Greedy Utilities Pass Climate Costs on to Customers: Here’s How to Stop Them

Outages and Adaptation Costs Will Make Electricity Inaccessible

Much of the nation’s grid is already old and declining in reliability. Climate change will make matters worse. According to one study, the annual economic impacts of climate change on the grid could reach $24 billion in 2090—and that’s not even accounting for floods, hurricanes, or ice storms. Much of these costs could be passed onto us through rate hikes.

In addition to adaptation costs, extreme weather is causing more service outages that cut off families’ access to electricity. And by mid-century, service outages could cost customers $1.5 to $3.4 trillion.

Moreover, the same extreme weather that causes these outages makes electricity needs even more dire—like heatwaves, for instance. The consequences of this have been dangerous, even fatal. In Louisiana, power outages following Hurricane Ida contributed to at least 21 heat-related deaths.

Climate Disasters Wreak Havoc on Our Power Infrastructure

Disasters like flooding, winter storms, and hurricanes will also exacerbate these problems. They can damage electricity infrastructure, causing more service outages and raising costs as utilities scramble to adapt and repair.

For example, climate change is worsening the intensity of winter storms, which are damaging power infrastructure more and more. In 2020, Maine saw 12 weather-related service outages—though it had never had more than five per year up to 2018.

To the South, storms are exacting huge costs in adaptations to power infrastructure. Following destructive hurricanes, Florida Power & Light spent $3 billion on storm hardening from 2006 to 2017. Considering average household electricity use in the state, Florida Power & Light’s storm hardening efforts may cost customers an additional $140 in 2025.

Fossil-fueled energy is dangerous and unsustainable. It not only contributes to the climate crisis—it is less resilient to climate disasters.

Just this month, Hurricane Beryl led to power outages for almost 3 million Texans. A week later, as the heat index soared toward triple digits, more than 200,000 homes and businesses in the Houston area still lacked power. Beryl arrived earlier in the year than any Category 5 hurricane on record, fueled by abnormally warm waters in the Atlantic Ocean.

Meanwhile, in the West, wildfires threaten infrastructure like above-ground transmission lines, causing insurance rates to soar. In Washington, insurance companies are charging some utilities million-dollar surcharges for wildfire risks. And utilities can pass these new costs directly onto customers.

Energy Companies Are Skimming Profits From Rate Hikes

We need more climate adaptation for our country’s power infrastructure. But the costs shouldn’t burden families that already must choose between electricity and other essentials—nor should they serve as cover for boosting utility profits.

Yet, that’s exactly what’s happening in many utilities across the country, including Florida’s TECO.

“With rate increases, energy bills have gone up to the benefit of those shareholders who invest in TECO’s Canadian mother company, Emera,” said Tampa-based Sierra Club organizer Walter L. Smith II. “Meanwhile, people in underserved frontline communities continue to suffer because of TECO’s bad practices that contribute to public health issues and economic strife. This devastation cannot go on.”

In Louisiana, electric company Entergy raised rates by $8 a month after destructive hurricanes caused billions of dollars in damages in 2020 and 2021. At the same time, it was doling out $1.5 billion in dividends to shareholders and gave its CEO a $4 million raise.

Last year, in California, the state Public Utilities Commission approved billions for system hardening for Pacific Gas & Electric and rate hikes to cover it. Now, Pacific is the most expensive power provider in the state, and monthly bills in 2024 may be as much as $50 higher than they were last year. At the same time, the company saw $2.2 billion in profits in 2023 and expects to rack up even more in 2024.

We Need Renewables for Reliable, Affordable Power

Fossil-fueled energy is dangerous and unsustainable. It not only contributes to the climate crisis—it is less resilient to climate disasters.

For example, in 2021, a winter freeze in Texas left 10 million people without electricity. Gas-powered systems neared collapse, partly because they couldn’t produce energy in the cold. During the crisis, all fuel sources underperformed—except solar.

Besides cutting off essential heat during winter storms, the crisis also slammed Texans in their wallets. The state’s Public Utilities Commission ordered maximum electricity prices of $9,000/MWh, leaving residents with jaw-dropping bills.

Without good policy, the costs of these overhauls will fall unfairly on families, making essential electricity increasingly out of reach.

Transitioning 100% away from fossil fuels to renewables is paramount to making energy affordable and accessible for all. It will keep the grid reliable and cut emissions, reducing the costs of climate change. One study found that adaptation and lowering emissions could each halve the estimated economic impacts on our power system by 2090. Fighting climate change and lowering energy bills go hand in hand.

“Any further investment into fossil fuels and gas for energy is a waste of money and a dire waste of time,” says Calista Snider, a Tampa resident, biologist, and member of the Hillsborough Affordable Energy Coalition. “New investments and infrastructure for fossil fuel energy will not only cost us our health and our planet; they have been proven to cost us more financially, as well.”

Nevertheless, corporations are still pouring resources into fossil fuels. TECO, for instance, is building a gas pipeline and converting a power station to run on gas.

That’s because building fossil power is much better for companies’ bottom lines than renewables, and that’s because, under the current system, they can recover more profits the more they spend on infrastructure. Under the status quo, utilities are disincentivized from making climate-saving changes, like energy efficiency and investing in renewables.

We’re Fighting for Affordable, Clean Energy

Nationwide, it’s clear that we need to overhaul our energy systems to reduce emissions and adapt to climate change. The price of inaction is high and only climbing as the climate crisis intensifies.

But without good policy, the costs of these overhauls will fall unfairly on families, making essential electricity increasingly out of reach. Meanwhile, power companies will continue profiting off rate hikes and expanding expensive, polluting infrastructure.

We can’t let this happen. In Florida, Food & Water Watch is working with the Hillsborough Affordable Energy Coalition and the statewide Clean Energy for All table. Together, we’re fighting to stop rate hikes and pass policy that makes utility companies do right by their customers, not their shareholders. That includes stopping fossil fuel expansion and prioritizing renewables and energy efficiency.

Without action like this across the country, the price of keeping the lights on will continue to rise. But we can change course and ensure clean, affordable energy for everyone.