What Are the Charges On My PA Utility Bill?

In PA, your electricity service is divided into two main charges: the electricity supply and distribution.

  • Distribution Charge -- this charge is comprised of a flat customer service fee per account and the cost in cents per kWh to deliver electricity your local utility's grid to homes and businesses. All customers in your utility's service area pay the same rate no matter who supplies their electricity.
  • Generation Charge -- the cost in cents per kWh for electricity that the customer buys from their electricity supplier. Electricity customers who do not signed with a retail supplier receive their Generation Supply from their local utility at a default rate also known as the Price to Compare or PTC.

What is the Price to Compare?

The PTC default rate represents the actual price your local utility pays for the electricity that it supplies to its customers. It not only includes the generator company's price for making the electricity but also the cost to transmit it from their power stations over high tension power lines to your local utility's electrical switch yards. The transmission charge rate is based on federally regulated charges.

In Pennsylvania, utilities set their PTC rates by holding periodic auctions to line up their electricity supplies for different parts of the year. Usually that means one for summer and one for winter. When the auctions are completed, the PA PUC must approve the prices for both the generation supply and transmission charges. Some utilities list these charges separately while others do not. Because retail suppliers already factor transmission costs into their pricing, it's already added to their Generation Supply prices.

Customers paying the PTC default rates can expect their electricity rates to change seasonally, and for some companies up to three times a year.

Is the Supplier's Rate Better than the PTC?

Not always. Rate prices depend on several things:

The price of natural gas. Since naturlal gas fuels about half of Pennsylvania's power plants. This affects everyone's rates.

The time of year. Temperature is the major driver of demand. That's why prices are higher during summer and winter but lower during milder seasons like spring and fall. These are the so-called "shoulder months". Since there's little demand for energy to heat or cool homes so electric prices go lower. PTC rate auctions are set up so they can't take advantage of shoulder month pricing --- but retail suppliers can.

Fixed Rates mean price security. Because PTC rates change (up to 3 times a year in some cases) retail suppliers offer the best solution with a fixed rate plan that shields you from fluctuations in the PTC rate. For example, if you are shopping for a new plan in the spring and learn that our local utility will raise it's PTC rate on June 1, then you want to quickly grab a fixed rate plan that will not only lock in a low rate but also carry you past the increase period for at least a year. That way, your fixed contract will end next spring and you can shop shoulder month pricing again.

How long of a plan term do you need? No matter what anyone tells you, month-to-month plans can change rates each month. Meanwhile, short term fixed rate plans provider a nice way to try-out a supplier, but sometimes they can cost a little more. Year-long (or longer) fixed rate plans usually have the lowest rates but long commitments aren't for everyone and these sometimes come with expensive early cancellation fees.

What Types of Surcharges Are On My PA Electric Bill?

The 11 different utilities in PA have a variety of surcharges with their month bills. Your monthly bill from your local utility may contain some of the following:

  • Distribution System Improvement Charge or DSIC (also called "System Improvement Charge") - A monthly charge to recover costs for modernizing, repairing, and replacing equipment that delivers electricity to your home or business.
  • State Tax Adjustment Surcharge - A charge, or a credit, or electric rates to reflect changes in various state taxes included in your bill. The surcharge may vary by bill component.
  • Consumer Education Charge - A monthly charge for ongoing consumer education concerning your bill, shopping for electricity, energy efficiency and conservation.
  • Solar Requirements Charge - Charge from your utility to acquire Solar Photovoltaic Alternative Energy Credits to comply with the Alternative Energy Portfolio Standards Act.
  • Default Service Support Charge (FirstEnergy) - Charge to recover new and deferred costs associated with serving customers in a competitive market.
  • Non-Utility Generation Charge (Penelec) - Charges to cover an electric utility's costs associated with contracts with non-utility-owned generation.
  • Universal Service Fund Charge (USFC) (PECO) - This charge recovers the costs associated with low-income programs.

Help Paying Your Bill

All local utilities in PA are required to offer a Customer Assistance Program (CAP). Customers must enroll in CAP and make monthly payments to the utility based on household size and gross income. Customers make regular monthly payments that they can afford, which can be less than the amount they owe. In exchange, your local utility may reduce the amount they owe. Some local utilities also offer cash assistance to customers through a charitable fund set up by their employees.

Customers having problems paying their bills should call their utility's customer service.

Other programs include:

  • Customer Assistance Referral and Evaluation Program (CARES)
  • The Low-Income Usage Reduction Program (LIURP)
  • Low-Income Home Energy Assistance Program (LIHEAP) ??" is a federally-funded program that helps low-income households pay their home heating and cooling bills.
Table of Contents: