PECO Rate Hikes: Pennsylvania Residents Face Soaring Energy Costs
PECO Rate Hikes: Pennsylvania Residents Face Soaring Energy Costs
Pennsylvania Governor Josh Shapiro is fiercely opposing PECO’s latest proposal to increase electricity rates by 12.5% for customers in Philadelphia and its surrounding suburbs. This comes on the heels of a 10% rate increase in 2025, which already led to a significant jump in the utility’s net profits.
Governor Shapiro has publicly condemned PECO, accusing the company of prioritizing profits over the needs of Pennsylvanians. He stated on X (formerly Twitter) that PECO earned an “obscene $814 million” in profit last year and should have used those funds to offset costs for consumers instead of passing them on to shareholders. He vowed to “do everything I can to stop” the proposed rate hike.
Record Profits Fuel Controversy
PECO’s 2025 net profits soared to $814 million, a nearly 50% increase from the $551 million reported in 2024. This surge in profits has drawn criticism from lawmakers and consumer advocates, who argue that the utility is exploiting its monopoly position at the expense of ratepayers. The CEO of PECO’s parent company, Exelon, Calvin Butler, earned over $15.6 million in 2025.
What the Rate Hike Means for You
If approved by the Pennsylvania Public Utility Commission, the proposed 12.5% increase for electricity customers could add approximately $20.08 to a typical monthly bill. Suburban natural gas customers could also face an 11.4% increase, adding around $14.52 to their monthly bills. PECO has sought and received rate increases multiple times in recent years, raising concerns about affordability for Pennsylvania families.
A High Rate of Return
Experts point to PECO’s requested rate of return on equity (ROE) of 10.95% as a key point of contention. Marissa Gillett, a senior fellow at the American Economic Liberties Project, notes that this is significantly higher than the national average of 9.75% in the first quarter of 2025. This higher ROE suggests that PECO is seeking to maximize profits for investors, potentially at the expense of consumers.
Political Fallout and Public Opposition
The issue has quickly become a political flashpoint, with Governor Shapiro, who is up for reelection, taking a strong stance against the rate hike. Republican lawmakers in Bucks County have also voiced their opposition, urging PECO to reconsider its proposal. Furthermore, a petition is circulating among Montgomery County Democrats, calling on the Public Utility Commission to reject the rate increase.
PECO’s Response
PECO maintains that the rate hike is necessary to fund critical infrastructure upgrades, including efforts to reduce outages, strengthen the grid, protect customers during severe weather, and modernize the natural gas system. The company plans to invest $10 billion over five years in these improvements, claiming that 90% of its earnings are reinvested into system reliability, safety, and service quality. PECO states it shares Governor Shapiro’s concerns about affordability and is committed to keeping bills as low as possible.
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