Pennsylvania is the third-largest energy producer in the United States, but southeastern Pennsylvania households are paying more for electricity anyway.
Pennsylvania electric bills have gone up 20% in the past two years, severely outpacing inflation.
The cost of power is rising because the regional grid is tight: Demand is growing faster than new supply, which makes wholesale prices go up. Utilities then pass those higher supply costs through to customers.
Where the increase comes from
PECO, Met-Ed, and PPL deliver your electricity, but don’t generate most of it.
The power itself comes from a market covering 13 different states and Washington DC, serving 67 million people. That market is run by a nonprofit called PJM Interconnection, which keeps the regional grid balanced.
When you turn on the air conditioning on a hot afternoon, PJM must match electricity supply and demand in real time. Much of that power was scheduled the day before—but the guarantee that enough would be available was arranged years earlier in capacity auctions.
That’s the part nobody sees. Long before a hot afternoon arrives, PJM pays power plants to promise they’ll be ready for it on the worst days of the summer or the coldest mornings in the winter, whether or not anyone ends up needing that electricity.
It works like a retainer. The plant gets paid to be available. Even if it doesn’t send that energy out into the world, it still gets paid.
PJM buys those promises at auction. Plants bid against each other, and the cheapest bids win. That cost is split among everyone in the region who uses electricity, and it lands on your bill via supply charge.
Those promises aren’t the biggest piece of what you pay. PJM told The Keystone the electricity itself makes up a larger share of the wholesale price. But the promises are where trouble shows up first, because they’re a bet on what the region will need years from now.
In July, PJM held the auction covering mid-2028 through mid-2029. The price hit the ceiling federal regulators and the 13 state governments had set, $325 per megawatt day, for the third auction in a row.
Even at that maximum price, the commitments came up 6,831 megawatts short of what PJM said the region needs to stay reliable.
“PJM’s core responsibility is maintaining grid reliability,” a spokesperson for the company told The Keystone. “PJM cleared enough reserves to serve expected demand, but the amount fell short of the reserve requirement, which is the measurement of how much PJM aims to procure to serve reliability needs in a specific future period.”
When more people need electricity than the grid can easily supply, the price of each unit of power goes up. Pennsylvania utilities are allowed to pass those higher supply costs on to customers—so even if your usage doesn’t change, your bill can rise when the grid is strained.
Compounding the issue, a strain on the energy grid leads to grid instability—which could show up for customers in rolling blackouts or lost power during storms.
Why gas plants can’t get built soon enough
Developers are responding to the shortage. To build a power plant, you first need permission to plug it into the grid, which means applying to PJM and waiting for your turn to get studied. When PJM reopened the application process this spring after a four-year backlog, over 811 projects applied.
Natural gas applications led by a wide margin, at 106 gigawatts of proposed capacity. One gigawatt equals 1,000 megawatts.
The problem with these gas projects is that the engines they need to power them do not currently exist.
Gas plants run on industrial turbines. Industrial turbines are, essentially, stationary engine jets that spin a generator. Three companies (GE Vernova, Siemens Energy, Mitsubishi Power) build most of the world’s large turbines, and their backlog is full. GE Vernova told investors that it expects to have 125 gigawatts of gas equipment under contract by the end of the year.
It can only build 20 gigawatts a year, with expectations they can build 30 a year by 2030. If that uptick holds, that means a backlog of roughly five years.
Siemens Energy, another builder, has a backlog of almost 70 gigawatts.
A utility that ordered a turbine today would have to wait until the end of the decade to receive it.
What can we build instead?
The same list of applications to hook up to the PJM grid also tells a different story. Of those 811 projects, 536 are solar, battery storage, or a combination of the two. Battery projects alone account for 67 gigawatts across 349 different proposals
Under new PJM rules, a developer has to put money down and prove it controls land before PJM will study the project, so that means these aren’t speculative proposals and projects.
The difference in these projects and gas is time. Since 2010, the average American battery project has taken about 1.69 years to go from development to operation, compared to four years for a natural gas plant, according to US Energy Information Administration data.
The intergovernmental International Energy Agency found a similar conclusion that put the timeline at two years in the United States, and found that batteries reach service faster than gas plants. Solar runs on a similar schedule.
The IEA’s caveat is that permitting, financing, and grid connection determines the timeline, as opposed to construction. That means solar and batteries could reach consumers faster than gas plants, if permitting and grid-connection rules are streamlined enough to let them move.
What the delay costs Pennsylvania
The obstacle is getting projects approved and plugged in. Getting them plugged in is called interconnection. That involves the studies, equipment upgrades, and paperwork required before a finished project can send power to the grid. That can take years.
Under PJM’s process, the company said the expected turnaround to a connection agreement is one to two years, with faster offramps for shovel-ready projects.
PJM said the holdup isn’t on its end.
“Once PJM has approved connection, some developers have encountered hurdles to connection, including supply chain backlogs and permitting and siting challenges,” the company spokesperson said. “We currently have 51 gigawatts of projects that could plug in today, but some are not building because of the challenges they meet after they exit the PJM process.”
A study by consultancy group Grid Strategies, sponsored by Advanced Energy United, said PJM’s slow pace will cost consumers as much as $7 billion this year alone by driving up the auction prices. A power plant that cannot plug in cannot compete to lower your bill.
Building and connecting those projects is electrical and construction work, and that happens where the projects are.
Since 2025, the legislature has been divided over where new energy projects can be built and how fast they should be approved.
While you wait
PJM sets wholesale costs only. Your retail bill includes distribution charges and other costs set by PECO and approved by state regulators.
Pennsylvanians have control over three things right now.
First, you can shop for your supplier. PAPowerSwitch.com is run by the state’s public utility commission. It lists every licensed supplier side by side. Make sure to read the term length and cancellation fee.
Second, be sure you’re taking advantage of rebates. The federal tax credit for heat pumps and insulation expired on Dec. 31, 2025. The One Big Beautiful Bill Act, passed by Republicans and signed into law by President Donald Trump, axed those credits from continuing. PECO rebates do remain, though. Those are funded through state efficiency programs put in place by Act 129.
Third, contact your representatives. Members of the US Senate and US House of Representatives have the power to regulate businesses and influence energy policy. Anything from reintroducing things like solar energy subsidies to changing the permitting process to get energy producers online quicker could positively affect your energy bill. Find who represents you in Congress here.
Legislators in Harrisburg write and vote on laws that shape how utilities are regulated, too, along with how much clean energy the state will support, and the kinds of protections or programs ratepayers get. Find your legislators here.
