Pennsylvania Electricity: How It Works, What You’ll Pay & Why Choice Matters

Pennsylvania uses a “Price to Compare” system, which is a benchmark rate that appears on every electric bill and helps residents evaluate competitive supplier offers.

Here’s how it works: Pennsylvania deregulated electricity in 1996, splitting generation (making electricity) from delivery (bringing it to your home). Your local utility still handles all delivery, maintenance, and outages. But you can choose who generates your electricity from dozens of licensed suppliers.

If you never pick a supplier, you pay your utility’s Price to Compare; the default rate for electricity generation, set by your utility and approved by the Pennsylvania Public Utility Commission (PUC).

If you do pick a supplier, you compare their rate to your utility’s Price to Compare. If a supplier offers 9.6¢/kWh and your utility’s PTC is 10.1¢/kWh, you’d save 0.5¢ per kWh on the generation portion of your bill.

This system gives you choice without forcing you to shop. Don’t want to compare plans? You automatically get electricity at the PTC. Want to shop? The PTC serves as your baseline.

For a detailed explanation of how electricity deregulation works across the U.S., see our guide: Regulated vs Deregulated Electricity Markets.

This page explains how electricity works in Pennsylvania, who controls each part of the system, and how the Price to Compare fits into consumer choice. The goal is education first — not sales — so you can understand your options before making any decisions.

Compare Pennsylvania to other states: Texas, Ohio, Illinois, or view all states.

Is Electricity Deregulated in Pennsylvania?

Yes.The state formally opened its electricity market to competition with the Electricity Generation Customer Choice and Competition Act of 1996. This law allowed customers to shop for electricity generation while keeping utilities responsible for transmission, distribution, and reliability.

Here’s the breakdown:

What’s deregulated:

• Electricity generation (who produces or sells you electricity)
• You can shop for suppliers and choose different plans/rates

What’s still regulated:

• Electricity delivery (the utility that maintains power lines and infrastructure)
• The Pennsylvania Public Utility Commission (PUC) still oversees utilities, licenses suppliers, and enforces consumer protections

When did this happen? Pennsylvania opened its electricity market to competition in 1996 with the Electricity Generation Customer Choice and Competition Act.

Translation: You’ve been able to choose your electricity supplier for almost 30 years now—but a lot of people still don’t realize it.

How Pennsylvania’s Electricity System Is Structured (Who Does What)

The system is split into three distinct roles. Understanding this makes everything else click.

1. Electricity Generation Suppliers (EGSs) – Who You Can Choose

What they do:

• Generate electricity or buy it wholesale and resell it to you
• Set your generation rate (what you pay per kilowatt-hour for electricity)
• Offer different plan types (fixed-rate, variable-rate, renewable, etc.)

What they DON’T do:

• Own power lines
• Respond to outages
• Maintain infrastructure

Examples: Direct Energy, Constellation Energy, IGS Energy, Verde Energy, and dozens of others

Your choice: You can pick one of these suppliers, or you can stick with your utility’s default service (more on that below).

2. Electric Distribution Companies (Utilities) – Who Delivers Your Power

What they do:

• Own and maintain power lines, poles, transformers, and meters
• Deliver electricity to your home
• Respond to outages and emergencies
• Read your meter and send your bill

What they DON’T do:

• Set generation rates (unless you’re on default service)
• Compete with other companies (they’re regulated monopolies)

Your utility is determined by where you live. You can’t change it.

Major Pennsylvania utilities:

• PECO Energy – Southeastern PA (Philadelphia area)
• PPL Electric Utilities – Central and eastern PA
• Duquesne Light – Western PA (Pittsburgh area)
• FirstEnergy utilities – Met-Ed, Penelec, Penn Power, West Penn Power (various regions)

Delivery charges are the same regardless of which supplier you choose.

3. PJM Interconnection – The Behind-the-Scenes Grid Manager

What it is: PJM manages the wholesale electricity market and coordinates power flow across 13 states, including Pennsylvania.

What it does:

• Balances electricity supply and demand in real-time
• Operates wholesale markets where generators and suppliers buy/sell electricity
• Ensures grid reliability

What it DOESN’T do:

• Sell electricity to consumers
• Set retail rates
• Handle your bill

Why it matters: PJM’s wholesale prices influence what suppliers charge you, but you never interact with PJM directly.

Major Electric Utilities in Pennsylvania

Your electricity options depend on your utility service territory. Major utilities operating in Pennsylvania include:

• PECO Energy Company – Southeastern Pennsylvania
• PPL Electric Utilities – Central and eastern Pennsylvania
• Duquesne Light Company – Western Pennsylvania (Pittsburgh area)
• FirstEnergy Utilities, including:
  • Met-Ed
  • Penelec
  • Penn Power
  • West Penn Power

Each utility administers default service and delivery charges, while competitive suppliers operate within these territories.

What Is the “Price to Compare” in Pennsylvania?

This is super important if you’re thinking about switching suppliers.

Definition:

The Price to Compare (PTC) is the rate your utility charges for electricity generation if you don’t choose a competitive supplier.

Key facts:

• Set by your utility (not suppliers)
• Approved by the Pennsylvania PUC
• Applies only to generation, not delivery
• Changes periodically (usually quarterly or every 6 months)

Where to find it: It’s printed on your electric bill, usually near the top or in a box labeled “Price to Compare.”

How to Use the Price to Compare

Example:

Let’s say your utility’s Price to Compare is 10.1¢ per kWh.

A supplier offers you a plan at 9.6¢ per kWh for 12 months (fixed-rate).

The math:

• You’d save 0.5¢ per kWh on the generation portion of your bill
• If you use 1,000 kWh per month, that’s a $5/month savings ($60/year)

Important caveat: This savings applies only to generation charges. Your delivery charges stay the same.

Also: The Price to Compare can change. So a supplier rate that looks good today might not stay lower if your utility’s PTC drops in 6 months.

Bottom line: Always compare supplier rates to your current Price to Compare, not to what you paid last year or what your neighbor pays.

Can You Choose Your Electricity Supplier in Pennsylvania?

Short answer: Most Pennsylvania residents can, but not everyone.

You CAN choose if:

You’re a residential or small commercial customer and/or you’re served by one of the major utilities (PECO, PPL, Duquesne Light, FirstEnergy companies)

You might NOT be able to choose if:

You’re in a municipal utility area (rare in PA, but exists), you’re on a special rate program with restrictions or your account type doesn’t allow shopping

For most Pennsylvanians: Yes, you can choose.

What Happens If You Don’t Choose a Supplier?

Nothing bad.

If you never enroll with a competitive supplier, you automatically stay on your utility’s default service at the Price to Compare rate.

You still get electricity. Your lights stay on. Nothing changes.

Key point: Choosing a supplier is optional, not required.

How Switching Suppliers Actually Works

If you decide to switch, here’s what happens:

Step 1: You enroll with a licensed supplier

• Online, by phone, or through a comparison site
• Provide your account number and some basic info

Step 2: Your utility processes the switch

• The supplier notifies your utility
• Your utility verifies your account

Step 3: The switch takes effect

• Usually 1-2 billing cycles (30-60 days)
• No interruption to your electricity service
• No technician visit required

Step 4: You get one bill from your utility

• Generation charges from your chosen supplier
• Delivery charges from your utility
• One bill, two line items

Important:

• Your utility still handles outages (suppliers don’t touch power lines)
• You still call your utility if the power goes out
• Switching suppliers doesn’t affect service reliability

Common Electricity Plan Types in Pennsylvania

Pennsylvania suppliers offer three main plan types: fixed-rate (locked rate for 6-24 months), variable-rate (rates change monthly based on market), and renewable energy plans (supported by RECs).

For a detailed breakdown of how fixed vs. variable plans work, including pros/cons and real examples, see our comprehensive guide: Fixed vs Variable Electricity Plans.

Always review the Electricity Facts Label (EFL) or disclosure statement before enrolling with any supplier.

Important: Always Read the Electricity Facts Label (EFL)

Before enrolling in any plan, read the disclosure statement or Electricity Facts Label (EFL).

What to look for:

• Actual rate (not just the advertised “teaser” rate)
• Contract length
• Early termination fees
• Rate structure (is it truly fixed, or does it change based on usage tiers?)
• Renewal terms (what happens when the contract ends?)

Red flags:

• Plans that look too cheap (often have catches)
• Variable rates disguised as “flexible” pricing
• Confusing fee structures

Should You Shop for Electricity in Pennsylvania?

Honest answer: It depends on your situation and preferences.

Shopping might make sense if:

• You want predictable pricing (fixed-rate plans)
• You’re comfortable comparing offers and reading contracts
• You’re willing to monitor contract renewal dates
• You plan to stay in your home for at least the contract length

Staying on default service might make sense if:

• You prefer minimal decision-making
• You move frequently
• You don’t want to deal with contracts or early termination fees
• Your utility’s Price to Compare is already competitive

There’s no universally “best” choice. It’s about what aligns with your preferences and tolerance for complexity.

Key insight: Some people save money by shopping. Others save time and stress by staying on default service. Both are valid.

What You’ll Actually Pay for Electricity in Pennsylvania

Let’s talk real numbers.

Average Pennsylvania Electricity Rates (2026)

According to industry data sources and the U.S. Energy Information Administration (EIA):

Pennsylvania’s average residential electricity rate: 17.4–20.5¢ per kWh

For context:

• U.S. national average: ~16¢ per kWh
• Pennsylvania: Slightly above the national average

What this means for your bill:

If you use 900 kWh per month (average Pennsylvania household):

• At 18¢/kWh: ~$162/month
• At 20¢/kWh: ~$180/month

Real-world range: Most Pennsylvania households pay $140–$180/month for electricity.

Why Are Pennsylvania’s Rates Higher Than the National Average?

Several factors contribute:

1. Generation mix: Pennsylvania relies heavily on natural gas and nuclear power, which can be sensitive to fuel cost volatility and wholesale market conditions.

2. Regional grid dynamics: Pennsylvania is part of PJM Interconnection, which manages electricity across 13 states. PJM’s capacity and energy markets influence retail rates.

3. Delivery infrastructure: Maintaining an aging grid across a large, geographically diverse state adds to delivery costs.

4. Deregulation structure: While competition can lower generation rates, delivery charges (which are regulated) make up a significant portion of the total bill.

Common Myths About Pennsylvania Electricity

Myth 1: “Switching suppliers is risky.”

Reality: Switching is safe and regulated. Your utility still delivers power, and the PUC oversees suppliers.

The actual risk: Choosing a bad plan (not understanding the contract, getting hit with early termination fees, etc.). This is why reading the fine print matters.

Myth 2: “My power will go out if I switch.”

Reality: Your power delivery is completely unaffected. Your utility still maintains the lines and responds to outages.

What changes: Who generates your electricity and what rate you pay.

Myth 3: “Competitive suppliers are always cheaper.”

Reality: Not always. Sometimes the Price to Compare is already competitive. Sometimes supplier rates look good initially but spike after an introductory period.

Bottom line: Compare carefully. Cheaper isn’t guaranteed.

Myth 4: “I have to choose a supplier.”

Reality: You don’t. Staying on default service is perfectly fine. It’s your choice.

How Pennsylvania Compares to Other States

Pennsylvania’s market shares similarities with other deregulated states, but differs from the Texas energy market in several key ways. Unlike Texas, which operates on an isolated grid (ERCOT), Pennsylvania participates in PJM Interconnection — a multi-state grid that coordinates power across 13 states. This affects wholesale pricing but not your ability to choose suppliers.

Utilities retain a stronger role in billing and default service compared to Texas, and the Price to Compare plays a central role in consumer decision-making — a system that Texas and Illinois don’t use.

Resources for Pennsylvania Electricity Shoppers

Official Resources:

Pennsylvania Public Utility Commission (PUC)

• Website: puc.pa.gov
• Complaint hotline: 1-800-692-7380
• Supplier licensing info, consumer guides, complaint filing

PA Power Switch (Official Comparison Tool)

• Website: papowerswitch.com
• Compare licensed suppliers
• See rates and plan details
• Free, state-run tool

Energy Information Administration (EIA)

• Historical rate data
• State-by-state comparisons