Why do your electricity bills keep rising—and who actually benefits from it? In this highlight episode, we unpack the complex (and often hidden) financial mechanics behind utility companies and how they make money. From cost-of-service regulation to the role of operating costs, capital investments, and returns, you’ll gain a clearer understanding of how pricing is determined and why it doesn’t always feel fair.

Listen in as we break down where utility companies generate profit, how return on equity (ROE) is set, and why this one factor can significantly impact what consumers pay. You'll learn the difference between how the system should work versus how it actually operates today, including the long-term financial implications for households and businesses. If you’ve ever wondered why energy costs seem to keep climbing, this conversation will give you the insight to make sense of it all.

What You’ll Learn in Today’s Episode:

• How utilities are designed to make money.
• What cost-of-service regulation means.
• The difference between operating and capital costs.
• Why utilities spread costs over time.
• How depreciation and amortization work.
• The role of return on capital.
• Why profit comes from return on equity (ROE).
• How utilities finance investments with debt and equity.
• Why ROE is set by regulators—not the market.
• How inflated ROE impacts consumer energy bills.

Resources in Today's Episode:

• Mark Ellis: LinkedIn
• Gareth Evans: LinkedIn
• Dan Roberts: LinkedIn
• VECKTA: News

You can view a video of the conversation on VECKTA's website here: https://tinyurl.com/3vfb6c7e