Jae C. Hong/AP Photo
Electric crews work on power lines in the aftermath of the devastating wildfire in Lahaina, Hawaii, August 17, 2023.
Following the horrific wildfires on Maui, Hawaiian officials have launched an investigation into the events leading to over 100 deaths and the near-total destruction of the beach resort city of Lahaina. This scrutiny has included Hawaiian Electric Industries, the utility supplying electricity to 95 percent of Hawaiian electricity customers, and the owner of the power lines downed by high winds that smoldered in the dry grass.
On Monday, Hawaii Electric took responsibility for its power lines causing the first fire on the island, but claimed that firefighters failed to contain the blaze and left the scene, which led to a second fire that ultimately engulfed Lahaina. It added that its power lines were shut off for six hours by the time the second fire started.
Maui County countered that, without the initial spark from the power lines, the second fire would never have happened. “Pointing the finger on a fire that started 75 yards away and saying, ‘That’s not our fault, we started it but they should’ve put it out,’ I’m not sure how that will hold up,” said the county’s attorney.
Nearly two-thirds of Americans receive their electricity from for-profit corporations granted a monopoly over electricity distribution. In theory, state regulation protects the public from the excesses of these private companies. In practice, weak laws, poor oversight, and the swelling power of consolidation allow state-sponsored utility monopolies to cut corners and choke off competition in order to maximize profits.
Nearly two-thirds of Americans receive their electricity from for-profit corporations granted a monopoly over electricity distribution.
This behavior has made us more vulnerable to the consequences of climate change, through power outages, wildfires, and other calamities. At the same time, monopoly utilities have been a persistent obstacle to the clean-energy transition that we urgently need to stop climate change from getting worse. Asserting public ownership over distribution, and encouraging robust competition over production, could be the key to achieving a robust and fair clean-energy transition.
Take the case of Pacific Gas & Electric, the California utility responsible for multiple horrific disasters, from gas pipeline explosions to costly wildfires. These disasters killed dozens of California residents, caused billions in property damage, and led to PG&E’s bankruptcy—twice. Despite this disastrous track record, California political leaders have perpetuated the problem by allowing PG&E to continue serving as the monopoly deliverer of electricity to one-third of California customers. They aren’t alone.
The private electric distribution monopoly can block progress in fighting climate change because it allows utilities to act as gatekeepers and obstruct their competitors. PG&E successfully pushed California regulators to reduce compensation by 75 percent to rooftop solar projects that compete with its long-distance transmission lines. Research by my organization, the Institute for Local Self-Reliance, suggests that utilities play games with the connection process for rooftop solar across the country, with wide variations in the time and cost for projects to secure grid access. Some utilities have tampered with purportedly competitive bidding processes to favor their own power plant projects, a process I witnessed in Minnesota, where a utility’s solar proposal was the lone “qualified” bid to emerge from solicitation. Other investor-owned utilities routinely undercut regional transmission expansion in favor of power lines they control, as a means to protect their own profit margins.
As utilities have grown more powerful through mergers and impaired competition, they have increasingly used their resources and political power to undercut public oversight. In Ohio, monopoly electric company FirstEnergy embarked on a corrupt spending spree where it bought the loyalty of House Speaker Larry Householder, a leading public regulator, and other public officials to secure a massive bailout for its aging and uncompetitive power plants that will cost Ohio customers $400 million per year. In Florida, the monopoly Florida Power & Light recruited and funded “ghost” candidates in an attempt to siphon off votes and defeat legislators who opposed (among other policies) their legislation to undercut competition from rooftop solar. In Illinois, monopoly utility Commonwealth Edison will pay a $200 million fine in a deferred prosecution agreement over its payments to associates of former House Speaker Mike Madigan in exchange for profitable legislation. And a recent New York Times op-ed by David Pomerantz highlighted how these monopoly companies finance this activity, legal and illegal, using the money collected from their captive customers.
In the monopoly system, customers are the ATM for the utility lobbying machine, and private shareholders are the winners.
We don’t have to accept catastrophic fires, political corruption, and monopoly power abuse as the price of electricity service. Another option is to shift grid management into public hands, like we do for roads. In Maine, the Pine Tree Power campaign has put an initiative on this fall’s ballot to do just that, in response to the state’s customers being stuck with the highest prices and worst customer service in the country, delivered by a foreign-owned utility conglomerate. Public-power campaigns in New York, Illinois, Texas, Colorado, and several other states have similarly challenged the right of for-profit companies to abuse their captive customers.
The evidence supports the campaigns: Data from the American Public Power Association says that publicly owned utilities have lower electricity rates for residential and commercial customers and average outage times only half as long each year as investor-owned utilities. Public utilities also offer local accountability. At a minimum, a new public manager should offer neutral, nondiscriminatory access to any clean-energy project or grid service.
We can also reduce the caustic political influence of private electric companies and improve service for customers of all utilities, private or public, by adopting policies to enable more competition. Customers should be able to sign up to pool their power to reduce electricity demand, a practice that narrowly saved the California grid from widespread blackouts last summer and earned participating customers savings on their bills. Unfortunately, utilities in 48 states have blocked access to a similar program. State legislators should repeal laws on the books in 12 states giving monopoly utilities the first right to own new transmission lines. State regulators should revoke the monopoly franchise of utilities engaged in negligent or corrupt behavior to make clear that bad actions have consequences.
Hawaiian Electric is disputing their negligence in causing the Maui tragedy. Even so, we know that the system we’ve constructed—pairing private profit and monopoly—can only add fuel to the fire.
