PITTSBURGH (TNS) — Electric bills for Pennsylvania customers will increase starting Wednesday as utilities pass along the higher cost of electricity to consumers.
Electric company customers in western Pennsylvania will see supply charges — the part of their rate that’s tied to the cost of fuel — increase from 4.5% to about 7.7%. The increases are called “price to compare.”
A utility’s price to compare is just one portion of the total bill, typically between 40% and 60%, according to the Pennsylvania Public Utility Commission. Other costs include the distribution charge, which funds the utility’s maintenance of its infrastructure, and surcharges like those used to fund capital improvements.
By law, Pennsylvania utilities are not allowed to make a profit on the sale of electricity or natural gas, and customers are allowed to shop around for their supply through brokers outside of the utility. Utilities provide their price to compare to make it easier for customer to evaluate competing suppliers. Those who choose not to shop elsewhere end up as the utility’s default generation customers, which means they pay what the utility pays for their power.
The reasons electricity generation prices are going up is because, like many commodities, industrial supplies and consumer goods, the fuels used to make electricity at power plants have risen in price.
The most common fuel that drives power plants on the regional grid is natural gas.
And while the glut of it pulled from shale layers across Appalachia and in other regions of the country has kept natural gas prices down for years, that price tag has risen substantially over the past year.
The price of natural gas futures on the New York Mercantile Exchange — an indication of what buyers are paying for gas contracts for the next 12 months, is now around $4.25 per million British thermal units. It hasn’t been this high since 2014.
This also means natural gas utility customers are seeing, and will continue to see, increases in their bills.
Natural gas utilities, such as North Shore-based Peoples Natural Gas, adjust the gas cost portion of customers’ bills every quarter to match what the utility is paying for the commodity.
The Peoples Natural Gas “price to compare” on Tuesday was $4.80 per thousand cubic feet, higher than it has been at any point during the past three years.
Its next adjustment will be on Dec. 31.
The Pennsylvania Public Utility Commission is urging consumers who are having financial trouble to contact their utilities and ask about customer assistance programs and payment plans.
