Pennsylvania’s default electricity rate just posted its third straight double-digit year-over-year jump. The state’s own fiscal office says the culprit isn’t utility delivery charges anymore. It’s what’s happening on the wholesale market.

Pennsylvania residential electricity prices keep climbing, and the state’s latest official tally suggests utility delivery costs are no longer the main driver. Rising wholesale energy and capacity prices across the PJM Interconnection are increasingly setting what customers pay. According to a July 2026 research brief from Pennsylvania’s Independent Fiscal Office, the weighted residential Price to Compare, which reflects the generation and transmission portion of default electricity service, rose to 12.61 cents per kilowatt-hour for June through November 2026, up 11.9% from the same period a year earlier. It’s the third consecutive six-month period of double-digit year-over-year growth in that rate.

Wholesale Markets Are Driving the Increase

Much of the increase traces back to higher wholesale electricity prices within PJM, where utilities buy power before delivering it to customers. PJM wholesale prices averaged $82.30 per megawatt-hour in 2025, up 48.3% over 2024, and climbed another 75.5% in the first quarter of 2026 compared with the same quarter a year earlier. Energy prices remain the biggest driver of that wholesale bill, up 50.1% in 2025 and 78.5% in the first quarter of 2026. Capacity prices posted even steeper gains, rising 263.2% in 2025 and 398% year over year in the first quarter, reflecting tighter reserve margins as PJM projects demand will outpace available supply. Because capacity is a smaller share of the total wholesale bill than energy, its effect on retail rates has stayed more contained despite those swings.

Data Centers Are a Growing Factor Behind That Bill

Neither the IFO brief nor PJM’s own market data isolates a single cause, but the numbers point toward data center growth as a major factor behind the capacity price spike. PJM’s December 2025 capacity auction cleared at $16.4 billion, up from $14.7 billion in 2024 and just $2.2 billion two years earlier, and data center load accounted for roughly 40% of those costs. Capacity prices for the 2025-2026 delivery year reached about $270 per megawatt-day across most of PJM’s footprint, up from roughly $29 the year before, and the 2026-2027 delivery year cleared at PJM’s regulatory cap of $329 per megawatt-day, part of the same grid scarcity now shaping facilities project timelines across the region.

Generation Now Outweighs Delivery on the Typical Bill

Residential prices break down into two broad pieces: generation and transmission, and distribution and other charges. For June through November 2026, the average residential price of 21.95 cents per kilowatt-hour splits into 12.61 cents on the generation side and 9.34 cents for distribution, meaning that supply-side share now makes up roughly 57% of a typical bill against 43% for distribution, customer charges, and other fees. Since mid-2025, those generation and transmission costs have climbed substantially faster than distribution charges, a sign that wholesale market conditions, not local utility infrastructure spending, are driving most of the recent increase. Using a household consuming 1,200 kilowatt-hours a month, the IFO estimates the average monthly bill has climbed from $191 in 2022 to $257 in 2026, a 34.9% increase, while regional inflation over the same span rose just 16.3%.

The report focuses on residential rates, but the same wholesale dynamics reach the large commercial and industrial customers that make up much of PJM’s footprint, the same pressure now showing up as manufacturers compete directly with data centers for available capacity. That leaves procurement teams watching a different scoreboard than they used to. Contract timing and wholesale market monitoring now matter more for a PJM energy budget than negotiating delivery rates ever did.