The campaign signs are coming down but the electric bills are still going up.
Across the country, candidates campaigned on energy affordability, data centers and utility accountability. Now comes the opportunity to turn those priorities into lower costs.
That starts with a question: Who should finance new power plants—and bear the risk if those investments go wrong?
Data centers have intensified the conversation, but grid upgrades, aging equipment, fuel, maintenance and earlier utility investment decisions also contribute to rising bills.
Two challenges lie ahead: serving growing demand and replacing retiring plants. In July 2025, the Department of Energy identified 104 gigawatts of firm generation slated to retire by 2030. Schedules can change, but the replacement challenge remains substantial.
HIGHER PRICES HAVEN’T DELIVERED A BETTER MODEL
From 2008 through 2025, average electricity prices across all customer classes rose approximately 52% in monopoly states, compared with 23% in states that broke up the utility monopoly.
Those increases came before the next major wave of power-plant spending. After years of limited utility investment in new baseload generation, many monopoly utilities are proposing major construction programs. As approved projects enter rates, customers will pay construction and financing costs, plus utility profits, for decades. Today’s rate increases are just the beginning.
Meanwhile, independent power producers built more than twice as much generating capacity nationally as utilities during that period. Even within monopoly states, they built more capacity than utilities and without ratepayer financing.
States now face a choice: allow businesses to buy directly from those producers and encourage further and larger private investment, or continue requiring customers to depend on utility procurement.
BILL RELIEF MUST ADDRESS COST-DRIVERS
Lawmakers have pursued disconnection protections, payment extensions, assistance programs, transparency and greater attention to affordability. Spreading costs over more years can also soften immediate increases and these measures help customers manage bills.
But they do not resolve the biggest cost challenge. How much new generation should captive utility monopoly ratepayers finance?
FOUR PROCUREMENT OPTIONS–AND WHO CARRIES THE RISK
Where utilities control supply, they generally have four options to continue to deliver reliable energy:
1. Utility-built and owned generation. Customers pay approved construction, financing, operating and fuel costs, plus an authorized profit. Regulators can disallow costs, but customers can remain committed for decades—even when cheaper or new technology alternatives emerge.
Past projects illustrate the exposure:
2. Build-transfer agreements. A developer builds a plant and sells it to the utility. Contracts can assign construction risk to developers. After acquisition, customers generally fund the approved purchase price, financing, utility profit and operations.
Ownership obligations can outlast a plant’s service. Although not a build-transfer example, Missouri’s Rush Island illustrates the risk of poor utility management of an asset:
3. Power purchase agreements. An independent producer finances and owns the plant; the utility purchases power at agreed prices and terms. Contracts can shift construction and performance risks to developers. Customers fund approved contract payments, and similar renewal terms are not guaranteed.
4. Wholesale and short-term purchases. Market purchases offer flexibility but can expose customers to price swings through approved recovery mechanisms. Lower wholesale-sales revenues can also reduce customer credits.
Examples show how unexpected costs reach bills:
All four options leave utilities making procurement decisions and seeking payment and fallout from risk exposure from ratepayers.
THERE IS ANOTHER WAY
A new Mackinac Center report highlights the benefits of an alternative: Buy Your Own Power (BYOP). It lets a capped share of customers arrange and pay for their own electricity supply while preserving the regulated utility system.
Utilities may resist this solution because they earn guaranteed profits on plants they build and own. When businesses buy their own power, utilities have less to build—and less opportunity to profit. States retaining this monopoly model should at least let willing businesses shoulder those costs instead of putting them on everyone’s bills.
Michigan is one of 10 states that can demonstrate the approach. For example, since 2008, participation has been capped at 10% of utility electricity sales with more than 5,000 customers waiting in line for a chance to participate. Participants saved an estimated $185 million in 2024 compared with utility supply rates.
The benefit extends to everyone else: When these businesses buy their own power, utilities need to build fewer power plants. That means fewer construction costs—and utility profits—on everyone else’s bills. Mackinac estimates this limited program saved the rest of ratepayers $3.5-4 billion in costs the utility would have otherwise socialized across all ratepayers.
Program participants continue paying applicable transmission, distribution and other required utility charges. They simply buy their electricity supply outside of the utility. Utilities continue delivering power and recovering those approved costs. BYOP provides a relief valve for ratepayers without dismantling the utility model.
A PRACTICAL REFORM FOR THE NEXT SESSION
The Energy Freedom & Fairness Act, commonly called Buy Your Own Power or BYOP, offers this framework. Versions introduced in Indiana (SB272 | summary) and West Virginia (SB733 | HB5411) would let qualified large customers procure competitive supply while preserving utility delivery.
BYOP can reduce utility generation spending, attract private capital and encourage innovation.
It is not deregulation. Participants pay their appropriate share of grid services and existing obligations. Supply requirements, coordinated planning and return-to-service rules protect other customers.
Growing demand and replacing aging plants will require substantial investment. BYOP lets willing businesses take responsibility for their own power and private investors bear the risk, reducing what everyone else must finance.
For those elected on a promise of energy affordability, the test is simple: does a proposal reduce costs, or just change when customers pay them?
Before committing constituents to decades of power-plant costs and utility profits, bring more voices to the table. Businesses are willing to buy their own power, and private companies are willing to build it and invest in states.
Promises don’t have to die after election day. Lawmakers can deliver on electricity affordability with the right solution—without asking their constituents to foot the bill.
