PHILADELPHIA, PA — As residents of Southeastern Pennsylvania brace for the peak of the 2025–2026 winter heating season, a dual-fronted financial storm has arrived in their mailboxes. A combination of historic state-approved distribution rate hikes and skyrocketing wholesale capacity costs has driven total PECO electricity bills up by nearly 19% year-over-year for many households.
On this Friday, December 19, 2025, with temperatures dropping across the Delaware Valley, the reality of the “New Energy Economy” is setting in. For an average residential customer, the monthly cost of keeping the lights on and the heaters running has jumped by an average of $20 to $30 compared to just 12 months ago.
The Perfect Storm: Why Rates Are Surging
The 19% spike is not the result of a single event but rather a “perfect storm” of regulatory approvals and regional grid pressures that converged in late 2025.
1. The January 2025 Distribution Increase
Last year, the Pennsylvania Public Utility Commission (PUC) approved a settlement that allowed PECO to increase its annual operating revenue by $354 million. While this was lower than the $464 million PECO originally requested, it still resulted in a 10% jump in the distribution portion of residential bills starting in January 2025. This portion of the bill covers the “poles and wires”—the physical infrastructure required to deliver power.
2. The PJM Capacity Crunch
The most significant driver of the recent year-over-year spike is the cost of the electricity itself. The regional grid operator, PJM Interconnection, held a capacity auction that resulted in record-high prices.
- The Cause: The retirement of older, fossil-fuel power plants combined with a massive surge in demand from AI data centers and electric vehicles.
- The Result: The “Price to Compare” (PTC)—the default rate for customers who don’t shop for a third-party supplier—rose to 11.024 cents per kWh on December 1, 2025. This is a staggering 23% increase from the 8.92 cents per kWh rate seen in early 2024.
Breaking Down the 2026 Winter Bill
For a typical household using 850 kWh per month, the math is sobering. In December 2024, that customer might have seen a total bill hovering around $165. By December 2025, that same usage now commands a bill of roughly $196 to $205, depending on specific surcharges.
| Component | Dec 2024 Rate (Est.) | Dec 2025 Rate | % Change |
| Supply (Generation) | 9.27¢ / kWh | 11.02¢ / kWh | +18.9% |
| Distribution | $10.50 Base | $14.28 Base | +36.0% |
| Total Bill (850 kWh) | ~$168.00 | ~$202.00 | ~20.2% |