Ohio’s electric bills are high — and so are utility CEO salaries • Ohio Capital Journal
While Ohioans’ electric bills go up, so does the pay of the highest canine of firms that promote it.
In February, Ohioans’ electrical energy bills were up 22% in comparison with a 12 months earlier. That was the sharpest enhance of any state aside from Virginia, in line with the US Energy Information Agency.
Prices will nonetheless be high this summer season.
The National Energy Assistance Directors Association pprojects the average electricity cost to cool homes between June and September will reach $778.
That’s a $61 — or 8.5% — enhance from final 12 months and almost 37% increased than in 2020.
Much of the rise will be attributed to peaking demand from information facilities.
Despite growing prices for customers, Ohio’s Republican management incentivizes development of the facilities with huge tax breaks paid for by those self same customers.
And already within the throes of an affordability disaster, ratepayers additionally shelled out tens of thousands and thousands final 12 months to pay the salaries of utility executives who every make as many as lots of of Ohioans.
The prime wage at one utility — Columbus-based AEP — was by far the largest of any utility within the United States.
That was after the CEO acquired a $23 million elevate in 2025.
According to a new report by the Energy & Policy Institute, CEOs of the 4 electric utilities serving Ohio made a mixed $81 million final 12 months.
The utilities say govt salaries are decided by compensation committees working in a aggressive market.
But the report mentioned that the lavishly paid execs are typically rewarded for doing issues that make buyer bills go ever upward.
“In some cases, utilities pay bonuses tied to regulatory outcomes that drive profits, often at the direct expense of customers,” it mentioned.
“Most notably, this includes incentives tied to return on equity (ROE), or the profit utilities can collect from customers on qualifying capital expenses. Where financial metrics like utility share price can rise independently of customers’ rates, higher ROEs directly correspond to higher costs for customers.”
After getting his enormous elevate, AEP CEO Bill Fehrman acquired almost $37 million in 2025, the report mentioned.
That’s $8 million greater than the subsequent best-paid CEO, Southern Company’s Christopher Womack.
Assuming Fehrman works 60 hours every week, he makes almost $12,000 an hour.
That’s 507 instances as a lot because the median household in Ohio earned in 2024 — and 900 instances the state’s per-capita income.
AEP disconnected service to Ohio customers 173,000 times between June 2024 and May 2025.
Amid such struggles — and skyrocketing consumer costs — the corporate was requested the way it may justify Fehrman’s enormous pay package deal.
Scott Blake, AEP’s director of media relations, mentioned that whereas Fehrman’s compensation is within the tens of thousands and thousands, it is not all assured.
“AEP’s Board of Directors sets CEO compensation through an independent, performance-based process designed to support long-term value creation and the company’s strategic goals,” Blake mentioned in an electronic mail.
“While the reported 2025 compensation reflects a $36 million figure, a significant amount of that compensation is based on future performance and much of it will only be payable if five-year performance targets are met.”
AEP’s strategic objectives embody execution of its long-term capital plan, system reliability, security, regulatory outcomes, and sustained monetary efficiency, Blake defined.
If the corporate would not meet these targets, Fehrman will likely be paid “substantially less,” he mentioned.
However, in line with the Energy & Policy Institute report, a few of these objectives are within the curiosity of shareholders on the literal expense of their prospects.
It pointed to an AEP filing with the US Securities and Exchange Commission saying that when contemplating Fehrman’s pay, 17% of the choice was primarily based on “regulatory and legislative integrity.”
It outlined that as “achieve plan return on equity.”
In different phrases, when contemplating Fehrman’s enormous elevate, a significant component was how a lot did shareholders make via rising inventory values tied to firm income.
Regulators permit utilities to revenue from prospects financing capital — or development — initiatives.
In Ohio, a rash of such initiatives has been tied to increasing costs for customers — and increasing profits for utilities. And these are tied to massive govt pay packages.
AEP’s execs aren’t alone in doing properly thanks, partly, to Ohio ratepayers.
Duke Energy’s Harry Sideris was the nation’s seventeenth highest-paid utility CEO at almost $14 million.
The firm additionally paid outgoing CEO Lynne Good $8 million in 2025.
Company spokesperson Madison McDonald mentioned Duke was delicate to the jam during which customers discovered themselves. But she added that Sideris has a tricky job.
“We understand affordability is top of mind for many customers, and Duke Energy’s leadership and Board consider that context carefully,” McDonald mentioned in an electronic mail.
“President and CEO Harry Sideris’s compensation reflects the responsibility and complexity of leading one of the country’s largest electric and gas utilities during a time of major investment and transition. As we invest to strengthen and modernize our electric and natural gas delivery systems, we remain focused on keeping costs as low as possible, while delivering safe, reliable service for Ohio customers.”
Ranking simply behind Sideris on the 2025 compensation record was FirstEnergy’s Brian X. Tierney at $13 million.
He is main the Akron-based firm within the aftermath of the largest bribery and money-laundering scandal in Ohio history.
Spokeswoman Jennifer Young mentioned Tierney’s pay was benchmarked towards that of different utility executives.
“Like many large companies, FirstEnergy’s CEO compensation is determined by the Board’s independent Compensation Committee with advice from an outside compensation advisor and benchmarking against a peer group,” Young mentioned in an electronic mail.
Another CEO of a utility working in Ohio, Andrés Gluski of AES, made almost $9 million in 2025.
The firm didn’t reply to a request for remark.
Some state legislatures have taken on lavish pay for utility CEOs by shifting the fee from ratepayers to shareholders.
In Maryland, a legislation limits the quantity of CEO pay that may be billed to ratepayers to 110% of the salary of the chairman of the Maryland Public Service Commissionor $285,000 a 12 months.
In Minnesota, Bill It is pending that it will cap the utmost share of CEO pay shouldered by ratepayers on the wage of the governor, at present $200,000.
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