US utility profits are facing unprecedented scrutiny as electricity bills surge 15% since 2025. Governors in over a dozen states are intervening to restrain earnings, with Indiana’s Mike Braun firing a regulator and Delaware’s Matt Meyer confronting Delmarva Power. Lawmakers in 15 states have introduced measures to limit returns, while regulators are cutting requested rate increases by larger margins.

In 2025, commissions trimmed a median of 78–85 basis points from utility return requests, compared to 40–60 previously. Profits at US electric utilities rose 16% to a record $63.1bn last year, according to the Edison Electric Institute. The return on equity (ROE) is central to regulation, determining how much profit utilities can earn on approved investments.

Critics argue high ROEs incentivize excessive infrastructure spending. Maryland’s commission recently cut Pepco’s ROE by 10 basis points, praised by Governor Wes Moore. The pressure reflects a political shift, with Charles Hua of Powerlines noting a “new era” where politicians must engage in technical utility regulation.

Utilities are investing record sums to meet data center demand and upgrade aging grids, but affordability concerns are forcing regulators to balance infrastructure needs with consumer protection.