Shapiro Pressures PECO to Drop 12.5% Rate Hike as States Target Utility Profits
Updated
Updated · The Associated Press · May 17
Shapiro Pressures PECO to Drop 12.5% Rate Hike as States Target Utility Profits
6 articles · Updated · The Associated Press · May 17
$20 a month in proposed added charges for the average PECO household became the flashpoint in Pennsylvania after Gov. Josh Shapiro pushed the Exelon unit to withdraw its 12.5% rate increase request.
AI-driven data center demand is fueling a utility construction boom and higher power prices, while officials argue residents are paying into a system that lets for-profit utilities post record gains.
Profits at 110 for-profit utilities climbed from just under $39 billion in 2021 to more than $52 billion in 2024, according to the Energy and Policy Institute, sharpening scrutiny of regulator-approved returns.
At least six states, including Arizona, Indiana, New Jersey and Pennsylvania, are now challenging rate cases or reopening how utilities earn revenue; in Indiana, critics say cutting AES Indiana's requested 10.7% return to 8% would nearly halve its proposed increase.
The fight has reached earnings calls and Wall Street, with utilities warning lower allowed returns could deter investment even as affordability becomes a central political issue in a midterm election year.
Can states curb utility profits without risking the investment needed to power our increasingly digital world?
As AI's power demand soars, who should pay for the trillion-dollar grid overhaul: tech giants or everyday consumers?
With utility profits and consumer bills both rising, is the century-old model for powering America fundamentally broken?
Pennsylvania’s $510 Million Utility Rate Hike Reversal: PECO, Profits, and the Push for Affordable Energy
Overview
In April 2026, PECO withdrew its proposed rate hike, sparing Pennsylvania consumers from what would have been the third increase since 2022 and saving customers an estimated $510 million. This decision, praised by Governor Josh Shapiro, led to the CEO stepping aside and marked a turning point for the company. PECO responded by shifting its strategy to focus on energy affordability, aiming to lower energy supply prices and address rising costs. The move reflects growing public and political pressure for utilities to balance profitability with consumer protection, signaling a new era of accountability and reform in the energy sector.