Electric Bill Price Hikes Ahead in Pa.

Electric bills for Pennsylvania residents will be going up in June as the wholesale cost of generation continues to rise due to increasing demand and tighter supply.

The state Public Utility Commission said that electric customers will see an increase of between 5% and 16% depending on their supplier starting June 1, and urged residents to take steps to reduce the impact of those increases by reducing their energy use and possibly shopping for alternative energy suppliers. In Southwestern Pennsylvania, West Penn Power customers will see an 8.8% increase, while Duquesne Light customers’ bills will rise by 11.6%.

Every June 1 and Dec. 1, electric companies adjust their per kilowatt-hour (kWh) charge, also known as the “Price to Compare,” for customers who have not selected an alternative energy supplier. These prices are based on wholesale market rates, and make up 40% to 60% of a customer’s utility bill.

Regional grid operator PJM Interconnection saw a dramatic increase of 833% in the price of wholesale electricity in its last capacity auction, rising to $269.92 per MW/day from $28.92 in the previous auction. This was attributed to a combination of factors, including an ongoing rise in peak demand, retirements of older fossil-fuel power plants, and challenges in bringing new generation online. This has led to a supply-demand imbalance, pushing prices upwards. At the same time, PJM noted that its reserve margin, the percentage of available power generation resources above the expected peak demand, had fallen, triggering concerns about long-term grid stability if more generation is not added. Much of the demand increase has been attributed to the swift rise in AI data centers, which run 24/7 and require massive amounts of energy.

Gov. Josh Shapiro filed a complaint with the Federal Energy Regulatory Commission in response to the projected higher utility rates and concerns about meeting demand. A settlement was reached that including a price cap and floor, while PJM seeks approval to streamline its regulations. It was also granted permission for a one-time program to fast-track new energy generation, and recently announced that 51 projects had been selected. Ninety percent will be online by 2030, with all added to the grid by 2031.

As higher bills are likely for at least the short term, the PUC is urging customers to prepare by looking for ways to reduce electric use. These include maintaining or upgrading heating and air conditioning systems; sealing windows and doors, and adding programmable or smart thermostats. Electric utility customers can also shop for energy from competitive electric suppliers based on price or other factors, such as renewable energy. Consumers can use the PUC’s electric shopping website PAPowerSwitch.com to explore and compare other offers from competitive suppliers. However, the PUC noted that rising wholesale energy prices have reduced the number of available offers below the utility default rate, making conservation and energy efficiency even more important.