Americans—around 250 million people, or three-quarters of the country—are served by investor-owned utilities, also known as IOUs.
IOUs are large companies with shareholders that must abide by strict government regulations but are allowed to profit from providing power to households. While IOUs in most cases own all of the energy generation and transmission infrastructure they use, they act as regulated monopolies, meaning they do not have unilateral control over rates. IOUs have to make a case for rate increases based on their costs and target profits, and then submit a rate increase request to government commissions.
Advocates of IOUs say that profit-driven incentives help maximize efficiency, spur innovation, and improve infrastructure, while the need to go through government channels for any rate increase helps protect consumers.
But in recent years, spiking utility rates have occurred in tandem with soaring profits for the companies involved. Another analysis by the Energy and Policy Institute, published last month, found that total profits at 110 IOUs soared from around $39 billion in 2021 to more than $52 billion in 2024. The report found that over that period, utilities kept an average of 12.8% of revenue as profit, while preliminary 2025 data suggested margins increased to an average of 14.6%.
The CEOs of these companies have seen handsome pay raises over that period, too. The institute’s latest report found that CEO pay at IOUs last year, on average, rose almost 16% relative to 2024.
‘Electricity is the new eggs’
Fatter profit margins are likely only one of the reasons behind rising utility prices. Electricity demand has surged in recent years, in part due to the data center construction boom across the country, which Goldman Sachs expects to account for 40% of all electricity demand growth in the U.S. for the rest of the decade. Some evidence points to rising utility prices due to increased competition, particularly for households living in areas with higher concentrations of data centers.
But utility prices have been rising steadily since 2021, years before the AI infrastructure boom kicked off. One reason is the enormous capital costs utility companies have been saddled with in recent years.
The Edison Electric Institute, a trade association representing IOUs, reported last year that over the past decade its members invested $1.3 trillion in grid enhancements and projected spending of $1.1 trillion between 2025 and 2029 on additional infrastructure upgrades. Part of that will cover the costs of providing more electricity for data centers, but a large chunk is expected to go towards modernizing an aging grid system, with costs being passed on in part to consumers.
Regardless of the reason, households are growing frustrated with rising utility costs, and some are feeling the financial pinch. A report last year by the left-leaning Century Foundation found that since 2022, the average overdue utility bill balance has risen from $597 to $789. An Ipsos poll last year found that four in five Americans said they felt “powerless” about their rising utility fees. The pressure could turn into a political pain point too, according to Charles Hua, PowerLines’ executive director.
“In 2025, rising utility bills became a defining national issue—first an energy story, then an economic one, and now a political one. Electricity is the new eggs,” he said in a statement accompanying the January report.
With midterms looming, lawmakers have acted accordingly. Last month, a Michigan Senate committee heard testimony on a bill that would limit the amount of rate increases companies can request during a three-year period. In New York, blame for utility bills has been at the center of testy exchanges between state Democrats and Republicans. This week, Pennsylvania Gov. Josh Shapiro submitted a letter to utility companies active in his state announcing his intention to crack down on future rate increases.
