US utilities shut off power to millions amid record corporate profits – report | US News

A new analysis of industry data has found that some of America’s largest utilities have unplugged millions of struggling customers in recent years despite spending billions of dollars on share buybacks, dividend payments to shareholders and executive salaries.

The report also shows that companies could use just a tiny fraction of what they spend from investors and executives to write off debt for all households that have lost power.

The shutdowns are disproportionately affecting low-income and customers from communities of color, and the “staggering” situation is being driven by corporate profits, said Selah Goodson Bell, study co-author and energy justice activist at the Center For Biological Diversity.

A power outage often has devastating effects on a household, including in terms of health and safety. “Shutdowns allow utilities to punish the economic precariousness of customers while guaranteeing record profits and massive payouts for themselves and their investors,” the authors write in the report. It was put together with the Energy and Policy Institute, a utility industry analyst, and BailoutWatch.

In the 30 states where shutdown data was available, utilities disrupted service 1.5 million times in the first 10 months of 2022, and an estimated 4.2 million times statewide. The report also shows that the problem is getting worse: the number of power shutdowns increased by almost a third between 2021 and the first 10 months of 2022, and gas shutdowns by 76%.

Illinois saw the highest number of shutdowns during that period, at over 500,000, followed by Pennsylvania, Georgia, Michigan, and Ohio. Exelon Corp, the parent company of utility giants like Illinois-based ComEd and Pennsylvania-based Peco, reported 648,000 shutdowns. It was followed by The Southern Co, DTE Energy, Ameren and FirstEnergy.

Some of the companies that are likely to have the highest totals are not included. Between 2020 and 2021, Florida utilities shut off power 1.4 million times, a “staggering” number largely driven by NextEra’s Florida Light and Power Division. But Florida no longer requires utilities to track disruptions.

The report highlighted how little utility companies would have to cut in dividends, share buybacks and executive salaries to forgive customer debt. It examined financial records from 12 major utilities responsible for 86% of the shutdowns between January 2020 and October 2022.

On average, each spent about $4 billion on dividends, and customer debt from their combined 4.9 million shutdowns accounted for about 1% of their dividend spend.

“That was one of the data points that really hit the mark, because that’s just a small fraction of the amount of money that utilities are paying to shareholders that could really transform the lives of millions of homes,” Goodson Bell said.

FirstEnergy, which serves Maryland, Pennsylvania and Ohio, turned off power about 240,000 times for a total of about $25 million in customer debt. Meanwhile, the company paid $2.3 billion in dividends.

The 12 companies collectively paid approximately $1.2 billion to approximately 70 top executives, or approximately $5.9 million annually per executive.

NextEra, which has cut power the most times before it no longer needs to report data, is much more generous to its executives and shareholders. The company paid the highest average compensation per executive at $11.2 million and spent the second highest on dividends at $8.1 billion.

Rising gas and electricity prices are driving shutdowns in part, but so are regulatory decisions that allow companies to almost always pass on increased costs to customers. Utilities also continue to invest in capital-intensive projects that, in many cases, are good for their investors but not cost-effective for consumers who could benefit from community solar, rooftop solar, or other distributed energy sources.

As climate change brings about more extreme heat and cold, low-income customers who cannot afford the extra use of a stove or air conditioner will be put under more pressure.

The authors say addressing the situation would require uniform maintenance of federal registries, a halt to new fossil fuel investments and a ban on punitive accounting practices. States could tax utility gains to pay off customer debt, develop more effective debt relief programs, eliminate consumer debt, and develop an income-based payment plan.

But the clearest solution, Goodson Bell said, is a ban on shutdowns.

“Because we view energy as a human right and shutdowns are not something the utility industry needs to do to function financially, we call for a permanent ban,” he said.