(The Center Square) – Utility rates are high, especially for electricity, but one expert says that when adjusted for inflation, Pennsylvanians are actually paying less now than they did nearly 30 years ago.
While changes in electric generation prices coupled with summer heat are expected to drive up electric bills for residential and business customers, there are still ways to save.
The Price to Compare, or PTC, – the electric generation rate charged to non-shopping customers – increased on June 1 to reflect current wholesale energy market conditions and seasonal shifts in demand.
PTCs are determined through utility procurement plans approved by the Public Utility Commission, or PUC, but the generation portion of the electric bill is driven by market factors and not directly set by the commission.
“While energy prices are rising, the biggest driver of your monthly bill is how much electricity you use – and in the summer, usage tends to go up with the heat,” said PUC Chairman Stephen DeFrank in a press release. “By planning now and paying closer attention to your daily usage, you can avoid surprises when your bill arrives. A few simple adjustments in how and when you use electricity can make a noticeable difference.”
The commission also encourages consumers to explore the competitive supplier market, advice echoed by former PUC Commissioner and state Department of Energy Secretary John Hanger.
Hanger recently released a new report, expanding upon research he conducted in 2016 to include current data, comparing electricity prices in the commonwealth over several decades.
Speaking during a recent webinar hosted by the Retail Energy Advancement League, he says his updated analysis reaffirms that since Pennsylvania’s electricity market was deregulated in 1996, consumers have continued to benefit. In 2024, customers who selected the lowest available fixed-price offers from retail energy suppliers likely paid less, on average, than they did nearly three decades ago.
Supporters of the competitive retail market, including energy trade and advoacy groups and legislators, agree that its helped keep prices low for residents. However, they say, the Democratic-led push to join regional carbon taxing programs, which is currently pending in the state Supreme Court, will erase all those savings, spike prices by double digits, and cripple the natural gas plants that have helped lower emmissions from coal plants and keep electricity prices affordable.
Hanger has been on the record about supporting Pennsylvania’s entry into the Regional Greenhouse Gas Iniative, as well as signing off on a 2010 decree to join the Transportation and Climate Iniative to reduce the commonwealth’s reliance on oil in favor of lower-emission vehicles that use electricity, natural gas or biofuels.
And his analysis, which compared prices by utility service territory, showed that customers enrolled in the lowest fixed-rate plans saved an average of 34% on their energy supply charges compared to the utility’s default rate.
In 1996, the average supply portion of an electric bill was 6.7 cents per kilowatt-hour – the equivalent of 13.4 cents today when adjusted for inflation. In 2024, utility default supply rates averaged 10.2 cents per kilowatt-hour, while customers who shopped for lower rates paid an average of 6.8 cents.
According to Hanger, Pennsylvania has seen a significant increase in electricity generation over the past 28 years without a single rate case seeking higher rates – a credit he attributes to the competitive market.
That competitive market, he says, has not only lowered prices, but has afforded a broader range of products, and built over 15,000 gigawatts of new generation.
Recounting back to 1994, while serving as PUC commissioner, he noted the energy crisis that resulted in electric supply shortages, rolling blackouts, and skyrocketing rates. “And by the way, we’ve not had a rolling blackout due to inadequate generation since,” he added.
The competitive market must breathe – by allowing prices to rise and fall – and give customers the choices and tools to deal with it, he stated.
He acknowledged the continued need for regulatory oversight, but overall, the system has proven effective for Pennsylvania customers.
“Competition has made Pennsylvania’s electricity supply much cheaper than it was in 1996 and much cleaner,” Hanger told The Center Square in an email. “I encourage electricity customers to go to the shopping guide website, www.papowerswitch.com, that is run by the Pennsylvania Public Utility Commission, to see electricity supply options.”
