Pa. Electric Rates Jump by 46% in Eight Years

Electricity rates across the PJM regional grid have risen sharply over the past eight years, and Pennsylvania customers have seen the biggest increase, a recent report found.

The research brief by the state Independent Fiscal Office (IFO) determined that average prices for Pennsylvania residents increased by 46.1% between 2018 and 2025, compared to 40.1% for Ohio, 39.1% for Virginia and 41% for all other Mid-Atlantic states in the PJM region. Pennsylvania’s average electricity price was 20.3 cents per kilowatt hour (kWh), while Ohio was just over 17 cents, Virginia, 16 cents, and other PJM states, 17.9 cents.

The IFO report indicates that the state’s reliance on natural gas generation is a major reason, due to a 200% jump in the spot price of natural gas between 2020 and 2022, as the COVID pandemic ended and demand soared due to the reopening of the economy.

Pennsylvania relies on natural gas for almost 60% of its power generation, well ahead of other states, in part due to the abundant supply from the Marcellus region.

PJM operates the electric transmission grid for 13 states and Washington, D.C. and has seen demand rapidly increase in the past several years while it has struggled to modernize its regulations to bring adequate new power generation online.

The IFO report also noted that energy generation and consumption has accelerated in recent years. Energy consumption across the PJM region increased by 2.1% between 2022 and 2025, after being stagnant. “The acceleration was driven by the commercial sectors in Ohio and Virginia, due to a proliferation of data centers in both states,” the report states.

That increase in demand will accelerate further due to the rapid increase in the number of data centers being built, including in Pennsylvania. PJM predicts that summer demand will increase by 3.6% per year through 2036, while winter demand will increase by 4% per year.

Data centers use massive amounts of electricity and their expansion is driving electric rates up as projected demand outpaces the supply of energy. PJM and a number of states, including Pennsylvania, are now working on regulations to make sure that the costs of providing that increasing electric supply are paid by the data center operators, and not by retail utility customers.