Do Customers of Northwest Investor-Owned Utilities have Higher Electricity Bills?

The Northwest has over 100 different utilities, many of them small publicly owned utilities. Investor-owned utilities are companies owned by investors that earn a profit for providing electricity to their customers. So as a customer of an investor-owned utility in the Northwest do you pay more?

The Energy Information Administration collects information each year from utilities in the United States. That information includes the amount of electricity utilities have sold, the number of residential customers, and the revenue collected from those customers. Using these data we can compare bills. From this comparison you can see there are public utilities with average household bills that are both higher and lower than the investor-owned utilities.

Figure 1 - Average residential bills of investor-owned versus public Northwest utilities

However, the rates of investor-owned utilities tend to be higher. So customers of investor-owned utilities tend to pay more per megawatt-hour, but they also tend to use less energy, thanks in part to investments in energy efficiency. Improved efficiency is closely aligned with slower growth in both average annual electricity use per customer and smaller increases in average annual bills per customer. Rates go up, but electricity bills don’t. 

Figure 2 - Residential rates of investor-owned versus public Northwest utilities

Check out more in-depth analysis on electricity bills in the Northwest — see the Council’s recently released draft report. We’re accepting public comments until August 29, 2016.