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Author Christian Fong says two common counterarguments used by utilities are…

2026-07-30 · 12:43 UTC ·@EnergyLawJeff ·0 min read

Brief

Christian Fong’s thread dismantles two longstanding utility arguments that have kept allowed ROEs elevated for about 40 years, arguing those rebuttals are incorrect. He urges regulators to align allowed ROEs with actual cost of equity as an affordability measure and to consider new utility business models alongside ROE reform.

Why it matters

Author Christian Fong says two common counterarguments used by utilities are incorrect and have been used for roughly 40 years to justify high allowed returns on equity (ROEs).

Key details

  • Fong argues bringing regulated utility ROEs more in line with actual cost of equity would be an affordability tool to lower consumer costs.
  • The thread also promotes exploring new utility business models as part of the solution, framing the ROE adjustment as one lever among broader reform options.
Source evidence

Terrific thread breaking down some common misconceptions about utility ROEs, and why bringing them more in line with actual cost of equity is an affordability tool we should keep on the table.

It's also a bit of an advertisement for why we should look for new utility biz models.

Christian Fong (@christiantfong)

Both of these counterpoints are incorrect and it’s really important to understand why, as these are really common arguments utilities have successfully used for the last 40 years to keep ROEs high! 🧵

— https://nitter.net/christiantfong/status/2082659966121550151#m