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Prepare to pay more for electricity after Pennsylvania approves Peco rate increase

The monthly bill for a typical residential customer will increase by 6.6%. That's $6.66 more per month, from $100.29 to $106.95.

Peco Energy electric bills will be going up by 6.6% on Jan. 1.
Peco Energy electric bills will be going up by 6.6% on Jan. 1.Read moreMaksim Shchur / Getty Images/iStockphoto

Peco Energy electric bills will increase about 6.6% on Jan. 1 under a proposal the state approved Thursday, which also enhances the Philadelphia utility’s support for electric vehicle charging infrastructure.

The Pennsylvania Public Utility Commission approved the rate increase, which is about two-thirds of what Peco requested in March. The rate plan resulted from a negotiated settlement between Peco, the PUC staff, and advocates representing various customer groups.

The typical residential bill for a customer using 700 kilowatt hours a month will increase by $6.66, from $100.29 to $106.95. The company’s initial filing would have boosted residential bills by $9.68 a month.

The Philadelphia utility, which serves 1.7 million electric customers in Southeastern Pennsylvania, said the increase is needed to pay for billions of dollars in investment to harden and modernize the local energy grid to accommodate clean energy demands.

Gladys Brown Dutrieuille, the commission’s chair, focused on the inclusion of two new programs aimed at encouraging the adoption of electric vehicles, to speed the transition from gasoline and diesel powered vehicles that emit greenhouse gases and other pollutants.

Peco will provide $1 million for incentives for public transportation charging infrastructure. It will provide an additional $500,000 in grants to offset the costs for public charging and fleet charging infrastructure — up to $2,000 per charging port in much of Peco’s territory, but up to $3,000 per charging port for facilities in “environmental justice areas,” which the state defines as census tracts with significant low-income or non-white populations.

The Peco rate package also includes pledges to boost efforts to increase enrollment in the utility’s Customer Assistance Program, which provides bill support for low-income customers, and a $1 million annual increase, to $6.6 million, in Peco’s budget for programs to help low-income customers reduce energy consumption.

Though bills will increase 6.6%, the rate boost impacts only Peco’s distribution charges, which make up more than half of a typical residential bill.

The increase does not affect energy charges, which some customers buy from third-party suppliers. With the worldwide increases in energy costs this year, most customers have already experienced boosts in their energy charges as higher fuel costs for producing electricity are passed along to consumers. With energy charges included, the actual bills for many customers may actually increase more than 6.6%.