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Pepco Holdings CEO Tyler Anthony recently told Utility Dive that adding power supplies in PJM — including utility-owned generation — is one way to address affordability challenges as electricity demand rises across the mid-Atlantic region. This signals potential changes ahead for the 2 million customers served by Pepco across Delaware, Washington DC, and parts of New Jersey.

Last updated: 2026-03-25

TL;DR: Pepco's push for utility-owned power plants and PJM market reforms could lead to higher electricity rates for customers in Delaware, DC, and New Jersey. With winter heating costs already straining budgets, now might be the time to compare competitive supplier options before any rate increases take effect.

What Pepco's Market Strategy Means for Your Bill

Pepco's focus on utility-owned generation represents a shift from the traditional competitive market model. When utilities build and own power plants directly, those construction and operating costs get passed through to customers via regulated rate increases. This approach differs from the current system where independent power producers compete to supply electricity at market rates.

The timing concerns many energy analysts. Winter heating demand is already driving up electricity costs across the PJM grid, which serves 65 million people from Illinois to New Jersey. Adding utility-owned generation costs on top of seasonal price increases could create a double hit for residential customers.

Current default service rates across Pepco territories reflect this winter volatility. In Delaware, Delmarva Power's electric rate sits at 8.15 cents per kWh, while DC customers pay 15.24 cents per kWh through Pepco's standard offer rate. These rates change periodically based on wholesale market conditions and could increase further if utility-owned generation costs are added.

How PJM Market Reforms Could Affect Competitive Options

The PJM Interconnection oversees the wholesale electricity market that supplies power to Pepco's service areas. Recent discussions about market reforms focus on ensuring adequate power supply as coal plants retire and electricity demand grows from data centers and electric vehicle adoption.

However, these reforms could reshape the competitive landscape that gives customers choice in their electricity supplier. If utilities like Pepco gain more control over power generation, it might reduce the role of competitive suppliers who currently offer alternatives to default service rates.

For customers in Delaware, DC, and New Jersey, this could mean fewer competitive options or higher prices from remaining suppliers who must compete against utility-owned generation. The Delaware PSC, DC PSC, and NJ BPU will ultimately decide how these changes affect local markets.

Rising Electricity Demand Drives Infrastructure Costs

Pepco CEO Anthony highlighted rising electricity demand as a key driver behind the need for new power supplies. Data centers, electric vehicles, and heat pump installations are all contributing to higher electricity usage across the mid-Atlantic region.

This demand growth requires significant infrastructure investments. New power plants, transmission lines, and grid upgrades all carry costs that eventually appear on customer bills. Utility-owned generation represents one approach to meeting this demand, but it typically costs more than market-based alternatives.

The PJM grid operator projects continued load growth through 2030, particularly in the Washington DC metro area where data center development remains strong. This sustained demand growth could justify higher electricity rates regardless of who owns the power plants.

Winter heating demand adds another layer of complexity. Electric heat pumps and backup heating systems increase electricity usage during cold snaps, creating peak demand periods that require expensive backup power plants to operate.

What You Can Do Before Rate Changes Take Effect

Customers in Pepco territories have several options to manage potential rate increases before they take effect. The most immediate step involves comparing competitive supplier rates against current default service pricing.

Delaware customers served by Delmarva Power currently pay 8.15 cents per kWh for default electric service. Competitive suppliers in the Delaware market often offer fixed-rate plans below this level, particularly during winter months when wholesale prices tend to be more volatile.

Washington DC residents face higher default rates at 15.24 cents per kWh through Pepco's standard offer service. The competitive market in DC includes multiple suppliers offering both fixed and variable rate options, with some plans providing savings opportunities for typical residential usage patterns.

New Jersey customers have access to one of the most competitive electricity markets in the country. Default service rates vary by utility, with PSEG customers paying 19.86 cents per kWh and JCP&L customers paying 14.61 cents per kWh as of December 2025.

Comparing plans on Gatby is always free and takes just a few minutes. The platform automatically calculates total costs based on your actual usage patterns, not just advertised rates that might not reflect your real bill.

Understanding Your Options in Each State

Delaware Electricity Market

Delaware's competitive market allows all Delmarva Power customers to choose their electricity supplier. The state's consumer protection rules require clear disclosure of rates, terms, and fees before enrollment. Fixed-rate plans typically range from 6 months to 36 months, with early termination fees varying by supplier.

Winter represents an optimal time to lock in competitive rates, as wholesale electricity prices tend to be lower during shoulder seasons. Delaware customers who switch to competitive suppliers continue receiving the same reliable service through Delmarva Power's distribution system.

Washington DC Market Structure

DC's electricity market operates under Purchase of Receivables (POR) billing, meaning Pepco handles all billing and collections regardless of which supplier provides your electricity. This arrangement simplifies the customer experience while maintaining competitive choice.

The District's consumer protection regulations include a 10-day rescission period for new enrollments and requirements for clear contract terms. Competitive suppliers must be licensed by the DC Public Service Commission and follow strict marketing guidelines.

New Jersey Competitive Landscape

New Jersey offers one of the most mature competitive electricity markets in the country. All major utilities including PSEG, JCP&L, and Atlantic City Electric participate in the competitive market, giving customers access to dozens of supplier options.

The state's Basic Generation Service (BGS) rates change annually each June, providing a predictable benchmark for competitive comparisons. New Jersey customers benefit from strong consumer protections and a robust complaint resolution process through the Board of Public Utilities.

Timing Considerations for Winter 2026

Winter heating season creates both challenges and opportunities for electricity customers across the mid-Atlantic region. Heating demand drives up wholesale electricity prices, but it also motivates competitive suppliers to offer attractive fixed-rate plans to secure customers before spring demand drops.

Budget billing programs offered by most utilities can help smooth out seasonal cost variations. These programs calculate average monthly payments based on historical usage, reducing the impact of winter spikes on monthly cash flow.

Energy efficiency improvements like weatherization, programmable thermostats, and LED lighting upgrades can reduce overall electricity usage regardless of supply rates. Many utilities offer rebates or financing for these improvements through programs approved by state regulators.

The Energy Information Administration projects continued winter heating cost increases through March 2026, making fixed-rate electricity plans particularly attractive for budget-conscious customers.

How Gatby Helps Navigate Market Changes

Energy market changes like those proposed by Pepco require ongoing attention to rate comparisons and contract management. Manual shopping works for initial enrollment, but most customers forget to re-evaluate their options when contracts expire or market conditions change.

Gatby's Autopilot platform continuously monitors electricity rates and contract terms for customers across Delaware, DC, and New Jersey. When better options become available or contracts approach expiration, Autopilot automatically handles the switching process.

This automated approach becomes particularly valuable during periods of market uncertainty. Rather than trying to time rate changes or predict regulatory outcomes, Autopilot ensures customers always have competitive rates regardless of broader market developments.

Gatby has 4.8/5 stars from 500+ independent reviews, with customers consistently highlighting the platform's ability to deliver savings without ongoing effort. The service works with licensed competitive suppliers across all three states, providing access to rates that aren't always available through direct enrollment.

Long-Term Implications for Mid-Atlantic Customers

Pepco's strategic direction reflects broader trends affecting electricity markets nationwide. As traditional coal and nuclear plants retire, utilities and regulators must balance reliability, affordability, and environmental goals when planning future power supplies.

Utility-owned generation represents one approach to this challenge, but it typically results in higher customer costs compared to competitive market solutions. The PJM capacity market currently provides economic incentives for private investment in new power plants, but regulatory changes could shift this balance toward utility ownership.

Customers who establish relationships with competitive suppliers now may benefit from more stable pricing as market structures evolve. Long-term fixed-rate contracts can provide protection against both seasonal volatility and regulatory changes that might affect default service rates.

State regulators will play a crucial role in determining how utility-owned generation affects customer bills. Public comment periods and regulatory hearings provide opportunities for customer input on proposed rate changes, though few residential customers participate in these proceedings.

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 2026-03-25

Frequently Asked Questions

How will Pepco rate increases affect my electric bill in Delaware this year?

Pepco's push for utility-owned generation could lead to regulated rate increases that appear as additional charges on Delaware customer bills served by Delmarva Power. These costs would be separate from the current 8.15 cents per kWh default service rate and would apply regardless of whether you choose a competitive supplier. The Delaware PSC must approve any rate increases related to new utility-owned generation, but customers have limited ability to avoid these costs once approved. The timing and magnitude of potential increases remain uncertain, as Pepco has not yet filed specific proposals with Delaware regulators. Competitive suppliers can still offer savings on the supply portion of your bill, but utility-owned generation costs would likely appear as delivery charges that all customers must pay.

Should I switch electricity suppliers in NJ before Pepco rates go up?

New Jersey customers should note that Pepco doesn't directly serve retail customers in New Jersey - the state's major utilities are PSEG, JCP&L, and Atlantic City Electric. However, PJM market reforms that Pepco supports could affect wholesale electricity costs across the entire region, including New Jersey. Switching to a competitive supplier now could provide protection through fixed-rate contracts that lock in current market prices before any PJM reforms take effect. New Jersey's competitive market offers numerous supplier options with rates often below the current BGS default rates of 14.6 to 19.9 cents per kWh depending on your utility. Fixed-rate plans typically range from 12 to 36 months, providing budget certainty during a period of potential market changes. Compare current offers against your utility's Price to Compare rate to identify potential savings opportunities.

What's the cheapest electric plan in DC with Pepco as my utility?

The cheapest electricity plan in Washington DC varies based on your usage patterns and current market conditions, as competitive supplier rates change frequently. Pepco's current default service rate of 15.24 cents per kWh serves as the benchmark for comparison. Many competitive suppliers offer fixed-rate plans below this level, particularly for customers with typical residential usage between 500-1000 kWh per month. Variable-rate plans might start lower but can increase over time, making fixed-rate options more predictable for budget planning. DC's Purchase of Receivables billing system means you'll continue receiving one bill from Pepco regardless of which supplier you choose. Rather than searching for a single "cheapest" plan, focus on total monthly costs based on your actual usage history. Supplier rates, fees, and contract terms all affect your final bill amount beyond the advertised per-kWh rate.

How do I qualify for Pepco energy assistance programs in Delaware?

Pepco doesn't directly operate energy assistance programs in Delaware - these programs are typically managed by the state government or local agencies in coordination with Delmarva Power, which serves most Delaware customers. The Delaware Department of Health and Social Services administers the Low Income Home Energy Assistance Program (LIHEAP), which helps qualifying households pay electricity and heating bills. Income eligibility is generally set at 60% of state median income, though specific thresholds change annually. Additional assistance may be available through weatherization programs, budget billing plans, and emergency payment assistance for customers facing service disconnection. Delmarva Power also offers payment plans and medical emergency protections for customers with documented health conditions. Contact Delaware 211 or visit the state's social services website for current program details and application procedures. Some competitive suppliers also offer specialized rates or payment options for low-income customers enrolled in state assistance programs.

Are there better electricity rates than Pepco in Washington DC right now?

Yes, competitive suppliers in Washington DC frequently offer rates below Pepco's current default service rate of 15.24 cents per kWh. The DC competitive market includes multiple licensed suppliers offering both fixed and variable rate plans, with many options providing savings for typical residential customers. Fixed-rate plans often range from 11 to 14 cents per kWh for 12-24 month terms, though exact rates depend on market conditions and contract length. Variable-rate plans might start lower but can fluctuate monthly based on wholesale electricity costs. When comparing options, consider total monthly costs including any monthly fees or minimum usage charges, not just the per-kWh rate. DC's consumer protection rules require a 10-day rescission period for new enrollments, giving you time to review contract terms after signing. The DC Public Service Commission maintains a list of licensed suppliers and their current offers, though rates change frequently based on market conditions and supplier promotions.

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