PECO is asking state regulators for a 12.5% increase in what it charges to deliver electricity in the Philadelphia region, a move the company says would push a typical household’s monthly bill up by about $20 starting in 2027. The utility is also seeking an 11.4% hike in suburban natural-gas delivery rates on roughly the same schedule. PECO argues the money is needed to shore up aging lines and cut down on outages as severe weather hits more often. The filings launch a months-long review at the Pennsylvania Public Utility Commission that will decide how much customers actually end up paying and how much the company has to scale back, as reported by WHYY.
What PECO Is Asking For
On Monday, PECO filed two formal requests with the Pennsylvania Public Utility Commission, seeking about $429 million in additional electric distribution revenue and roughly $81 million for natural-gas system upgrades. According to the company, that level of increase would raise the average electric customer’s bill by $20.08 per month and the typical suburban gas customer’s bill by $14.52.
PECO has floated a plan to spread some of the increases over six years to blunt the initial hit. The utility says that approach would reduce costs to ratepayers by $88 million in 2027 compared with raising everything at once. These specifics were outlined by WHYY.
Why PECO Says It Needs The Money
The company says the higher rates would bankroll a five-year push to modernize its energy systems. That includes replacing leaky gas mains, upgrading substations in Center City and surrounding neighborhoods, and installing technology that is supposed to shorten or even prevent outages.
Financially, PECO is not exactly running on fumes. In a Feb. 12 earnings release, parent company Exelon reported that PECO’s net income climbed to $814 million in 2025. Exelon also laid out multi-billion-dollar capital investment plans that flow into local rate cases like this one. Those earnings figures and the broader capital strategy are detailed by Exelon.
Return On Equity And The Rate Math
At the center of the case is what kind of return PECO’s investors should earn. In its filing, the utility is asking for a 10.95% return on equity, a key piece of the formula that ultimately sets customer rates. PECO warns that without new rates its return would sink to around 5.7%.
Pennsylvania’s consumer advocate has urged regulators to land lower, in the range of roughly 8.5% to 9.5%. Academics and policy groups have also questioned how high investor returns really need to be in a regulated utility world. Those competing claims are front and center in the regulatory fight, as reported by WHYY.
What Happens Next
The Pennsylvania Public Utility Commission will assign a docket number, gather formal interventions from consumer advocates, local governments, and other stakeholders, hold hearings, and eventually issue an order. That process typically stretches over many months, with multiple rounds of testimony and rebuttal.
Members of the public can follow along and participate. Once the docket is posted and hearings are scheduled, residents can submit written comments or petitions to intervene in the case. The Pennsylvania Public Utility Commission document search page lists filings and docket activity as they come in.
Why It Matters For Philadelphia Households
Consumer advocates warn that another set of increases would stack on top of earlier hikes and hit households already straining under higher energy and living costs. Some critics argue that regulators should take a hard look at the timing and size of PECO’s request, pointing to the company’s rising earnings and parent-company compensation figures as reasons for extra scrutiny.
Exelon’s earnings materials, which show PECO’s 2025 results, have become a central reference point in local debates over how much more the utility should be allowed to collect. Those documents are available from Exelon.
