Utility bills nationwide are spiking, and Coloradans could see their Xcel bills increase by more than 50% within a few years. That has experts and politicians blaming data centers, natural gas prices, renewable energy, extreme weather and other factors for pushing up costs and saddling Americans with debt.
A new report suggests that profit-driven utility companies may be part of the problem.
The Energy and Policy Institute — a utility watchdog group — found that energy companies are earning steadily increasing profits even as their customers’ power bills surge.
The report analyzed financial documents from 110 investor-owned utilities, the for-profit companies that serve most Americans. That includes all of Xcel Energy’s operations in eight states, including Colorado.
The report found that utilities earned higher profits each year between 2021-2024, for total earnings of around $186 billion. Between 2021-2025, average residential electric bills shot up by nearly 40%, according to the U.S. Energy Information Administration.
The report did not include cooperatives and municipality-owned utilities, which are typically nonprofits.
Investor-owned utilities, on the other hand, function like monopolies — in exchange for being the sole power provider in an area, state officials set the rates they’re allowed to charge.
Those rates, in turn, determine how much profit the companies and their shareholders make.
That’s because when customers pay utility bills, they’re not just paying for the power they use. They’re paying for the cost of building infrastructure, like new poles and natural gas plants. They are also paying back shareholders for investing in the utility, with interest tacked on.
In other words, part of every customer electric bill ultimately flows to investors as profit.
Rising profits, rising bills
For every dollar utilities collected from customers between 2021-2024, they kept around 13 cents as profit, on average, according to the report. That “profit margin” — a measure of how much money a business retains after paying for all of its costs — has also been steadily increasing.
In general, the report found that utility profit margins are much higher than margins in other industries, like aviation, restaurants and car sales.
“That is money not to keep the lights on, not to build the grid, but just for the profit,” said Daniel Tait, an EPI research director. “That share is rising as bills have gone up.”
The report calculated that Xcel had a roughly 15% profit margin over the last few years. That means a customer with a $110 electric bill was paying around $17 for the company’s profit, according to the report’s online calculator.
Xcel reported record-breaking profits in 2025. Regulated utilities, of course, are allowed to make money. But the report questions whether their profit margins may be too high, given that utilities don’t have to fend off competition and are guaranteed by state regulators to earn money.
In a statement, Xcel Energy called the report significantly flawed, and stressed that most of its money goes toward investing and improving its gas and electric operations. Xcel said the report “paints an unreasonable picture of investor-owned utilities because the authors and supporters of this research fundamentally oppose for-profit companies.”
The company said that whatever money remains after paying for taxes, fees and infrastructure investments is only then paid out to shareholders.
Xcel also said that Colorado utility bills remain below the national average, which is true.
Regulations could bring down profits
Electricity rates are decided every few years by state public utility commissions. Last year, Xcel asked the Colorado PUC to allow it to raise its rates, to pay for things like new wind farms, wildfire mitigation and upgrading poles and wires.
Regulators, consumer advocates, environmentalists and Xcel lawyers are now duking out which of those expenses can be paid back through customer bills, and which expenses the company should cover with its own dollars.
Xcel’s request also includes a 9.8% surcharge reserved for the company and its shareholders. That amount, known as a “return on equity” in utility jargon, is how utilities earn their profits and attract investments to build expensive infrastructure.
In recent years, the “ROE” for utilities has generated intense debate, as some economists and former utility executives say an excessive return may be jacking up consumer bills and increasing profits. Utilities argue that they need a high return to keep paying for the myriad expenses that result from providing power, and the added strain of extreme weather on aging grids.
The EPI report says that state regulators should reduce ROEs for utilities, or link how much utilities earn to metrics like how reliable their service is. Those measures could reduce customer bills by shrinking utility profits, according to the report.
State regulators are still debating Xcel Energy’s return, which will shape how much more Coloradans pay for electricity. New rates are expected by this summer.
