Shift Key with Robinson Meyer and Jesse Jenkins Utility Regulation Really Sucks
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Sep 10, 2025 Electricity prices are soaring, mainly due to aging infrastructure and regulation issues. The U.S. can learn from international approaches to better control costs and improve utility management. The podcast unpacks the unique challenges of monopolistic utilities, the moral hazards in regulation, and the need for greater efficiency. It also touches on the importance of energy storage innovations and discusses global solar trends, particularly China’s massive installations and their impact on the market.
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Distribution Dominates Retail Bills
- About half of a typical U.S. electricity bill pays for the distribution grid: poles, wires, transformers and local delivery.
- Distribution (not long-distance transmission) is the largest and fastest-growing driver of retail electricity cost increases.
T&D Inflation Is Really Distribution Inflation
- Most of the recent T&D spending surge is concentrated in distribution: overhead poles, undergrounding, and transformers.
- Between 2019 and 2023 utility capital share going to distribution rose from ~37% to ~49%, per LBNL.
Restructuring Left Distribution As A Monopoly
- U.S. electricity restructuring disciplined generation but left distribution as a regulated monopoly.
- That regulatory carve-out preserved cost-plus incentives that still reward utilities for spending capital.