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Author:Maria McCoy    Published: 8/14/ 2024     ILRS

For this episode of the Local Energy Rules Podcast, host John Farrell summarizes ILSR’s recent report, Upcharge: Hidden Costs of Electric Utility Monopoly Power. The report details the true costs of the current utility model – to communities, the climate, and our democracy – and makes the case for breaking up the private monopoly, restoring competition to most of the electricity system, and removing the natural monopoly of electricity distribution from profit-seeking hands.

Listen to the full episode and explore more resources below — including a transcript and summary of the episode.

A Century-Old Model Prevents Progress

Farrell begins with a brief history of investor-owned electric utilities and why they were granted monopolies. Though there are efficiencies to building just one electric distribution system, private utilities wanted insulation from competition — be that from other private companies or publicly-owned utilities. In exchange, monopoly utilities are subject to state and federal regulation, but utilities still find ways to boost profits at the expense of their customers.

From The Great Depression to recent bribery schemes, utilities exercise their market power to boost profits and ultimately cause harm. Investor-owned utilities make money by building expensive power plants. They are also gatekeepers of the grid and make it harder for competitors to connect clean, distributed energy projects. Farrell lists many ways that, despite the rules and regulations, utilities thwart competition.

“There are just a multitude of ways in which utilities have acted and will continue to act in opposition to our climate and clean energy goals unless we wrestle with the fundamental market structure problems.”

Antitrust Enforcement, Restructuring, and Repairing Harms

Despite all of this evidence of utilities behaving badly, utilities cannot be held accountable for their anti-competitive behavior because of the state action immunity doctrine. Farrell makes the argument that antitrust enforcement against utility companies must be restored.

Beyond improving utility regulation, Farrell argues that we must restructure the grid and create an independent grid operator. The charge of the grid operator would be to protect the public interest, rather than squash competition. Lastly, the restructured grid should prioritize dismantling fossil fuel infrastructure that is causing harm and prioritize reinvestment in communities that have been harmed the most.

“Given the history that has led to these monopoly private companies controlling our public resource, given the market power they exercise, given the political power they exercise, how do we actually solve the problem and create a utility system that is aligned with the public interest? And my argument in Upcharge is that this is a structural problem and it requires restructuring.”

Episode Notes

See these resources for more behind the story:

For concrete examples of how towns and cities can take action toward gaining more control over their clean energy future, explore ILSR’s Community Power Toolkit.

Explore local and state policies and programs that help advance clean energy goals across the country using ILSR’s interactive Community Power Map.


This is the 216th episode of Local Energy Rules, an ILSR podcast with Energy Democracy Director John Farrell, which shares stories of communities taking on concentrated power to transform the energy system.

Local Energy Rules is produced by ILSR’s John Farrell and Maria McCoy. Audio engineering by Drew Birschbach.