Under Pennsylvania law, utility rates are supposed to be fair for consumers, while also allowing shareholder-owned, for-profit utilities an opportunity to recover costs and earn reasonable returns on their system upgrades. These same companies enjoy protection from competition by the law, which grants them, in effect, a territorial monopoly. However, for decades, investor-owned utilities have been wrongly permitted to earn returns far above their actual financing costs, even as families and small businesses struggle with rapidly rising bills.

According to a January 2025 report by the American Economic Liberties Project, inflated returns on equity have become a primary driver of rate increases nationwide, costing consumers billions while providing no corresponding improvement in service reliability or resilience. Furthermore, the report estimates that "Over the last three years, investor-owned residential electricity rates have increased 49% more than inflation. In contrast, their publicly owned counterparts have increased 44% less than inflation."

The report concludes that the most effective way to protect ratepayers is to codify a clear guideline: rate of return must equal demonstrated cost of capital. Excessive rates of return have been the root of every major issue in the utility industry, and it’s time we take action to change the status quo, tackle the affordability crisis, and prioritize the interests of consumers.

Therefore, I will be introducing legislation to adopt this recommendation and establish a transparent, evidence-based standard that aligns utility profits with actual economic risk. By restoring balance to our ratemaking process, we can prevent unjustified rate hikes, strengthen affordability, and ensure that ratepayer dollars serve the public interest—not the pockets of big corporations.

I invite you to join me in sponsoring legislation that will restore fairness, put people before profits, and help ensure that residents and small businesses are charged fairly for their energy use.