A new report finds that roughly 13 cents of every dollar Pennsylvania electricity customers pay goes directly to corporate profit; and that share is rising.

The Energy and Policy Institute, a utility watchdog group, analyzed financial data from 110 investor-owned electric utilities nationwide between 2021 and 2024, including PPL Electric, which serves much of eastern and central Pennsylvania.

“For a customer paying a $200 monthly electric bill, that means roughly $30 went to corporate profits,” the report states.

In total, the utilities examined reported approximately $186 billion in profit over those four years.

Preliminary 2025 data suggests the trend is accelerating, with profit margins averaging 14.6 percent among utilities that had reported results at the time of the analysis — up from 12.8 percent over the prior four-year period.

Locally, PPL Electric operates within the PJM regional electricity market, where utilities average profit margins of about 11.8 percent, below the national average but still representing billions drawn annually from customer bills.

The findings come as Pennsylvania Gov. Josh Shapiro has pushed for greater scrutiny of utility profits, warning that current market structures could impose billions of dollars in additional costs on consumers, according to the report.

Why profits are built into your bill

Per the report, utilities like PPL operate as government-granted monopolies. Customers cannot choose another provider, and state regulators set the rates utilities charge. The rates are designed not just to cover operating costs, but to deliver a profit to shareholders.

That profit level is set through a formal process called a rate case, in which utilities file financial documents with state regulators making the case for how much revenue they need.

“In 2024, the average authorized return on equity for regulated U.S. utilities was 9.7%, while the average of 34 major investment firms’ long-term equity return forecasts for the broad U.S. market was 6.7%,” the report states.

Utilities, with their guaranteed customer base, are considered lower-risk investments than the broader market. That means their returns, the report argues, should be lower, not higher.

An analysis cited in the report estimated that excess returns cost customers approximately $50 billion per year, or roughly $300 per household annually.

While PPL and other PJM utilities fall below the national average, some utilities collect a far larger share of each customer dollar as profit.

The top utilities by average profit margin from 2021 to 2024 were MidAmerican Energy at 27.22 percent, Florida Power & Light at 23.51 percent and Nantucket Electric at 23.24 percent. Utilities in the Southeast, which operate without competition from regional electricity markets, averaged nearly 16 percent over the same period.

“The gap between Southeastern utilities and their counterparts in competitive markets is large enough to warrant scrutiny of whether vertically integrated monopolies operating outside of RTOs are consistently extracting more profit from captive customers than is necessary to provide safe and reliable electricity service,” the report states.

What could change it

The report outlines several steps regulators and lawmakers could take to reduce the profit share in customer bills, including lowering authorized returns on equity and strengthening consumer representation in rate proceedings.

Research cited in the report found that states with independent consumer advocates in utility rate proceedings authorized returns on equity nearly half a percentage point lower on average across more than 1,600 rate cases over nearly three decades.

“Utilities arrive with large legal and financial teams; residential customers rarely have equivalent representation without a funded advocate,” the report states.

The report also notes that about 30 percent of the nation’s electricity is sold by nonprofit utilities, mostly cooperatives or municipally owned systems, that collect no profit and typically charge lower rates.

“Profit levels are the product of policy decisions made by state utility commissions, typically in contested rate proceedings, using methodologies that have evolved over decades,” the report states. “That means they can be changed.”