What Can Pennsylvanians Do About Increasing Electricity Rates?

Just before Thanksgiving, Pennsylvania’s Public Utility Commission (PUC) alerted customers about the rise in standard charges for electricity for seven of the eight major utility companies across the commonwealth. The average increase is 5.7 percent per kilowatt-hour (kWh). Rate changes vary from a 10.6 percent hike in the Pittsburgh area to a 2.25 percent decrease for UGI customers in the northeast.

Hikes from seven major utilities:

• Duquesne Light: 12.43 → 13.75 ¢/kWh (+10.6 percent).
• Met-Ed: 11.905 → 12.965 ¢/kWh (+8.9 percent).
• Penelec: 11.004 → 11.747 ¢/kWh (+6.75 percent).
• Penn Power: 11.858 → 12.606 ¢/kWh (+6.31 percent).
• West Penn Power: 10.318 → 10.947 ¢/kWh (+6.1 percent).
• PECO: 10.4 → 11.024 ¢/kWh (+6 percent).
• PPL: 12.49 → 12.953 ¢/kWh (+3.7 percent).

One decrease:

• UGI Electric: 11.471 → 11.213 ¢/kWh (–2.25 percent).

The hikes are on top of an average 10 percent increase the PUC announced in June and last winter’s announcement, which, on average, increased by 5 percent in December 2024.

Nationwide Rate Hikes

Pennsylvania isn’t unique; residential rates are up nationwide. The causes are multifaceted, including rising fuel costs and the ever-growing demand that continues to strain power grids.

Historically, electricity usage grew slowly. However, with the advent of mega-users like data centers and the electrification of everything from cars to water heaters, the need for new, reliable generation is urgent.

Rising capacity prices also contribute to rising electricity bills.

Yesterday, PJM Interconnection, the regional transmission organization responsible for Pennsylvania’s grid, completed its scheduled capacity auction for power purchases from June 2027 to May 2028. While the auction cleared at the price cap, it cleared less power than is required to meet its target reserve margins. This result is troubling because the shortfall means the PJM region needs more power before the newly auctioned capacity hits the grid on June 1, 2027.

What Can We Do?

Lawmakers can ensure these rising rates are short-lived by reducing or removing the barriers to building new, affordable, and reliable generation. This is one reason why proper execution of the permitting reforms in the recent state budget is so important.

Rising rates also show the need to reduce our reliance on unreliable, expensive energy sources and avoid Gov. Josh Shapiro’s costly “Lighting Plan.”  The commonwealth’s Alternative Energy Portfolio Standards add unnecessary expenses that find their way to Pennsylvanians’ utility bills. In 2024, those charges added $702 million to customer bills.

In the meantime, Pennsylvanians could lower their bills by shopping for lower rates at PA Power Switch, an online PUC-maintained portal that allows ratepayers to compare prices. For example, a customer with a monthly average of 700 kWh in the PECO service territory can lock in a rate of 11 cents per kWh, versus 10.53 cents for 13 months. In PPL, customers can pay 10.99 cents, versus 12.49 cents for six months. And in the Duquesne Light service territory, residential customers can lock in their rate at 11.70 cents, versus 13.75 cents for 12 months.

The road to lower electricity rates is not squashing data centers, upping green subsidies, or making PJM the scapegoat for rising rates. Instead, a better pathway gives Pennsylvanians the freedom to safely and quickly build affordable and reliable generation.