The Great Lakes Promise: Cost, Resilience, and Refuge is a series highlighting how the shared connection to freshwater among Great Lakes cities and states impacts our economic, public, and environmental health.
These articles are part of a series in partnership between Great Lakes Now and Planet Detroit. Read the whole series here.
Sherita Hamlin has watched her utility bills more than double in recent years. On Chicago’s West Side, summer air conditioning is a luxury she now rations. Groceries and entertainment for her five children take a back seat to keeping the lights on.
Hamlin estimates that her monthly electric bill has climbed from $70 to $150 over the last five years, while her monthly winter gas bills have risen from $110 to $220.
“I thank God for the LIHEAP program,” she said, referring to the federal Low Income Home Energy Assistance Program, a federal energy assistance program that helped her avoid shutoffs. “Once that credit kicks in, it helps knock down the past due bills.”
That critical support is now in jeopardy.
Support for people like Hamlin could be undermined by the Trump administration’s push to defund federal energy assistance for low-income households, eliminate clean energy tax credits, and keep expensive coal generation online.
The Trump administration fired every staffer administering the LIHEAP program this spring, and the administration has proposed eliminating funding for the program entirely.
Across the Great Lakes, electricity and gas costs are rising, with utilities in Illinois, Michigan, and Wisconsin seeking hundreds of millions in additional rate hikes. Advocates point to a perfect storm: aging infrastructure, climate-driven disasters, profit incentives that reward utility spending, high rates of return for investors, and weak regulatory oversight.
Energy bills outrun inflation: ‘National issue’
As of April 2025, Illinois, Michigan, and Wisconsin had the highest residential electric rates in the East North Central region, outpacing Indiana and Ohio, according to the U.S. Energy Information Administration.
Nationally, residential energy bills have outpaced inflation since 2022, according to the EIA data, while consumers face rising costs for other essentials like food and housing.
Between 2014 and 2024, electric rates in Illinois and Michigan rose slightly faster than inflation, while Wisconsin’s stayed just below it. Over the longer term, inflation-adjusted rates have climbed sharply: since 2001, residential electricity prices have increased in Michigan (31%), Wisconsin (23%), and Illinois (3%)
Most real wage growth since 2001 has accrued to higher-income workers, while real wages for low- and middle-income groups have remained largely stagnant. This leaves lower- and middle-income groups less able to keep up with inflation for basic necessities like utilities.
Research from the American Council for an Energy-Efficient Economy shows that a significant portion of low-income households spend a disproportionate share of their income on energy bills.
Energy affordability experts consider 6% of income spent on energy to be affordable. But in many U.S. metro areas, one in four low-income households spends over 15% of their income on energy, far above that threshold. These high energy burdens can force difficult choices between paying utility bills and other essentials like food or medicine.
“This is a national issue — but we’re not having a national conversation about it,” said Charles Hua, director of the advocacy group PowerLines. While wildfires raise prices in the West and gas volatility affects the Northeast, ballooning infrastructure costs are the main driver in the Midwest, Hua said.
Utilities earn a rate of return on capital investments, which encourages them to build rather than maintain infrastructure, Hua said. Public service commissions approve these profit rates — often approaching 10% — that companies then return to shareholders.
The impact is deeply felt. Eighty-one percent of Midwest ratepayers feel powerless over rising bills, the highest percentage of any U.S. region, according to a recent PowerLines/Ipsos poll. Most expect rates to increase further, and two-thirds say utility costs are a source of financial stress.
‘Relentless churn’ of rate hike requests
Utilities in the Great Lakes states are filing rate hike requests more frequently, and often with little resistance, advocates say. Regulators and consumer advocates often find themselves outmatched, working under tight deadlines and with fewer resources than the utilities they’re tasked with overseeing.
“We’re seeing a relentless churn of rate case filings across the Upper Midwest,” said Karlee Weinmann of the Energy and Policy Institute.
In Michigan, the timeline between Consumers Energy’s electric rate requests shrank from 18 months in 2012 to 15 months in 2024. DTE Energy’s filings accelerated from every two years to roughly every 17 months, according to MLive. At the same time, lawmakers shortened the review window for rate cases from 12 to 10 months, leaving less time for scrutiny from public interest groups and the public.
“That creates an asymmetry where the utility gets whatever time they want to prepare their rate cases … and the rest of us have what works out to be a tight schedule to argue against it,” said Douglas Jester, a consultant with 5 Lakes Energy who frequently contributes to rate case testimony.
Michigan’s 2016 energy law made the process even tougher by allowing utilities to base rate increases on future projected spending rather than historical costs. The industry refers to this as the “future test year” model. Critics argue that it requires regulators to approve budgets without full visibility into utility operations.
Illinois and Wisconsin face similar time constraints for rate case decisions as Michigan, while Weinman said regulators often work with limited staff.
Abe Scarr of Illinois PIRG said it’s a one-sided system.
“They know everything about their infrastructure — we know only what we can extract.”
Weinmann said that rate hike requests compound previous increases, and utilities are likely to continue their pace of requests until they encounter pushback from regulators.
“We’re seeing examples here and there where commissions limit to varying degrees how much utilities can raise rates, but they’re still achieving the objective of raising rates,” she said.
‘Gold plating’ the grid
Consumer advocates say utilities are inflating costs by “gold plating” the grid: investing in unnecessary capital projects to maximize profits, rather than prioritizing preventive maintenance like tree trimming.
“There’s always concern they’re pushing too much into the capital side,” said Tom Content, director of the Citizens Utility Board of Wisconsin.
Here’s how it works: When utilities invest in infrastructure — like poles, wires, or substations — they’re allowed to recover those costs from customers, plus a rate of return, approved by state regulators. This profit is only earned on capital spending, not operational expenses, giving utilities a financial incentive to build more, even if it’s not the most efficient option.
Amy Bandyk, executive director of the Citizens Utility Board of Michigan, said costly and often avoidable replacements of transmission lines, transformers, poles, and pole tops are examples of overbuilding for investor gain.
At the center of this problem is the high rate of return utilities earn on infrastructure investments. In Michigan and Wisconsin, those returns have hovered around 10%, despite utility stocks being low-risk compared to the broader market. A January report from the Economic Liberties Project found these profits cost the average U.S. customer an additional $300 per year.
5 Lakes Energy’s Jester said Michigan regulators have generally reduced the capital costs utilities can recoup in rate cases, typically by 40%–50%, although advocates push for 60%-70% cuts. Shrinking the gap between what utilities propose and what’s truly needed could help keep rates below inflation, he said.
Still, not all costs are avoidable. Aging infrastructure and climate extremes are driving legitimate spending needs. A 2024 state audit revealed that significant portions of DTE and Consumers Energy’s systems were over 50 years old, with some components dating back more than a century.
Severe weather is compounding the problem. In 2023, a single ice storm cost DTE $50 million in repairs. Derechos in 2020 and 2021 caused billions in regional damage, according to a report in The Detroit Free Press. These events — now more frequent due to climate change — are straining outdated systems and driving up rates.
Advocates call for stronger laws, oversight, public support
To rein in rising energy costs, advocates say states need to do more than tweak rate cases — they need stronger laws, better-funded oversight, and support for low-income customers.
In Chicago, Hamlin said the Low Income Discount program from Peoples Gas cut her monthly bills significantly. She also hopes to benefit from Illinois’s Solar for All program, which allows renters and homeowners to subscribe to community solar arrays and earn bill credits with no upfront cost.
Advocates say far more needs to be done to protect ratepayers’ interests.
“The consumer voice is really not that represented in the (public service commission) ecosystem,” said PowerLines’ Hua. “There are very few people who show up to a PSC hearing and provide public comment.”
Advocates say better funding for those groups, and the commissions themselves, would help prevent utilities from overbuilding infrastructure and provide more support for energy efficiency programs.
In Michigan, energy consultant Jester said reform would require new legislation, noting that laws give utilities an unfair advantage, such as the shortened timelines for rate case reviews. Meanwhile, utilities wield considerable political influence.
In 2022, dark money groups linked to Consumers Energy and DTE contributed a combined $9.5 million to Michigan political campaigns, according to reporting from Bridge Michigan.
Utility spokespeople say the companies follow the law and that no customer funds are used for political donations; critics dispute this claim. Advocates in Michigan have launched a ballot initiative to restrict utilities’ political donations.
DTE spokesperson Jill Wilmot said the company is “committed to being a responsible corporate citizen and complies with all applicable laws regarding corporate donations and political contributions.”
Consumers spokesperson Katie Carey said, “We participate in the legislative and political processes with a focus on compliance and transparency, and no customer funds are used for any political contributions.”
Bandyk, with Michigan CUB, challenges Consumers’ statement that shareholders paid for political spending. “All the revenue comes from customers,” she said.
Jester said that, despite recommendations from administrative law judges to reduce investor returns, Michigan’s utility commission has largely declined to act.
“The commission has just not been willing to go there,” he said.