Compare the Best Duquesne Light Company Energy Rates

What Happened: A severe winter storm hit Texas and Oklahoma, causing widespread natural gas production freeze-offs and multi-day blackouts affecting millions.

Impact on Duquesne Light: While Pennsylvania wasn't directly affected by the freeze, the event caused nationwide natural gas price spikes that rippled through all electricity markets.

Rate Movement: Duquesne Light rates remained relatively stable at 7.07¢/kWh during the immediate aftermath but began climbing by mid-2021 (7.41¢) as the broader impacts became clear.

Why It Mattered:

• Exposed infrastructure vulnerabilities to extreme weather
• Depleted natural gas storage inventories nationally
• Set the stage for the 2022 crisis by creating supply tightness
• Demonstrated interconnected nature of US energy markets

Rate Movement: June-November 2021 saw rates edge up from 7.41¢ to 7.41¢ (stable), but December 2021 jumped to 7.98¢ (+7.7%).

Global Context:

• Russia began restricting gas supplies to Europe in late 2021
• European natural gas prices soared by over 500%
• Economic recovery from pandemic increased demand faster than supply
• US LNG exports began increasing to serve European demand
• Natural gas storage remained below normal after Winter Storm Uri

The Warning Sign: The December 2021 rate increase signaled the end of the stable era. Pittsburgh consumers were about to be connected to global energy turmoil.

The Catalyst: Russia's full-scale invasion of Ukraine triggered the first truly global energy crisis, fundamentally restructuring world energy markets.

Key Facts:

• Russia supplied 45% of EU's natural gas imports before the war (185 bcm annually)
• European gas prices reached levels 10x higher than the previous 15-year average
• Russia reduced exports to Europe by 150 bcm in 2022
• US became Europe's crucial LNG supplier overnight
• Energy was weaponized as a tool of geopolitical coercion

Duquesne Light Rate at Feb 2022: 7.98¢/kWh, but this would surge dramatically as wholesale gas markets exploded.

The Permanent Shift: This event permanently linked Pennsylvania electricity prices to European energy security, Middle East tensions, and Asian LNG demand.

Dramatic Jump: June 2022 rates hit 9.36¢/kWh, a +17.3% increase from December 2021's 7.98¢.

What Drove This:

• Russia further curtailed gas exports to Europe
• US LNG exports surged to fill the gap (72% to Europe vs 29% historically)
• Domestic natural gas prices rose as supply went overseas
• Wholesale Henry Hub prices climbing toward $9.85/MMBtu peak (reached Aug 22)

Freeport LNG Explosion (June 8, 2022):

• Major US export terminal (17% of capacity) shut down
• Created paradox: US spot prices fell, but electricity rates kept rising
• Europe's energy crisis worsened (less LNG available)
• Utilities locked into high-price contracts couldn't benefit from lower spot prices

Consumer Impact: Pittsburgh-area households saw their electricity costs jump by over $15/month for average usage, with more increases coming.

Massive Spike: December 2022 rates jumped to 11.25¢/kWh, a +20.2% increase from June's already-elevated 9.36¢.

Crisis Metrics (2022):

• Henry Hub natural gas peaked at $9.85/MMBtu (Aug 22, 2022)
• Historical price volatility: 171% (highest since 1994)
• European natural gas exceeded 200/MWh
• Average 2022 Henry Hub: $6.45/MMBtu (highest since 2008, +53% YoY)
• Nord Stream pipeline sabotaged (September 2022)

Why Rates Exploded:

• Utilities passing through extreme Q3 2022 gas procurement costs
• Unprecedented market uncertainty and volatility
• Europe's desperate competition for LNG raising all prices
• Storage costs inflated by crisis-level pricing

The 59% Increase: From baseline 7.07¢ (Dec 2020) to 11.25¢ (Dec 2022), Pittsburgh customers saw rates increase 59% in just two years.

Rates Remain Elevated:

• December 2022: 11.25¢/kWh
• June 2023: 11.45¢/kWh (slight increase)
• December 2023: 10.46¢/kWh (modest decline)

Natural Gas Price Decline:

• January 2023: Fell 41% from December 2022
• Average 2023 Henry Hub: $2.66/MMBtu vs $6.54 in 2022 (down 59%)
• European gas prices dropped from 200+ to ~30/MWh
• Europe's gas storage reached record highs (90%+)

The Lag Effect in Action: Despite wholesale natural gas returning to near-normal prices, Duquesne Light rates remained 48-62% above pre-crisis levels throughout 2023.

Why Rates Stayed High:

• Contract Timing: Utilities purchased gas in 2022 at crisis prices on long-term contracts
• Storage Costs: Gas stored at $6-9/MMBtu being consumed in 2023
• Regulatory Lag: Rate adjustments take 6-12 months for approval
• Cost Recovery: Utilities recovering under-collections from crisis period
• Infrastructure Investment: Grid resilience upgrades being amortized

Rate Fluctuations:

• December 2023: 10.46¢/kWh
• June 2024: 10.53¢/kWh (relatively stable)
• September 2024: 11.85¢/kWh (+12.5% jump!)
• December 2024: 10.85¢/kWh (moderation)

Natural Gas Context (2024):

• Q1 2024: $2.10/MMBtu (near record lows)
• Price volatility remained 50% above pre-2022 historical norms
• Winter Storm Heather (January 2024) caused temporary spikes
• Continued high LNG export demand maintained structural price support

The September Surprise: The sudden 12.5% jump to 11.85¢ in September 2024 demonstrated that volatility remains a permanent feature of the new energy market reality.

Why Volatility Persists:

• Global LNG markets remain tight with limited spare capacity
• Geopolitical tensions (Ukraine, Middle East) create supply uncertainty
• Weather extremes drive demand spikes
• US domestic prices now swing with international events

All-Time High: June 2025 hit 12.43¢/kWh, the highest rate in Duquesne Light's modern history.

Rate Progression:

• December 2024: 10.85¢/kWh
• June 2025: 12.43¢/kWh (+14.6% increase!)
• November 2025: 12.43¢/kWh (sustained peak)

The 75.8% Reality: From the 7.07¢ baseline (Dec 2020) to 12.43¢ (June 2025), Pittsburgh-area customers are paying 75.8% more for electricity.

Why 2025 Peaked Years After the Acute Crisis:

• Full Cost Flow-Through: All 2022-2023 high procurement costs finally passed to customers
• Infrastructure Recovery: Billions in grid modernization costs amortized into rates
• Regulatory True-Ups: Years of under-recovery being corrected
• Structural Market Changes: Higher baseline costs from globalized gas markets

Natural Gas Outlook (2025-2026):

• Forecast: $3.00-4.10/MMBtu (structurally higher than 2017-2020)
• US LNG export capacity doubling by 2028
• Volatility to remain 50-90% above historical norms
• Ongoing Ukraine conflict maintaining geopolitical risk premium

The New Normal: Rates will likely stabilize in the 10.50-12.50¢/kWh range but won't return to pre-2021 levels. The era of 7¢/kWh electricity in Pittsburgh is permanently over.

Consumer Impact: A Pittsburgh household using 1,000 kWh/month now pays approximately $124/month vs $71/month in 2020 - an additional $53/month or $636/year.