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Pennsylvania Electric Rates Set to Increase

As electric rates rise, Pennsylvania residents are encouraged to manage their energy supply choices.

News Summary

Residents and businesses in Pennsylvania will face an increase in electric generation rates starting June 1, ranging from 5% to 40%. The Pennsylvania Public Utility Commission (PUC) encourages consumers to actively manage their utility expenses by comparing electricity suppliers and monitoring market trends. With a significant growth in electricity demand and issues in the PJM capacity auction contributing to rising costs, the PUC promotes energy-saving strategies to alleviate some financial burdens during this challenging period.

Pennsylvania residents and businesses will see an increase in electric generation rates starting June 1, following adjustments made by electric distribution companies based on wholesale market rates. The Pennsylvania Public Utility Commission (PUC) is advising consumers to take proactive steps to manage utility expenses amid these rising costs.

Most electric distribution companies in Pennsylvania implement their “Price to Compare” (PTC) every June 1 and December 1. This year, nearly all companies are increasing their electricity generation rates. The typical increase ranges from 5% to 12%, but some customers could see hikes exceeding 30% to 40%.

For instance, UGI’s residential generation rate will rise by 7.8%, going from 10.637 cents per kilowatt-hour to 11.471 cents per kWh. Additionally, PPL customers will experience a more significant jump, with a 16% increase from 10.771 cents per kWh to 12.490 cents per kWh. These changes primarily affect customers receiving “default service” who have not chosen a competitive electricity supplier.

Customers who have opted for competitive suppliers will maintain their contracted rates but are recommended to stay vigilant about market trends that could affect future costs. With current trends indicating fewer competitive supplier offers below utility rates compared to previous years, consumers are encouraged to shop around. Those interested in comparing different suppliers can visit PAPowerSwitch.com to explore their options.

As electric rates are set to climb, customers are advised to actively manage their supplier contracts. Monitoring expiration dates and current market prices may provide opportunities for potential savings. Moreover, suppliers that have rates lower than the utility’s PTC may offer short-term contracts, typically lasting three to six months.

The PUC is also promoting the idea of a “Summer Energy Checklist” to assist consumers in reducing their electricity use and managing costs. Strategies suggested include conducting home energy audits and investing in energy-efficient upgrades. As electricity demand continues to rise—partly fueled by the growth of data centers—further rate increases may be anticipated in the near future.

Recent actions by Pennsylvania Governor Josh Shapiro highlight the concerns surrounding rising electric rates, including a complaint filed with the Federal Energy Regulatory Commission. This complaint points to issues linked to the PJM capacity auction design, which is crucial for coordinating electricity flow in Pennsylvania and neighboring states. The new capacity auction prices have seen a staggering increase of over 800% year-over-year, contributing significantly to consumer costs.

Experts have noted that the incorporation of renewable energy sources into the electrical grid has encountered various obstacles, further adding to the increasing costs. The current trajectory has led to an overall rise of nearly 30% in Pennsylvania’s electricity rates from 2020 to 2024, climbing from approximately 14 to 18 cents per kilowatt-hour.

In conclusion, as electric rates rise, consumers in Pennsylvania are encouraged to take a hands-on approach to their energy supply choices. The PUC stresses the importance of shopping for electricity options that could lead to cost savings during these challenging financial circumstances.