Pennsylvania Energy Consumers Facing Approx. $2.18 Billion Increase in Electric Bills
PJM’s 2025-2026 auction increased energy capacity prices 800%,
putting a significant strain on customers
The past few years have been especially difficult for energy consumers, and DLC’s customers are no exception. The cost of electricity is increasing at unprecedented levels. Additionally, energy demand is at an all-time high and is expected to keep rising with the rapid growth of AI and data centers.
As your electric utility, we want you to know what’s behind these massive price hikes and the steps we’re taking to help consumers.
PJM and the Energy Market
Since 1927, Pennsylvania has been part of PJM Interconnection — a regional organization that operates the transmission system for about 65 million customers across 13 states and Washington, D.C. PJM also oversees an energy marketplace that establishes electricity prices (paid to power plant producers) for residential, commercial and industrial customers in their territory.
Until 2024, Pennsylvania customers enjoyed competitive electricity prices and cost savings from the PJM market. Today, due to the swift growth of data centers and AI; retirement of older power plants; transportation and building electrification; manufacturing plant growth; and a backlog of new generation sources, energy consumers in PJM’s territory are facing astronomically higher electric bills and are running an elevated risk of reliability issues, which could include rolling blackouts.
Capacity Auctions and Customer Impact
PJM conducts capacity auctions for their planning year, which runs from June 1 to May 31 of the following year (e.g., June 1, 2025, to May 31, 2026). The purpose of these auctions is to match electricity supply commitments with customer demand. The price for this energy, which is set by the competitive process, is designed to incentivize both existing generation to stay online and compete in the marketplace as well as the development of new power plants in order to meet the growing demand for energy across PJM’s footprint.
In July 2024, PJM conducted the capacity auction for June 2025 through May 2026, which resulted in an increase from $29.50 per megawatt-day (for June 2024 through May 2025) to $270.35 per megawatt-day — an 800% increase. This significant spike is causing Pennsylvania customers to pay approximately $2.18 billion1 more to power plant owners in PJM’s region.
DLC Doesn’t Profit
DLC is responsible for distributing power to customers, but we don’t generate it. Increased generation costs are collected from our customers and passed directly to power generators without any financial gain for DLC. Learn more about understanding your bill.
Reducing the Price Effects
Last February, Pennsylvania Governor Josh Shapiro and PJM entered into a settlement agreement, creating a “collar” that resulted in a floor (minimum) generation payment price of $175 per megawatt-day and a ceiling (maximum) generation payment price of $325 per megawatt-day for the next two auctions (June 2026-May 2027 and June 2027-May 2028).
Despite the cap, prices jumped significantly again this summer when PJM conducted its 2026-2027 auction, which cleared at the ceiling price of $329.92 per megawatt-day — a 22% increase from the current year’s $270.35 — and raised customer payments to power plant owners by another estimated $538 million.
This December, PJM will conduct its 2027-2028 auction, which will also be subject to the floor and ceiling prices.
DLC understands that resolutions will be introduced in the Pennsylvania House of Representatives and Senate that, if approved, will direct the Joint State Government Commission to conduct a comprehensive study evaluating the costs and benefits of Pennsylvania’s continued membership in PJM. DLC supports these resolutions and looks forward to the study’s findings, which will help inform future discussions around ensuring reliable and affordable electric service for Pennsylvania customers.
Help Is Available
There are many ways that customers can take charge of rising electric costs. These include payment assistance programs, budget billing, shopping for a different energy supplier and looking for special offers on energy-efficient products. Learn more about what resources are available.
1 Estimate of $2.18 billion is based on calculations prepared by the Energy Procurement Management team at Duquesne Light Company, which compared the 2024/2025 results of the Base Residual Auction (BRA) versus the results of the 2025/2026 BRA using publicly available source data from PJM and its market zones. The cost impact estimate includes the market zones for DLC, Met-Ed, Penn Electric, PPL, PECO, a pro-rated APS zone (which includes West Penn Power) and a pro-rated ATSI zone (which includes Penn Power in Pennsylvania). For this high-level analysis, some customer count variance occurs regarding West Penn Power (APS) and Penn Power (ATSI), but the analysis is directionally correct and indicates a reasonable approximation of the costs that impact Pennsylvania customers.