By Anthony Hennen | The Center Square
(The Center Square) – Starting in June, households across Pennsylvania will see “sharp increases in energy costs” – dramatically so for some, unless they use less energy to avoid higher costs.
That warning comes from the Pennsylvania Public Utility Commission as natural gas prices rise and the energy-intensive summer months approach. On June 1, the price for electric generation will increase by 6% to 45% depending on customers’ electric utility:
- Citizens’ Electric, up to 9.3667 cents per kWh (26.6%);
- Met-Ed, up to 7.936 cents per kWh (16.1%);
- Penelec, up to 8.443 cents per kWh (35.4%);
- Penn Power, up to 8.694 cents per kWh (22.7%);
- PPL, up to 12.366 cents per kWh (38.3%);
- Wellsboro Electric, up to 9.592 cents per kWh (23.7%); and
- West Penn Power, up to 8.198 cents per kWh (44.6%).
The rate increase is still being finalized for other utilities such as Duquesne Light and PECO, which serve the Pittsburgh and Philadelphia areas. Press Secretary Nils Hagen-Frederiksen said PUC expects those increases to be at least 6%, if not more, based on their estimates.
While the generation cost will increase dramatically in some cases, that does not mean a typical bill will go up by the same amount. The generation cost is 40-60% of the average customer’s bill.
“If you’re talking about average usage, you’re likely only going to see about half of the price change impacted on your total bill,” Hagen-Frederiksen said. “But, the caveat is, we’re moving into summer—and summer is peak electricity usage time in Pennsylvania.”
By law, utilities cannot make a profit on electric generation; those costs are only passed through to customers. The higher prices reflect rising natural gas prices as affected by the pandemic and global conditions such as Russia’s invasion of Ukraine.
“It’s just been an unprecedented period of rising prices,” Hagen-Frederiksen said.
In the short-term, natural gas prices hit $7.84 per million BTU on May 3, a 2.6x increase compared to a year ago, when prices were at $2.96. As a result, the cost of generating power has climbed. In the long-term, though, natural gas has become much cheaper; prices have fallen from a peak of $8.86 in 2008.
The PUC encourages the public to shop around and compare energy companies to avoid high rate increases using its PAPowerSwitch website. Pennsylvanians can also join the Standard Offer Program, which guarantees customers a fixed-rate price that is 7% below their utility’s current price for a year.
Energy conservation matters, too.
“It’s also an opportunity for consumers to have an impact on their usage,” Hagen-Frederiksen said. “The kilowatt of electricity that you don’t use is the cheapest electricity you’ll ever have.”