Electricity prices are rising, data centers are struggling to connect, and consumers are feeling the pinch — yet utilities keep reporting record earnings. What's going wrong, and how do we fix it? In this episode, Elisa Wood speaks with Michael Lee, former CEO of Octopus Energy US and founder of Distributed Grid, about the structural flaw at the heart of the American utility model: an incentive system that rewards building infrastructure regardless of whether it is needed.

Lee argues that this cost-of-service model — largely unchanged for a century — is driving an inflationary spiral in electricity rates and blocking the distributed energy resources that could make the grid more affordable and resilient. But his argument is not simply that utilities are bad actors. It is that utilities are rational actors operating under the wrong rules. Change the rules — and the business model — and utilities could earn more revenue by coordinating a decentralized grid than by building poles and wires.

Lee lays out a detailed roadmap: from reframing utilities as "network coordinators" to paying them for outcomes (reliability, affordability, speed to power) rather than capital deployed. He also confronts the political and social complexities — utility shareholders who depend on dividends, governors who fear blackouts, and a public that has never had to think about how electricity works. The conversation is both an indictment of the status quo and a genuine blueprint for a better grid.