PECO Proposes Major Rate Adjustments for 2027 Implementation

PECO has formally submitted a proposal to the Pennsylvania Public Utility Commission (PUC) requesting substantial rate increases set to take effect at the start of next year, 2027.

This filing outlines plans for significant funding aimed at long-term investments across the company's local electric and natural gas infrastructure networks.

Impact on Residential Customers

Under the new proposal, a typical PECO residential electric customer could face a monthly bill increase amounting to $20.08, representing a 12.5 percent rise.

Simultaneously, residential natural gas customers are projected to see an increase of $14.52 monthly, which equates to an 11.4 percent hike.

However, PECO officials noted that the 12.5 percent electric rate increase might be partially mitigated. A reduction of $2.30 per month (1.3 percent) is anticipated in April 2027 due to two proposed cost-recovery rate tools.

Justification for Increased Rates

PECO President and CEO David Vahos addressed the proposed changes, stating, “We understand that any increase in costs is difficult for families and businesses, and we don’t take this request lightly.”

Vahos stressed the necessity of these funds to ensure system reliability, noting, “Our customers deserve a system they can count on – especially as severe weather grows more frequent.” These investments are intended to strengthen the grid and reduce service outages.

The funding increase is also earmarked to expand customer support programs and advance service experiences. Officials stated the investments will help modernize aging natural gas infrastructure and assist customers embracing cleaner energy options.

Furthermore, the company seeks to recover an additional $81 million specifically for its natural gas investments. This is intended to maintain and enhance the safety and reliability of both electric and gas systems to meet growing regional energy demand.

Recent Infrastructure Investments Highlighted

PECO pointed to several recent projects demonstrating its commitment to infrastructure improvement across southeastern Pennsylvania:

  • Upper Darby, Pa.: An estimated $66 million upgrade to electric infrastructure now delivers more reliable power to about 7,690 Delaware County customers.
  • Philadelphia: A $56 million investment in a new substation in Overbrook is improving electric service dependability for approximately 17,200 customers across Philadelphia and Montgomery Counties.
  • Center City Philadelphia: A $52 million project retired the Mall and Lombard substations, modernizing the electric system for roughly 2,900 customers.
  • Marple Township, Pa.: A new natural gas reliability station has been established to enhance safety and service reliability for Delaware County customers.
  • Natural Gas Neighborhood Pilot Program: Over 260 neighborhood projects have been completed, extending reliable natural gas service to more than 2,000 new customers.

Efforts to Mitigate Customer Costs

CEO Vahos acknowledged energy cost concerns, emphasizing the need to balance reliability with affordability. “That’s why we’re proposing two rate tools designed to spread certain costs over time, helping to reduce customer bills,” he stated.

PECO claims these proposed mechanisms would spread specific costs over six years, resulting in nearly $300 million in total customer savings, including $88 million projected for 2027.

Context of Contract Expiration

This rate hike announcement occurs as a contract for PECO workers expired on Tuesday, raising the possibility of a strike amidst the company’s push for increased rates.