'Corporate greed at its worst': Utility giants report $14 billion in profits while millions of families struggle

'Corporate greed at its worst': Utility giants report $14 billion in profits while millions of families struggle
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Economy

With colder winter weather looming, a new analysis released Tuesday shows that the nine largest energy utility companies in the U.S. raked in nearly $14 billion in combined profits during the first three quarters of this year—and dished out roughly $11 billion to their wealthy shareholders—as tens of millions of U.S. households struggled to pay their utility bills due to soaring costs.

The watchdog group Accountable.US found that NextEra Energy, Duke Energy, Southern Company, Dominion Energy, Constellation Energy, Eversource Energy, Entergy Corporation, DTE Energy, and CMS Energy Corporation brought in $13.8 billion in the first nine months of this fiscal year. The firms, the nine largest in the U.S. by market capitalization, returned over $11.2 billion to shareholders during that period in the form of dividends and stock buybacks.

The utility giants' massive profits have come at a cost to U.S. households, roughly 20 million of which are behind on their utility payments as providers continue to raise rates across the U.S., pushing home energy costs to unaffordable levels and prompting warnings of a "tsunami of shutoffs."

The Center for Biological Diversity recently estimated that utilities have shut off households' power 440,000 times across 15 states that have made their rates publicly available, a large increase from last year.

"Well-heeled utility company CEOs are holding consumers' feet to the fire with exorbitant energy prices," Liz Zelnick, director of Accountable.US' Economic Security and Corporate Power program, said in a statement Tuesday. "Not because they have to, judging by their own high profits and generous giveaways to wealthy investors—but because they can with colder weather on the horizon."

"To prey on families who use a necessary service with unreasonable and unjustified rate hikes is corporate greed at its worst," Zelnick added.

The Accountable.US analysis shows that the same large utility companies raking in huge profits and paying their executives massive compensation packages are driving price increases nationwide.

Southern Company's Georgia subsidiary, for instance, "had a near-12% rate hike approved in June 2022—and in August 2022, its Tennessee subsidiary was granted a rate hike that would result in typical monthly home heating bills rising by about 25%," the analysis notes.

NBC Newsreported in October that "nationwide, investor-owned utilities have requested rate increases amounting to nearly $12 billion from the beginning of the year through the end of August."

Zelnick argued that utility giants' price hikes are part of a broader trend of corporate price-gouging, a practice that companies frequently excuse by pointing to higher overall inflation throughout the economy.

"Like so many other industries during the pandemic, utility companies have chased higher and higher profits and enriched investors rather than keep prices stable for working families," said Zelnick. "While the economy is seeing signs of slowing inflation, it is clear corporate greed continues to be a primary driver of high costs on everything from groceries to heating bills—a problem that won't be solved by the Fed's one-track-minded policy of excessive interest rate hikes that threaten millions of jobs."

Utility firms' greedy behavior throughout the coronavirus pandemic has drawn the attention of progressive lawmakers such as Reps. Cori Bush (D-Mo.), Rashida Tlaib (D-Mich.), and Jamaal Bowman (D-N.Y.), who in September introduced a resolution that would recognize access to utilities such as electricity and heating as a basic human right.

The Resolution Recognizing the Human Rights to Utilities has not yet received a vote.

"Utilities are the foundation we build our lives upon," Tlaib said in a statement upon introduction of the measure. "In the richest country the world has ever known, it is an outrage that millions of Americans struggle with utility insecurity, substandard and dangerous services, and inhumane shutoffs."

"It's time to change the conversation around what we all deserve, take the profit motive out of providing the basics of a good life, and give every American the opportunity to thrive," Tlaib added.

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