Pennsylvania Gov. Josh Shapiro has made clear that rising electricity costs are one of his top concerns — and he’s putting investor-owned utilities squarely in the spotlight. His administration has proposed increased scrutiny of monopoly utility profits, along with a broader effort to examine how those utilities contribute to higher bills for Pennsylvanians.

Investor-owned utilities, which manage the power lines, operate as regulated monopolies: customers don’t get to choose them, yet the utilities are guaranteed a rate of return on investments approved by regulators. The governor has pointed directly to this structure as a potential driver of rising costs, arguing that utilities may be earning more than is justified — and that those profits deserve deeper scrutiny.

“Our utility companies in Pennsylvania, well, they make billions of dollars every year. While at the same time, they’ve increased the cost for consumers with too little public accountability or transparency. That’s going to change,” Shapiro said during his annual budget address to a joint session of the General Assembly in early February.

This is a significant shift in tone. For years, discussions about affordability have focused primarily on wholesale power markets, retail suppliers, or external factors. Now, attention is turning to the transmission and distribution part of the electric bill — the portion customers cannot shop for. That shift is overdue.

Recent analysis helps explain why.

A new report from the Energy & Policy Institute found that profits accounted for 12.8% of the average customer’s electric bill over a four-year period — and that share is increasing. These findings should give policymakers pause.

Electric bills are often framed as the unavoidable cost of maintaining infrastructure and ensuring reliability. But when a growing share of those bills is tied directly to profits — not fuel, not generation, not transmission — it raises a fundamental question: Are customers paying more than necessary simply because they have no alternative?

The institute also developed a calculator that allows consumers to input their bill amount and the name of their utility to get an estimate of how much of their bill went to utility profits. For example, PPL Electric Utilities ranked first for profit margin among utilities in the Northeast and eighth in the nation, the report found.

For monopoly utilities, higher spending can translate into higher returns. That incentive structure is very different from what exists on the power supply part of electric bills. Suppliers operate in competitive markets and must continually prove their value to customers or risk losing them.

Pennsylvania has long been a national leader in electricity competition — and for good reason.

In this competitive power market, suppliers must earn customers’ business. Prices are disciplined by choice. Innovation is rewarded. Inefficiency is penalized.

None of that is true for monopoly distribution utilities. Customers cannot switch wires companies. They cannot opt out of rate increases tied to approved investments. And they cannot choose to pay less to the monopoly distribution utilities and transmission owners — even if those returns are rising.

At the end of the day, Pennsylvanians already have proof of what works. A competitive electricity market remains the strongest, most reliable tool we have to put consumers first and keep Pennsylvania’s energy future both affordable and responsive.