{"id":284136,"date":"2026-09-11T23:40:08","date_gmt":"2026-09-11T23:40:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-pa\/284136\/"},"modified":"2026-09-11T23:40:08","modified_gmt":"2026-09-11T23:40:08","slug":"pa-commission-to-review-issues-affecting-rate-affordability","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-pa\/284136\/","title":{"rendered":"PA commission to review issues affecting rate affordability"},"content":{"rendered":"

From Philly and the Pa. suburbs to South Jersey and Delaware, what would you like WHYY News to cover? Let us know!<\/a>\n<\/p>\n

The Pennsylvania Public Utility Commission unanimously approved two measures this month intended to address how investor-owned utility\u2019s profits<\/a> and the growth of data centers<\/a> collide with the growing affordability crisis.\n<\/p>\n

Speaking at the commission\u2019s September public meeting Thursday<\/a>, PUC Chairman Steve DeFrank described how rapidly changing conditions have led to increases in electricity, water, sewage and gas bills.\n<\/p>\n

\u201cThe utility industry has experienced significant and continued turbulence in recent years, driven by high inflation, trade tariffs, increased customer account arrears, forever chemicals, lead lines, plastic pipe, supply chain constraints, data center development, global conflicts and electrical reserve margin shortages,\u201d DeFrank said. \u201cMany of these circumstances led to an extraordinary increase in the number of proposed rate increases filed with the commission.\u201d\n <\/p>\n

DeFrank\u2019s motion will establish a Ratemaking Working Group to examine, among other things, how the current system allows utilities to bake in profits to customer rate increases, the methods used to calculate and increase rates outside of the ratemaking cases and establish greater transparency in ratemaking cases.\n<\/p>\n

DeFrank said his motion is a direct response to Gov. Josh Shapiro\u2019s January budget address.<\/a>\n<\/p>\n

\u201cThe governor asked the commission to scrutinize utility spending to ensure each customer dollar is well spent,\u201d DeFrank said.\n<\/p>\n

Investor-owned utilities that provide water, gas and electricity make their profits on infrastructure upgrades, not the supply of gas and electricity, so the more they build, the more profit they can make. Much of that infrastructure includes critical upgrades needed for safety or expanded regulation as in the case of water providers needing to filter out PFAS. The so-called \u201cforever chemicals\u201d<\/a> are found in hundreds of everyday products like nonstick pans, and have been linked to serious health problems, including some cancers.\n<\/p>\n

The upgrades are financed through a combination of debt and equity, or funds contributed by their shareholders. The shareholders expect a return on that investment.\n<\/p>\n

Because utilities enjoy a monopoly when it comes to the distribution of water, gas and electricity, any increase in rates must be approved by the commission.\n<\/p>\n

As utility rates have risen, however, critics say the increases approved by the PUC in recent years has led to double-digit profits, <\/a>where the utility\u2019s gains far outweigh their cost of capital.\n<\/p>\n

Shapiro was also critical of the \u201cblack box\u201d settlements, which are common in ratemaking cases but often lack transparency as to how the parties reached certain financial terms, and how much return on investment the utilities expect to gain.\n<\/p>\n

Additionally, rate increases to pay for infrastructure upgrades, known as distribution system improvement charges<\/a>, can occur outside of the ratemaking case.\n<\/p>\n

\u201cThere\u2019s some data out there supporting a premise that for decades regulators have authorized returns on equity that exceed a utility\u2019s cost of capital and this has resulted in \u2026 consumers and ratepayers paying more than is reasonable,\u201d PUC Vice Chair Kimberly Barrow said. \u201cSo just the fact that that data exists means that we have to take a critical look at the underlying framework with which we set rates.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"From Philly and the Pa. suburbs to South Jersey and Delaware, what would you like WHYY News to…\n","protected":false},"author":2,"featured_media":284137,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[2116,28,30,29,9962,5205,10209,5206],"class_list":["post-284136","post","type-post","status-publish","format-standard","has-post-thumbnail","category-pennsylvania","tag-data-centers","tag-pennsylvania","tag-pennsylvania-headlines","tag-pennsylvania-news","tag-pennsylvania-public-utility-commission","tag-pjm-interconnection","tag-utility-bills","tag-whyy-news-climate-desk"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/284136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=284136"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/284136\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/284137"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=284136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=284136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=284136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}