Utility corporations have a tremendous amount of influence in the lives of almost everyone in the United States. They control people’s access to commodities and services – like electricity, water, and gas – that are an essential part of life. As described in our 2021 report Power Lines, utility corporations amass huge power and influence as they often operate as regulated monopolies over their region and sector. Utility corporations use this advantageous position to raise prices and extract profits from their captive customers. Utilities use this money to influence regulatory bodies and policy, spending millions of dollars on lobbying and political donations, buying seats at influential policy planning and cultural organizations and working to block, delay and water down governmental action to mitigate climate change. Yet, because of their ubiquitous presence, their operations can be almost invisible, fading into the background of the monthly rhythm of rent bills, mortgages, credit card statements, and student loan payments. The idea of challenging a utility corporation’s right to extract profits from providing basic essential services may never even occur to us.
However, because of the unique way that utility corporations operate – granted monopoly status in their service area by the government in exchange for tighter regulation on the amount of money they can make – organized communities can confront utility industry power every few years when a utility seeks permission from regulators to hike rates.
This process is called a rate case, and it takes the form of a quasi-judicial proceeding overseen by an administrative law judge who hears testimony from witnesses and reviews evidence before creating a plan prescribing how much profit a utility company can make and setting the rates that different types of customers must pay until the next rate case.
Rate cases can be confusing, highly technical procedures where well-resourced utility companies – with their access to hundreds of millions of dollars, high-priced attorneys, technical experts and captured regulators – have a significant advantage over grassroots activists. However, rate cases can also be opportunities for well-organized campaigners to challenge utility corporations on their own turf and win while building community power to advance a different, democratic model where essential services are operated for the benefit of the people and not corporate profit.
Across the United States, organized communities have stood up to utility corporations in rate cases and notched major wins. By intervening to challenge utility rate hike proposals, organizers have gotten regulators to reduce rate hikes by as much as 90%, forced utilities to invest in energy efficiency measures, and restricted utility corporations’ spending on political influence.
This report will discuss what a rate case is, describe the stakeholders involved, explain why it is critical for the general public to be involved, and outline how organized communities can intervene to counter utility power. While rate cases can be held for all types of utilities from electric, gas, water, and telecoms, this report will focus on electric utility rate cases.