Understanding Pa.’s energy market – and your electric bill

In Pennsylvania, with its competitive marketplace, consumers have been able to choose their electric service provider for more than 25 years. That means residential and commercial customers can compare electricity supply plans to maximize savings, opt for renewable and sustainable options, or choose a supplier that offers the best overall value for a home or business.

But supplier rates are only half the story. That’s because your electric bill is broken up into two parts:

• Transmission & Distribution

• Electric Service Provider (Supplier)

The state’s 1996 electric choice act deemed it in the best interest of the public for transmission (or the movement of large amounts of high voltage electricity across long distances) and distribution (the building and operating of poles, wires, and substations) to remain a “natural monopoly” subject to regulation and oversight by the Pennsylvania Public Utility Commission.

Transmission and distribution are managed regionally by legacy utility companies like Citizens Electric, Duquesne Light, Met-Ed, PECO, Penelec, Penn Power, Pike County L&P, PPL, UGI Electric, Wellsboro Electric and West Penn Power.

While you have the power to choose your supplier and maximize aspects that matter most to you, you have little to no control over what you pay utilities for transmission and distribution – and those costs are rising. According to Pennsylvania Public Utility Commission, the portion of your electric bill that isn’t tied to generation has surged by 25% since 2011, even after adjusting for inflation.

Higher energy bills over the last 10 years are a reflection of growing spending by local utilities on transmission and distribution systems. On the supply side, however, Pennsylvanians who have taken advantage of the state’s competitive energy market are paying roughly the same for electricity in 2024 as they did in 1996.

Transmission and distribution costs remain a challenge. But competition puts power where it belongs — in the hands of consumers.