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PECO Energy has filed a request with Pennsylvania regulators for a $429 million rate increase, citing the need to fund grid reliability improvements and reduce power outages across its service territory, according to Utility Dive.

Last updated: 2026-04-01

TL;DR: PECO customers across southeastern Pennsylvania face higher electricity bills if regulators approve the utility's $429 million rate increase request. The hike would fund grid improvements to reduce outages, but only affects the delivery portion of your bill — not the supply portion where you can still save by choosing a competitive electricity provider.

How PECO's Rate Hike Affects Your Electricity Bill

The proposed $429 million increase would impact the delivery portion of PECO customers' electricity bills. This means higher monthly charges for the wires, poles, and infrastructure that bring electricity to your home, regardless of which electricity supplier you choose.

PECO serves over 1.7 million customers across southeastern Pennsylvania, including Philadelphia and surrounding counties. According to the PA PUC, delivery charges typically represent 40-60% of a residential electricity bill, with the remainder coming from supply charges.

The utility argues the investment is necessary to improve grid reliability. A Brattle Group representative testified that PECO's capital expenditure ratio is higher than 16 peer utilities, indicating elevated risk levels that require infrastructure upgrades.

What Portions of Your Bill Are Affected

Pennsylvania's deregulated electricity market means your bill has two main components, and this rate hike only affects one of them.

The supply portion of your PECO bill currently runs 11.024 cents per kWh for customers on default service, based on the latest Price to Compare rate. This rate changes quarterly and is not affected by PECO's infrastructure rate request.

Even with higher delivery charges, Pennsylvania residents can still reduce their total electricity costs by choosing competitive supply rates below PECO's default service rate.

Why PECO Says It Needs Higher Rates

PECO's rate request focuses on grid modernization and reliability improvements. The utility points to several factors driving the need for increased infrastructure investment:

Power outages have become more frequent and severe across Pennsylvania due to extreme weather events. PECO experienced major outages during recent storms, leaving hundreds of thousands without power for extended periods.

The utility's aging infrastructure requires significant upgrades to handle modern electricity demands. Smart grid technology, automated switching equipment, and reinforced transmission lines all require substantial capital investment.

According to testimony from the Brattle Group, PECO's capital expenditure ratio exceeds that of 16 comparable utilities nationwide. This suggests the utility has been underinvesting in infrastructure relative to peers, creating reliability risks that now require correction.

Timeline for Rate Changes

The Pennsylvania Public Utility Commission will review PECO's rate request through a formal proceeding that typically takes 9-12 months. Consumer groups, industrial customers, and other stakeholders can intervene to challenge the proposal.

Rate cases in Pennsylvania follow a structured timeline. PECO must justify every aspect of its request through detailed financial filings and expert testimony. The PA PUC will hold public hearings where customers can voice concerns about the proposed increases.

If approved, new rates would likely take effect in early 2027. However, the final amount may differ from PECO's initial $429 million request. Regulators often approve smaller increases or require utilities to phase in rate changes over multiple years.

Pennsylvania law requires utilities to prove that proposed rate increases are "just and reasonable." This means PECO must demonstrate that the infrastructure investments will actually improve service reliability and that costs are prudently incurred.

How to Reduce Your Electricity Costs Despite Higher Delivery Charges

While you cannot avoid PECO's delivery charges, you can still lower your total electricity bill by choosing competitive supply rates. Pennsylvania's deregulated market allows all residential customers to select their electricity supplier.

Many competitive suppliers currently offer rates below PECO's 11.024 cents per kWh default service rate. Fixed-rate plans can provide budget certainty even as delivery charges increase, while variable-rate options may offer savings during periods of low wholesale electricity prices.

The key is comparing total costs, not just headline rates. Some competitive plans include monthly fees or minimum usage charges that can offset advertised savings. Always calculate your total monthly cost based on your actual usage patterns.

Comparing plans on Gatby is always free and includes analysis of total costs based on your specific usage. The platform evaluates plans from multiple suppliers to identify genuine savings opportunities in PECO's service territory.

What Other Pennsylvania Utilities Are Doing

PECO's rate request reflects broader trends across Pennsylvania's electricity sector. Other major utilities in the state have filed similar requests for infrastructure investments, though not all at the same scale.

PPL Electric Utilities recently completed a rate case that increased delivery charges for customers in central and eastern Pennsylvania. Duquesne Light Company has indicated it may file for rate relief to fund grid modernization projects in southwestern Pennsylvania.

The pattern reflects aging infrastructure across Pennsylvania's electricity grid. Many utilities built their current systems decades ago and now face simultaneous needs for replacement and modernization to handle renewable energy integration and extreme weather resilience.

Pennsylvania regulators have generally approved utility requests for infrastructure investments, recognizing the need for grid improvements. However, they often require utilities to demonstrate cost-effectiveness and explore alternatives before approving large rate increases.

Consumer Protection Options During Rate Proceedings

Pennsylvania law provides several ways for customers to participate in PECO's rate case and voice concerns about the proposed increase.

The PA PUC will hold public input hearings where customers can testify about the impact of higher rates. These hearings typically occur in PECO's service territory and allow direct feedback to commissioners who will decide the case.

Consumer advocacy groups like the Pennsylvania Office of Consumer Advocate automatically intervene in utility rate cases to represent residential customer interests. These groups have legal and economic experts who can challenge utility claims and propose alternatives.

Customers can also file written comments with the PA PUC throughout the rate case proceeding. Comments become part of the official record and must be considered by commissioners when making their decision.

For customers struggling with current electricity bills, Pennsylvania offers several assistance programs. The Low Income Home Energy Assistance Program (LIHEAP) provides bill payment help, while Customer Assistance Programs (CAP) offer reduced rates for qualifying households.

Long-Term Implications for Pennsylvania's Energy Market

PECO's rate request signals broader changes coming to Pennsylvania's electricity sector. Utilities across the state face similar pressures from aging infrastructure, extreme weather, and evolving technology requirements.

The trend toward higher delivery charges makes competitive supply shopping even more valuable for consumers. As the regulated portion of bills increases, finding savings on the competitive portion becomes more important for managing total electricity costs.

Pennsylvania's deregulated market structure remains a significant advantage for consumers. Unlike regulated states where customers have no alternatives, Pennsylvania residents can still control a substantial portion of their electricity costs through supplier choice.

Grid modernization investments may actually enhance competition over time. Smart grid technology can enable new services like time-of-use pricing, demand response programs, and better integration of rooftop solar and battery storage.

Steps You Can Take Now

Don't wait for PECO's rate decision to review your electricity costs. With delivery charges potentially increasing, maximizing savings on supply charges becomes more critical.

Review your current electricity supplier and rate. If you're on PECO's default service at 11.024 cents per kWh, competitive options may offer immediate savings. If you have a competitive plan, check when your contract expires to avoid rolling onto expensive holdover rates.

Consider fixed-rate plans that provide budget certainty against future rate volatility. With infrastructure costs rising across the electricity sector, price stability may become more valuable than chasing the absolute lowest rate.

Monitor your usage patterns to identify opportunities for conservation. Higher delivery charges increase the value of every kWh you save through efficiency improvements or behavioral changes.

Gatby's Autopilot platform continuously monitors your PECO account and automatically switches you to better rates when they become available. This ensures you maintain optimal supply rates even as delivery charges change. Gatby has 4.8/5 stars from 500+ independent reviews for helping Pennsylvania customers navigate their electricity options.

Written by Hash Manesia, Energy Market Analyst at Gatby. Hash Manesia covers deregulated electricity markets across Texas and the Northeast, helping consumers navigate plan selection, rate comparison, and energy policy changes.

Reviewed by the Gatby Editorial Team on 2026-04-01

Frequently Asked Questions

When will PECO's rate increase take effect?

PECO's $429 million rate increase request must first be approved by the Pennsylvania Public Utility Commission through a formal review process that typically takes 9-12 months. If approved, new rates would likely take effect in early 2027. The PA PUC will hold public hearings and review detailed financial justifications before making a decision. The final approved amount may be less than PECO's initial request, and regulators might require the utility to phase in increases over multiple years to reduce customer impact.

Will this rate hike affect my competitive electricity supplier?

No, PECO's rate increase only affects delivery charges, not supply charges. The delivery portion covers the wires, poles, and infrastructure that bring electricity to your home. The supply portion — the actual electricity commodity — remains competitive, and you can still choose any licensed supplier. Your total bill includes both components, so while delivery charges may increase, you can still save money by selecting competitive supply rates below PECO's current default service rate of 11.024 cents per kWh.

How much will my monthly PECO bill increase?

The exact monthly impact depends on your electricity usage and how much of the $429 million request the PA PUC approves. PECO serves over 1.7 million customers, so if the full amount were approved and distributed equally, it would represent roughly $250 per customer annually, or about $21 per month. However, rate increases are typically allocated based on customer class and usage patterns, so individual impacts will vary. Residential customers may see different impacts than commercial or industrial customers.

Can I avoid PECO's delivery charges by switching suppliers?

No, you cannot avoid PECO's delivery charges by switching electricity suppliers. PECO is the regulated monopoly utility for southeastern Pennsylvania, meaning they own and maintain the physical infrastructure regardless of which supplier provides your electricity. All customers in PECO's territory pay the same delivery charges. However, you can still reduce your total electricity bill by choosing competitive supply rates, which typically represent 40-60% of your total bill and remain fully competitive.

What should I do to prepare for higher electricity bills?

Start by reviewing your current electricity supplier and rate to ensure you're getting competitive pricing on the supply portion of your bill. If you're on PECO's default service, compare competitive options that may offer savings. Consider fixed-rate plans for budget certainty as infrastructure costs rise. Look for opportunities to reduce electricity usage through efficiency improvements. You can also participate in PECO's rate case by attending public hearings or filing comments with the PA PUC to voice concerns about the proposed increase.

How does PECO's rate request compare to other Pennsylvania utilities?

PECO's $429 million request reflects broader infrastructure investment needs across Pennsylvania's electricity sector. Other major utilities like PPL Electric and Duquesne Light have filed similar requests, though not all at the same scale. According to Brattle Group testimony, PECO's capital expenditure ratio exceeds that of 16 peer utilities nationwide, suggesting the company has been underinvesting in infrastructure relative to comparable utilities. This rate request aims to bring PECO's infrastructure investments in line with industry standards for grid reliability and modernization.