John Oliver Explains Why Your Electric Bill Is So Damn High
John Oliver began his main story by addressing one of his favorite subjects: weird mascots. This time it was Reddy Kilowatt, a character made of electrical outlets, lightbulbs, and bolts of electricity who for decades told people that the energy industry has their best interests at heart.
Turns out, Reddy is a liar.
Oliver provided several examples of utility companies all over the country fleecing customers — it was clear his staff didn’t have to look all that hard to find them — but he began with one of the most notorious utilities: Pacific Gas & Electric. The San Francisco–based company provides power to much of Northern California, and they do a terrible job of it. Over the years they’ve been fined almost $3 billion for various offenses. In 2018, a 97-year-old hook on woefully neglected electric lines failed, sparking a wildfire that burned down an entire town and killed 85 people, making it the deadliest and most destructive fire in the state’s history. In fact, as Oliver pointed out, between 2014 and 2017 PG&E’s failing infrastructure was responsible for, on average, more than one fire per day.
“At that point,” Oliver said, “PG&E are less a utility, and more a fire company that occasionally also delivers power to people’s homes.”
Whatever it is they do, they make a lot of money doing it. Between 2013 and 2018, PG&E issued more than $5 billion in dividends to shareholders.
So how do utility companies get away with their shit? In the early part of the 20th Century, the U.S. was faced with the daunting task of creating electric infrastructure from scratch. In order to get this done, the government promised regional companies that if they built the infrastructure, they would enjoy a monopoly when supplying power with it. In many cases those monopolies still exist today.
Utilities are now often publicly traded, for-profit companies, meaning their No. 1 goal is not to provide affordable, dependable power, but to make their investors richer. So anything that costs them money is something they are heavily incentivized not to do.
“Clearly this isn’t a system where you, the customer, are going to be prioritized,” Oliver said. “If anything, the model only makes sense if the company’s shareholders are viewed as the customers — and your bills are the product.”
Yes, there are government regulations. But as is the case with so many laws that supposedly prevent the rich from destroying the world in order to enrich themselves more, those regulations contain some big loopholes. Oliver explained that utilities are allowed to raise prices on consumers to not only offset any costs the utilities incur from building infrastructure, but to profit from it as well. Which is why, for instance, South Carolinians have paid $2 billion in higher energy prices (so far) in order to fund a nuclear power plant project that never actually came online due to incompetence and fraud. Or why utility companies fight solar power however they can.
Building more power plants makes shareholders money. Replacing 97-year-old hooks does not.
“Our utility system largely consists of for-profit companies with monopolies over an essential service, building as much shit as they possibly can as they can pass the cost along to you on your electric bill.”
Shortly after Oliver summed up the twisted system that (usually) keeps your lights on, he welcomed a demonic Reddy Kilowatt to the studio. The mascot promptly electrocuted the host and, apparently, killed him. RIP, John!
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