PECO Rate Hike Would Significantly Increase Energy Bills: What To Know

PHILADELPHIA, PA — Coalitions of lawmakers from both sides of the aisle in southeastern Pennsylvania are pressuring state regulators to reject the latest electrical and gas rate hikes proposed late last month by PECO.

It comes amid growing concern about the consequences of energy usage by data centers powering artificial intelligence projects for large tech companies, and how that cost is being passed down to the consumer.

The new proposal would raise electric rates by 12.5 percent and natural gas rates by 11.4 percent, starting in 2027. That means more than two million families around the Philly region would pay, on average, an additional $20.08 per month for electricity and $14.52 per month for natural gas.

A letter signed by a group of Bucks County Republican lawmakers urged PECO to "reconsider," noting that PECO's net revenue already increased after last year's rate hike by 47.7 percent, to $814 million.

"We know that this is currently before the PUC, which will take time to investigate and ultimately will look to ensure that consumers are protected from excessive rate increases, but we look forward to discussing your proposal in person in the near future," the letter adds.

In Montgomery County, meanwhile, 10 Democratic lawmakers have signed on to a letter of opposition.

"This move by PECO to pass the costs of current and potential energy demands on the system onto the customers must be rejected," State Rep. Joe Webster, one of the signatories, said in a statement.

Webster and others are advocating for the passage for the Ratepayer Protection Bill, the first piece of proposed legislation in the state to regulate data centers. The bill requires tech companies pay their fair share for the costs of energy, while also requiring data centers to be powered by larger amounts of in-state renewable energy sources, like wind and solar.

The bill has passed through the state legislature and currently sits in the state Senate.

Such widespread bipartisan rejection of PECO demands is unique in recent history. While PECO rate hikes obviously draw consumer ire, organized resistance is typically a smattering of voices from advocacy groups. That large coalitions have formed in response to the latest hikes is reflective not only of a dire economic reality for many Pennsylvanians, but also the systematic issues with data centers that are being laid bare.

PECO announced its rate hikes at almost exactly the same time as it reached a crisis point in its negotiations with its union. Workers with the IBEW Local 614 have threatened to strike if PECO does not negotiate a new contract, pointing to "unchecked bloat and outrageous corporate greed at the top."

The union has never had a strike in its 20 year history of working with PECO.

PECO said the rate increases were needed to protect the system and infrastructure against severe weather.

"These investments will strengthen the grid, reduce outages, and ensure we’re delivering the safe, reliable service our customers expect every day," David Vahos, PECO president and CEO, said in a statement last week.

Public input hearings on the rate hikes are scheduled for June. PUC will likely not vote on the proposal until later in the year.