Across America, customers are paying sharply higher electricity bills while the executives running the nation's largest utilities awarded themselves substantial pay increases last year. The gap between soaring consumer costs and executive compensation has widened dramatically, raising questions about who bears the burden of the energy sector's operations.
Chief executives at 38 of the top 51 U.S. utility companies received raises in 2025, collectively pocketing an additional $82 million. The average CEO compensation jumped 16 percent to $12.3 million annually, according to a new analysis by the Energy and Policy Institute, an industry watchdog that reviewed company financial documents.
The timing stings consumers. Utility bills have climbed as much as 40 percent in some regions since 2021. Electricity costs specifically jumped 6.7 percent between 2024 and 2025. Last year, power companies shut off service to customers 13 million times nationwide, federal data shows.
American Electric Power's Bill Ferhman received the largest raise, seeing his compensation package spike by $23 million, or 176 percent, to $36.6 million. Yet his company cut power to customers 173,000 times. ConEdison's Tim Cawley's pay jumped 33 percent, adding $4.9 million to bring his total to roughly $20 million. Southern Company's Chris Womack collected an 18 percent increase, gaining $4.3 million to reach $28 million.
Some executives cashed in despite failing to meet basic performance targets. CenterPoint Energy CEO Jason Wells received a $2.6 million raise even though the company fell short on reliability standards for customers experiencing frequent outages. Xcel Energy's Bob Frenzel collected his maximum customer satisfaction bonus in Minnesota after the company apparently changed the evaluation threshold, the report found. His overall compensation climbed $3.1 million, or 23 percent.
The perks extended beyond base salary. Executives enjoyed private jets, condominiums, and other amenities that customers effectively paid for through their bills. DTE Energy customers in Detroit and surrounding Michigan communities funded vacation access to company condominiums for both outgoing CEO Jerry Norcia, who received $14 million, and his replacement, Joi Harris, compensated nearly $7 million. Customers even covered Norcia's full salary despite his not leading the company the entire year.
Over the past eight years, utility CEO compensation has risen 47 percent on average, far outpacing inflation and typical worker raises. Customers paid more than $5 billion collectively to compensate the executives examined in the report during that period.
The structure of utility regulation enables this dynamic. Most utilities operate as regulated monopolies, meaning customers cannot switch providers. State utility commissions, typically run by political appointees, oversee rate increases and executive compensation. These commissions have often been viewed as industry-friendly, offering little meaningful oversight of CEO packages.
Utility executives justify the raises as performance incentives tied to shareholder profits and five-year targets. ConEdison said executive pay is designed to attract leadership capable of operating complex energy systems and delivering reliability. American Electric Power emphasized that compensation structures align leadership with customer and shareholder interests. Southern Company called its program performance-based and tied to delivering clean, safe, reliable energy.
But watchdog researchers argue the system has fundamentally broken down. The Energy and Policy Institute found that many utilities have actually cut incentives tied to customer service, reliability, affordability, and sustainability while expanding those tied purely to profits. "They're lowering the bar for customer outcomes. It's essentially being replaced with 'Are we making more profits?'" said Jonathan Kim, research associate with the institute.
Michigan, where DTE Energy and Consumers Energy serve millions, exemplifies the crisis. The state had the highest utility disconnection rate in the Midwest in 2024, yet executives continued receiving substantial raises and perks. Consumers Energy CEO Garett Rochow failed to meet performance standards for customer experience and worker safety but still saw his pay increase by $132,000.
Some jurisdictions are beginning to respond. Michigan Attorney General Dana Nessel successfully blocked DTE from passing private jet costs to customers. Maryland recently capped what utilities can pay CEOs at 110 percent of the state public utility commission chair's salary. Minnesota considered similar legislation, though it stalled. Michigan officials have discussed comparable measures.
Author James Rodriguez: "It's the fundamental contradiction that defines modern utilities: executives make more when profits rise, but profits rise fastest when costs to customers climb and service cuts deepen."
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