Pennsylvania Electricity Rates Set to Increase in June 2025

Pennsylvania residents and business-owners should start preparing for potential changes in their electricity bills. Recent developments in the PJM Interconnection capacity auction held in 2024 are signaling a possible increase of 20% or more in energy costs starting in June 2025, when many current utility rates are set to be updated. Understanding the drivers of these increases and exploring your options are essential for smart energy management.

What is PJM and Why Does It Matter to Your Electricity Bill?

PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states, including Pennsylvania. Think of PJM as the air traffic controller for the electric grid in our region, ensuring a reliable supply of power.

One of the ways PJM maintains this reliability is through its capacity market. This market is designed to ensure that enough power generation resources (like power plants) are available in the future to meet anticipated demand. Power generators bid into this market, essentially promising to have a certain amount of electricity available when needed.

These capacity costs are then factored into the overall price of electricity that utilities and retail energy suppliers pay, and ultimately, these costs are passed on to consumers like you.

The 2024 Capacity Auction: Why Costs are Going Up

The results of PJM’s 2024 capacity auction indicated a significant increase in the price of capacity for the delivery year beginning in June 2025. Several factors contributed to this rise, including increased demand projections, the retirement of some older power plants, and the costs associated with maintaining a reliable and diverse energy mix.

This increase in the capacity price directly impacts the cost that energy suppliers pay to ensure they can meet the electricity needs of their customers. As these contracts come up for renewal in June 2025, Pennsylvania homeowners and businesses are likely to see these higher costs reflected in their updated utility rates

Understanding the Price to Compare Across Pennsylvania Utilities

In Pennsylvania’s restructured electricity market, the “Price to Compare” (PTC) is a crucial benchmark, representing the default supply rate from your local utility. Here’s a look at major PA utilities and their service areas, along with their current PTC most of which are set to be updated in June and likely to reflect the increased capacity costs:

• PECO Energy: Current residential PTC is approximately 9.239¢/kWh (until May 31, 2025). Serves Philadelphia, Bucks, Chester, Delaware, and Montgomery counties. Expect this to increase in June.
• PPL Electric Utilities: Current residential PTC is 10.771¢/kWh (until May 31, 2025). Serves Allentown, Bethlehem, Harrisburg, Lancaster, Scranton, and Wilkes-Barre. Anticipate a rise in their PTC come June.
• Duquesne Light Company (DLC): Current residential PTC is around 10.85¢/kWh (until May 31, 2025). Serves Pittsburgh, Allegheny, and Beaver counties. Their PTC is also projected to go up in June.
• West Penn Power (FirstEnergy): Current residential PTC is 9.481¢/kWh (until May 31, 2025). Serves Altoona, Erie, and Greensburg. Be prepared for a likely increase in their PTC starting in June.
• Penn Power (FirstEnergy): The current residential Price to Compare for Penn Power is 8.957¢/kWh (until May 31, 2025). This utility serves areas in western Pennsylvania, including New Castle, Sharon, and parts of Butler and Beaver counties. Expect their PTC to also increase in June.
• Met-Ed (FirstEnergy): Met-Ed’s current residential Price to Compare is 9.788¢/kWh (until May 31, 2025). Their service area covers a large portion of central and eastern Pennsylvania, including cities like Reading, parts of York, Gettysburg, and Easton. A rise in their PTC is anticipated in June.

What are Pennsylvania Lawmakers Doing about Rising Energy Costs?

Pennsylvania lawmakers are actively working to lessen the impact of the anticipated electricity price surge. Governor Josh Shapiro has directly engaged with PJM Interconnection, even filing a complaint with federal regulators to challenge the auction results that threatened significant cost increases for consumers. His administration successfully negotiated a lower capacity auction price cap for the next two years, a move projected to save Pennsylvanians billions of dollars in potential energy bill hikes.

While these governmental efforts offer substantial relief by limiting the potential for even greater price increases, the core reasons behind the higher capacity costs persist. Consequently, it remains crucial for Pennsylvania residents and businesses to take individual action. Exploring and comparing alternative Pennsylvania electricity providers and plans, and considering the benefits of locking in a long-term fixed-rate plan, are essential steps to gain control over future energy expenses and secure budget certainty.

Why are Consumer Costs only going up 10-20% when Capacity Prices were up 800%+?

While the PJM capacity auction saw a dramatic surge in prices, the anticipated 10-20% increase in Pennsylvania electricity rates for consumers is due to several mitigating factors. The capacity cost is only one part of your total electricity bill, which also includes generation, transmission, and distribution fees.

Governor Shapiro’s intervention to lower the auction price cap will significantly reduce the financial burden on utilities and suppliers.Furthermore, the impact of the auction results will be tempered by staggered rate updates and existing contract terms for various suppliers.

Regulatory oversight by the Pennsylvania PUC and the competitive nature of the state’s retail electricity market will also play a role in moderating price increases passed on to consumers. Therefore, while the PJM auction signals higher costs, the final impact on your bill will likely be a more manageable 10-20% increase.