Chief executives of America's leading utility companies received an average pay raise of 16% last year, pushing their compensation to $12.3 million, even as households grapple with soaring energy costs and frequent power disconnections, according to a new analysis of industry financial disclosures.
The review by the Energy and Policy Institute (EPI), an industry watchdog, found that utility bills have risen by as much as 40% in some regions since 2021. Nationwide, power companies shut off service to customers 13 million times in 2025, federal data shows.
Among the 51 top utilities examined, 38 CEOs enjoyed pay increases, collectively totalling $82 million. The report highlights that some executives received raises despite failing to meet performance benchmarks, including those related to outage management. Many also benefited from perks such as private jets and condominiums, often financed by customers.
“It feels unjust at face value,” said Jonathan Kim, EPI research associate and author of the report. “It’s the idea that we should be footing the bill for these people’s grotesquely large salaries.”
Utility prices remain a key driver of persistent inflation. Consumers paid between 6.7% more on electricity bills from 2024 to 2025. Since 2017, CEO compensation in the sector has surged 47% on average, outpacing both inflation and worker pay, the analysis noted. Customers of the utilities studied collectively contributed over $5 billion toward CEO compensation during that period.
Bill Fehrman, CEO of American Electric Power (AEP), received the largest pay hike, with his compensation package skyrocketing by $23 million—a 176% increase—to $36.6 million. This occurred even as the Ohio-based utility disconnected service 173,000 times. Tim Cawley of ConEd saw his pay rise by $4.9 million (33%) to about $20 million, while Southern Company’s Chris Womack received a $4.3 million (18%) boost to $28 million.
A ConEd spokesperson defended the compensation, stating: “Executive compensation is designed to attract and retain the leadership required to operate one of the most complex energy systems in the world, drive Con Edison’s nation-leading reliability and deliver on New York’s clean energy goals. The majority of executive compensation is performance based and paid by shareholders.”
Southern Company echoed this sentiment: “Our performance-based executive compensation program is directly tied to what matters most to our business—delivering clean, safe, reliable and affordable energy while running our business efficiently and keeping costs down.”
An AEP spokesperson noted that Fehrman’s compensation is largely tied to five-year performance targets, adding: “This compensation structure aligns leadership incentives with the long-term interests of customers, communities, and shareholders.”
Many CEOs received raises while simultaneously seeking rate hikes. John Ketchum of NextEra Energy, the third-highest-paid utility CEO in 2025 with a $24 million package, oversaw a subsidiary that requested a record $6.9 billion rate increase from Florida regulators.
The situation is partly rooted in the structure of the utility industry, where many companies operate as regulated monopolies. Customers often cannot choose an alternative provider and have limited avenues to hold companies accountable. State-level utility commissions, typically staffed by political appointees, are frequently perceived as industry-friendly.
While the direct impact of CEO pay on individual bills is modest, the compensation packages—comprising incentives, bonuses, stocks, and performance payments—are closely tied to profits and shareholder returns. With limited regulatory oversight, executives are incentivized to boost profits to please shareholders, who in turn reward them with bonuses.
“The justification for these huge bonuses and pay is that it’s an incentive to increase shareholder profits, and that’s at the core of everything here,” said Chris Gilmer-Hill, policy manager with the Michigan Environmental Justice Council, which frequently battles utilities in regulatory proceedings.
Kim noted that many utilities have reduced CEO incentives linked to customer service, reliability, affordability, and sustainability. Some executives received raises despite failing to meet reliability or customer satisfaction metrics. For instance, Jason Wells of CenterPoint Energy got a $2.6 million bump in 2025 even though he missed the reliability standard for customers experiencing four or more outages exceeding five minutes.
In Minnesota, Xcel CEO Bob Frenzel received a maximum bonus for customer satisfaction after apparently altering the threshold, the report claims. This occurred amid a surge in customer complaints that drew regulatory scrutiny in Colorado and Minnesota. His overall pay rose by $3.1 million (23%) last year.
“They’re lowering the bar for customer outcomes—it’s essentially being replaced with ‘Are we making more profits?’” Kim said. “People aren’t getting reliable customer service, and customers are not happy about it, but profits went up, so CEO pay also went up.”
Michigan exemplifies the broader issues. Customers of DTE Energy, serving Detroit and surrounding areas, funded a raise for outgoing CEO Jerry Norcia ($14 million) and his replacement Joi Harris (nearly $7 million). Norcia’s full salary was covered even though he did not lead the company for the entire year. DTE’s CEOs also receive sports and concert tickets and access to a company condominium.
“DTE seems to see exorbitant bonuses and CEO pay as an incentive to maximize profits, and they’re always going to have an incentive to funnel ratepayer money into maximizing profits however they can,” Gilmer-Hill said.
Consumers Energy, which shares service territory with DTE, saw its CEO Garett Rochow receive a $132,000 pay increase despite failing to meet performance standards for customer experience and worker safety.
New federal data shows Michigan had the highest utility disconnection rate in the Midwest in 2024, the latest year available.
Regulators and governments have taken some steps to curb executive pay. Michigan Attorney General Dana Nessel successfully opposed a DTE proposal to include executives’ private jet travel in rate increases in 2024. Maryland passed legislation protecting customers from paying CEOs more than 110% of the public utility commission chair’s salary. Similar proposals in Minnesota and Michigan have stalled.
“More policymakers are thinking about this,” Kim said.
