PA Governor Shapiro Calls Out 20th Century Utility Business Model

Gov. Shapiro to utilities: ‘The 20th century utility model is broken’

Shapiro said his administration will oppose rate case requests that don’t observe certain best practices for affordability.

Lisa Martine Jenkins

May 1, 2026

 

Photo credit: Maxim Elramsisy / Shutterstock

Pennsylvania Gov. Josh Shapiro is fed up with his state’s utilities — and seemingly the entire investor-owned utility profit model — and this week sent them a remarkable letter challenging the entire premise of how they make money.

“As I’ve expressed publicly and privately, I believe the 20th century utility model is broken,” he wrote. “We can no longer simply prioritize corporate profitability to drive infrastructure development.”

 

Pennsylvania, which is part of the country’s largest energy market, is at the center of a nationwide conversation about load growth and who will have to pay for the infrastructure to meet it. PJM is grappling with a huge influx of data centers and other large loads, and there’s evidence that the new demand is translating directly to higher rates for customers.  

 

In Shapiro’s letter, there’s the strong implication that utilities are taking advantage of this load growth to earn even more in profits. He wrote that in 2025, 13 utilities operating in the state requested $975 million in increases — but that “those very same utilities had earned a total of $1.4 billion in profits in 2024.” Meanwhile, PECO Energy in March sought a $429 million rate hike, which would increase its subsidiary Exelon’s revenue by 11%. 

 

Research from PowerLines found that utilities nationwide are gearing up to spend even more in the coming years: $1.4 trillion over the next five years across 51 investor-owned utilities, more than 20% higher than last year’s estimate. 

Shapiro echoed his own February budget address, wherein he said Pennsylvania customers should not have to “pay a single dollar more” for a “safe and reliable utility system.” He said his administration is prepared to support utilities to raise the money to modernize their systems, both with new technologies and with tools to make the most of the existing grid — but also encouraged utilities to procure that capital in more affordable ways so as not to burden ratepayers. 

 

“Rising utility bills have themselves become drivers of inflation,” Shapiro wrote to his state’s utility leaders. “While there are many factors affecting those increases, several core causes are directly within your control and result from your policy and fiscal decisions, including the excessive rate requests several utilities have sought in recent years.” 

 

He recommended three practices that the state of Pennsylvania plans to use to evaluate rate case proposals, and 

1. Raise cost-effective capital, with lower-cost debt representing a majority of a utility’s ratemaking capital structure, over more expensive equity. Shapiro specifically encouraged utilities to apply to the Department of Energy for loans. 
2. “Explain in plain, clear language” why a proposed investment is necessary either for the grid’s reliability or safety, or else for the customer’s benefit. 
3. “Transparent, justifiable equity returns” for utilities based on a benchmark arrived at via a public process — or in extraordinary circumstances, pegged to the Federal Reserve estimates of the stock market as a whole — rather than settlements that are challenging for the public to parse.

 

Pennsylvania utilities that want the Shapiro administration’s support for future rate cases will now be required to submit documentation of their compliance with these new practices to the “Special Counsel for Energy Affordability” alongside their filings. Shapiro added that his administration “will vocally and forcefully oppose rate case requests from utilities that fail to adhere” to these.

 

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This new process would represent a significant departure from the way that IOUs typically do business: propose a cost of capital to be invested in the rate base (namely, in new infrastructure), then work with public utility commissions to determine a reasonable return that they can both finance and sell politically. As Rob Glen, who advises companies working on the energy transition and the grid, noted on LinkedIn, “it is not a market outcome—it is a regulatory one.”

 

But in an era where “electricity is the new price of eggs,” that political sell has been harder to make. And therefore Shapiro is proposing that markets truly drive the cost of equity. Glen described the third of these benchmarks, of “reverse-auctioning a portion of utility equity,” as its most disruptive element; it would essentially allow true competition between investors to inform the return rather than behind-closed-door negotiations alone. 

 

If Shapiro’s administration is able to pull off what he’s proposing — and especially if other states take up the same practices —  it could have a dramatic impact on how utilities set rates. And for Shapiro, that potential for sea change seems to be the point: “We have reached a tipping point,” Shapiro wrote, “and this is a moment to put your customers first and change the behaviors causing rate increases.”

 

Lisa Martine Jenkins

Lisa Martine Jenkins is Latitude Media's editor. She was previously a reporter for Protocol, and her work has appeared in Heatmap, The Guardian, The Associated Press, and Civil Eats, among others.

$1 Billion boondoggle; Votgle Nuclear Folly

The billion-dollar boondoggle: how Vogtle became the US’s monument to nuclear folly

by Paul Hockenos
29 Apr 2026

 

In the quiet scrubland of Waynesboro, Georgia, two enormous concrete domes rise from the landscape. Vogtle Units 3 and 4, the first new nuclear reactors built in the US in more than 30 years, were once touted as the rebirth of US American nuclear ambition. Instead, they have become a monument to mismanagement and cost overruns – conclusive evidence that nuclear power is a nonstarter. Paul Hockenos reports.

 

Credits Denton Rumsey | Shutterstock, all rights reserved.

 

The story of Vogtle is a cautionary tale illustrating that nuclear power cannot be delivered cheaply, quickly and reliably in democratic societies with up-to-scratch regulatory systems. Time and again, from South Korea’s reactors at Shin Kori and Shin Wolsong to Finland’s Olkiluoto-3 and France’s Flamanville EPR, on-the-ground experience has proven otherwise. Vogtle belongs squarely in that lineage, but with a uniquely US American twist: the financial burden has been shifted almost entirely onto the backs of ordinary consumers.

 

A promise of renaissance

The Georgia Public Service Commission approved the project in 2009: two Westinghouse AP1000 reactors, at a cost of USD 14 billion in total, online by 2016 and 2017. Clean, reliable emissions-free baseload power – an answer to climate change that didn’t depend on fickle solar output or fossil gas.

 

But by the time the reactors finally limped into commercial service – Unit 3 in July 2023 and Unit 4 in April 2024 – the price tag had swollen to more than USD 36.8 billion, cementing Vogtle’s place as the most expensive power plant ever built in human history. Not even the notorious cost spirals of European nuclear megaprojects come close: Finland’s Olkiluoto-3 ballooned to €11 billion, meaning that Vogtle surpassed that threefold.

 

This is not simply a cost overrun but rather a systemic indictment of the nuclear construction model: slow, labour intensive, technologically rigid and utterly incompatible with modern energy economics.

 

Ratepayers foot the bill

The primary victims of this financial misadventure are Georgia Power’s 2.7 million customers, many of whom were compelled to subsidize the reactors long before they produced a single kilowatt-hour of electricity. Thanks to a legislative instrument called Construction Work in Progress, households were effectively forced to act as involuntary venture capitalists, paying roughly USD 1,000 per household in advance charges.

 

Georgia Power collected USD 17 billion in profits during the construction period, while shareholder losses were capped at around USD 3 billion. Ratepayers, meanwhile, will carry billions in future costs for decades. This is why they pay the highest power bills in the US.

 

Now that the reactors are online, the financial pressure has only intensified. Residential electricity rates have jumped roughly 24 per cent, with new hikes expected. Analysts estimate that electricity from the new units is five times more expensive than equivalent capacity from solar plus battery storage – an astonishing figure in a region with some of the best solar potential in the US.

 

A cascade of failures

To understand how Vogtle spiralled into a USD-22-billion cost-overrun fiasco, one must examine the full sequence of missteps – a textbook example of how nuclear megaprojects fail globally.

 

One of the most consequential errors occurred before construction even began. Westinghouse launched the project without a completed reactor design, a mistake so fundamental it borders on negligence. This error echoed Europe’s nuclear struggles at Olkiluoto and Flamanville, where partially completed designs led to cascading construction problems. In 2017, Westinghouse – burdened by the Vogtle AP1000 debacle – filed for bankruptcy.

 

That collapse forced Vogtle’s owners to take over the direct management of the project, a role for which they were ill-prepared. What followed was a sprawling mess of renegotiated contracts and design revisions. Independent monitors documented that Georgia Power repeatedly provided ‘materially inaccurate cost estimates’, undermining any possibility of regulatory oversight. Nevertheless, the Public Service Commission allowed construction to continue and rejected its own staff’s recommendations to cancel the project – decisions that are costing Georgians billions.

 

Then came the workforce crisis. Because the US had not built a nuclear reactor in decades, the skilled labour pipeline had atrophied. Vogtle thus became a crash-course training ground for thousands of inexperienced workers. Attrition among electricians reached 50 per cent. Component failure rates hit 80 per cent at times, necessitating extensive and costly do-overs.

 

The result is damning: a project lost in its own complexity, burdened by the weight of an entire industry that had forgotten how to build what it claimed to champion.

 

What Georgia could have had instead

What makes Vogtle’s story especially tragic is not merely what Georgians must now pay, but what they could have had. The nearly USD 37 billion could have financed a diversified portfolio of renewable energy: solar farms, battery storage and energy efficiency upgrades that would have delivered more capacity at lower cost and in far less time.

 

Renewable energy has evolved into something antithetical to nuclear power: decentralized, modular and increasingly affordable systems that can be scaled rapidly without the all-or-nothing risks of nuclear megaprojects. Just about everywhere in the world, solar and wind are being installed in record volumes precisely because they are nimble, predictable and financially transparent. Nuclear, by contrast, requires vast upfront capital, long construction timelines and political intervention to remain viable.

 

Georgia, with its abundant sunshine and growing distributed-energy ecosystem, could have led the US South into a new era of affordable clean power. Instead, its utility regulators locked the state into a nuclear future that its customers regret.

 

The lessons of Vogtle

Vogtle Units 3 and 4 were marketed as a blueprint for America’s nuclear future. In reality, they have demonstrated that the economics of traditional nuclear construction in the US are fundamentally broken. Not broken at the margins, but broken at the core – structurally, financially and technologically.

 

This project, like so many others, depended not on engineering brilliance but on regulatory leniency, optimistic accounting and public subsidy. Its failures are not the product of unfortunate circumstance, but of a model that no longer fits the realities of modern energy infrastructure.

 

The legacy of Vogtle is thus a warning to policymakers, regulators and utility executives: nuclear power, in its large-scale conventional form, cannot compete in the contemporary energy economy – not on cost, not on time and not without burdening the very people it claims to serve.

 

For ratepayers, Vogtle is a generational misfortune. For the nuclear industry, it is another nail in the coffin of the ‘renaissance’ that never arrives. And for everyone concerned about climate change, it is a reminder that the clean energy transition cannot afford fantasies, wishful thinking or vanity megaprojects.

 

One would think the lessons of Vogtle incontrovertible. But in May 2024, the Biden administration’s energy secretary Jennifer Granholm attended a ribbon-cutting ceremony for the recently connected units. Her conclusions were very different: she predicted that 198 more such large-scale reactors will join the Vogtle units, which she considered a success story.

 

What Georgia has built is not a triumph of American ingenuity but rather a fraud that should speak the final word on nuclear power in the US.

 

The views and opinions in this article do not necessarily reflect those of the Heinrich-Böll-Stiftung European Union | Global Dialogue.

 

by Paul Hockenos

 

Paul Hockenos is a Berlin-based journalist and author of Berlin Calling: A Story of Anarchy, Music, the Wall and the Birth of the New Berlin.