Why your electricity bill is so high and what Pennsylvania is doing about it

Pennsylvania residents are grappling with rising electricity costs, attributed to infrastructure improvements, weather-related challenges, and increasing consumption from data centers. PECO customers using 700 kilowatt hours monthly will see a 10% bill increase in 2025, followed by an additional $2. 70 hike in 2026. The Pennsylvania Public Utility Commission's recent retail price adjustments have led to significant increases, with some areas experiencing rises exceeding 30%. The PJM grid, which oversees electricity distribution across 13 states, faces difficulties meeting future demand amid a shrinking supply as older plants retire.

The 2025-2026 PJM capacity auction saw prices surge over 800% compared to the previous year, reflecting the growing demand within the grid. Factors such as the rise of electric vehicles and the shift to electric heat pumps contribute to this demand surge. Pennsylvania's position as a major electricity exporter complicates local supply issues, as much of its generated power flows out of state. As the state navigates these challenges, officials must strategize to ensure reliable and affordable electricity for residents.