By: Natalie Johnson

Ask most people what keeps electricity affordable, and you’ll hear about fuel costs, infrastructure, or regulation. Governance rarely makes the list. For Elizabeth K. Whitney, a longtime federal energy policy advocate, that’s the oversight that matters most.

From municipal utilities and rural cooperatives to emerging models such as community choice aggregation, she sees consumer-owned models responding to rising costs, shifting priorities, and new demand pressures with a different mandate: protect reliability, control costs, and put ratepayers first. Their focus, she contends, is not growth for its own sake, but protecting communities through disciplined decision-making. “They’re looking at what the system needs to operate reliably and affordably,” Whitney says, “not what investments will earn a return.”

Why Consumer-Owned Utilities Start From a Different Rate Model

The economics of nonprofit utilities are structured around service. That affects both rate-setting and investment decisions. Municipal utilities and rural cooperatives are typically governed by elected or appointed boards, which changes the incentives behind infrastructure spending. Rather than overbuilding to maximize returns, these community utilities prioritize reliability and lower cost of service. That model translates into materially lower rates. “Not-for-profit utilities typically have rates that can be up to 50% lower than neighboring investor-owned utilities,” she says.

That is central to understanding how nonprofit utilities keep rates affordable. Rate preservation is not treated as a downstream outcome; it is embedded in the business model. For communities facing rising costs tied to transmission upgrades, generation constraints, or new demand growth, that distinction is becoming more consequential. It also helps explain why protecting utility ratepayers increasingly depends on preserving structures that support this model. This includes tax-exempt financing and policy frameworks tailored to not-for-profit energy providers.

Federal Advocacy Is Becoming a Core Tool for Affordability

Federal advocacy for consumer-owned utilities has become increasingly important as policy decisions at the Federal Energy Regulatory Commission (FERC), the United States Department of Energy (DOE), and Congress affect market design, reliability structures, and infrastructure costs. Her concern today is that some legacy market structures continue driving unnecessary costs. Capacity markets are one example. “Congress should not hesitate to make major structural changes when things really aren’t working for consumers,” she says. That view places utility lobbying in a broader context. For nonprofit utilities, advocacy is not simply about defending institutional interests. It is often about preventing policy distortions from raising costs for local ratepayers.

Whitney also challenges a persistent misconception in Washington that smaller municipal utilities or cooperatives lack sophistication. “They do a lot with a little staff,” she says. “That doesn’t mean they don’t understand the markets they’re sitting in.” That expertise is increasingly shaping energy policy, particularly as affordability concerns influence federal policy on transmission, reliability, and cost allocation.

Protecting Customers From New Pressures

As rising energy demand, particularly from AI-driven data centers, intensifies pressure on infrastructure planning, Whitney points to innovation inside nonprofit utilities as a counterweight. Some are developing specialized rate classes for large customers. Others are using negotiated tariffs, upfront cost structures, or take-or-pay contracts designed to ensure cost causation stays with the customer, creating the new demand.

That approach reflects a central principle of affordable rates: growth should not shift disproportionate costs onto existing customers. In some cases, cooperatives have gone further, creating subsidiaries dedicated to serving data centers while shielding native load customers. These strategies reflect a growing policy strategy for not-for-profit energy providers, where affordability is protected not by resisting growth, but by structuring it carefully.

There is a similar promise in community choice aggregators. The future of community-owned energy, she argues, may depend partly on these models. In restructured states, community choice aggregators allow municipalities to procure power, while residents continue receiving the delivery service through incumbent utilities. “Because you no longer have the profit motive for that energy profile, the cost can be lower,” Whitney says.

Long-Term Affordability Depends on Durable Policy

If immediate rate pressures are demanding innovation, long-term affordable rates depend on policy durability. Whitney points to political volatility as a deeper challenge confronting nonprofit utilities. Federal priorities can shift far faster than utility planning horizons. Yet municipal utilities and cooperatives often make decisions over 30-year or longer timeframes.

“The pendulum could swing harshly in the other direction or settle somewhere in the middle,” Whitney says. “For utilities that plan on 30-year time horizons, that can be a huge challenge.” This is where preserving tax-exempt financing for public power, maintaining workable regulatory structures, and engaging with FERC and DOE as a nonprofit utility become linked to affordability itself. As rising costs test utilities across the country, that argument may carry growing weight. The question will be whether federal energy policy will evolve to support them.

Follow Elizabeth K. Whitney on LinkedIn or visit her website.