The Failures of the Investor-Owned Utility Model & the Public Power Alternative in Washington DC

This white paper examines how Washington, DC’s electric utility, Pepco, fails to perform its key functions and explores the potential for a public power utility to perform these functions more effectively.

At its core, Pepco’s failures as an electric utility stem from the fact that it is an investor-owned utility (IOU). As an IOU, Pepco’s first priority is to enrich shareholders, which comes at the expense of DC residents, the city’s clean energy goals, and energy justice. Public power is a proven alternative to the IOU model, in which a utility is owned and operated by the municipality it serves and is democratically accountable to local residents, and as a result, prioritizes the needs of residents above all else. In prioritizing the needs of residents, a municipal utility in DC could lower residential energy costs and protect energy access, help reach DC’s climate and clean energy goals, and increase energy democracy by increasing local control and accountability within our energy system, all while providing strong union jobs.

This paper will demonstrate how Pepco prioritizes enriching its shareholders at the expense of delivering reliable and affordable service to DC residents. The paper will also describe how only a public power utility can address the shortcomings inherent to an IOU.