Why your electric bill is rising this winter and how to prepare

As residents in Western Pennsylvania finish hanging their holiday lights, electric companies warn that an estimated 1.3 million customers will be hit with higher bills and should prepare accordingly.

This week, the Pennsylvania Public Utility Commission announced forthcoming adjustments to energy supply rates for all state-regulated electric utilities in December.

Among the companies affected are Duquesne Light, whose supply rate will increase by 10.6%, and West Penn Power, whose rates will rise by 6.1%.

Duquesne Light serves more than 600,000 people across Alle­gheny and Beaver counties.

West Penn Power serves more than 725,000 customers across 24 counties within central and Southwestern Pennsylvania, according to the companies’ websites.

“Understanding your bill and the cost of energy is important,” said Matt Neistein, a Duquesne Light spokesman. “People should understand what they’re paying for and why.”

While the causes of the increase may seem frustrating and confusing, Neistein said, utility companies are not profiting off the rise.

Instead, he said, the increase comes from one of two parts that make up monthly utility bills.

The first is the supply charge for the cost of the actual electricity customers use.

The second is a charge from the electric company for delivering electricity to a home, Neistein said.

In December, the supply charge is the part of the bill that is increasing.

Duquesne Light’s price is rising from 12.42 cents to 13.75 cents per kilowatt-hour, according to the PUC.

West Penn Power will increase from 10.32 to 10.95 cents per kilowatt-hour, according to Lauren Siburkis, spokeswoman for West Penn Power.

So what causes the increased rate?

Each year, PJM Interconnection, a regional body that ensures utilities have enough power to supply customers, holds an auction that sets the price PJM pays power generators. The price for the electricity that is generated is, in turn, passed on to utilities and then to consumers.

PJM coordinates electricity in Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

July’s auction led to a 22% increase in capacity costs that drive the rate hikes that homeowners see, as reported previously by TribLive.

Twice a year, during the summer and winter, the PUC adjusts energy supply prices for all state-regulated electric utility companies to account for the last auction and increased usage during high-demand seasons.

Municipalities that operate their own municipal electric system do not change rates midyear, unlike PUC-regulated utilities, said Tarentum Borough Manager Dwight Boddorf.

Instead, areas such as Tarentum adjust rates once per year in January “based on wholesale power costs, capacity charges and long-term planning,” he said.

This year, Tarentum’s residential all-in rate was 17.0 cents per kilowatt-hour. In 2026, residents will see a 5% increase to 17.85 cents per kilowatt-hour, Boddorf said.

Tarentum is one of 35 Pennsylvania boroughs that operate their own electric companies, according to the Pennsylvania Municipal Electric Association.

Prior to the pandemic, PUC spokesman Nils Hagen-Frederiksen said, PJM’s auction prices were steady.

Since then, the price of power has surged because of international conflicts, growing energy consumption and the rising price of natural gas, which made up 43% of electricity generation in 2023, according to the U.S. Energy Information Administration.

In February, TribLive reported that industries such as artificial intelligence companies require large amounts of electricity to power data centers full of computer servers, network equipment and cooling systems, which contributes to the growing need for energy.

While Duquesne Light’s 10.6% increase may seem like a large jump, it is not the highest the rate has risen over the past three years.

In December 2022, Duquesne Light’s supply rate increased by slightly more than 20%.

And just six months prior, in June 2022, West Penn Power’s supply rate increased by just under 45%, according to PUC’s semiannual reports.

While rate changes aren’t out of the ordinary, Hagen-Frederiksen said the PUC doesn’t want to catch people by surprise when their bills reflect the rate changes in about six weeks.

Managing the increase

Hagen-Frederiksen said lowering the thermostat by one degree can impact around 3% of usage and lower a monthly bill.

West Penn Power offers a few different payment plans.

The Equal Payment Plan makes resident customers’ monthly payments consistent throughout a 12-month billing period and is designed to level out seasonal highs and lows. Customers using this plan are billed one-twelfth of their annual estimated usage each month, according to West Penn Power’s website.

Customers can also go to West Penn Power’s website and input information such as household income and state to see a full list of the billing assistance programs they qualify for.

Residents who have Duquesne Light as their utility company can apply for the Customer Assistance Program, which gives low-income customers access to a reduced monthly bill, debt forgiveness and security deposit waiver, according to Duquesne Light’s website.

Duquesne Light also offers home weatherization programs that provide free help from experts with everything from caulking and weatherstripping to tuning up the furnace to stay warm.

Customers can see a complete list of Duquesne Light’s assistance programs on the company’s website.