The January 2026 issue of Harper’s Magazine includes a comprehensive article about how utility rates are set by state regulating bodies such as the MO Public Service Commission and how those commissions are influenced by the profit driven goals of utilities. Unfortunately, none of this is news to Consumers Council, but those of you who are interested may want to learn more.
The article’s author observes that:
- “Utilities answer to shareholders, yet they provide essential services.”
- Nearly 100 years ago, Franklin Delano Roosevelt pointed out the “selfish greed” of utilities which had “found ways of paying to themselves inordinate and unreasonable profits.”
- The greater the utility’s Return on Equity, the more attractive a utility looks to investors (Missouri investor-owned utilities currently earn at least a 9% ROE).
- Utilities make more money by building new infrastructure than repairing existing infrastructure. “They benefit from building things that don’t need to be built.”
- Public Service Commissioners (the regulators of utilities) routinely pass through a revolving door into the private sector, often after issuing decisions advantaging the utilities they are charged with regulating.
