PULP ED Testifies Before the General Assembly on Energy Affordability
On Tuesday, January 12th, 2026, Elizabeth Marx, Executive Director of the Pennsylvania Utility Law Project (PULP) testified before the Pennsylvania State House Energy & Consumer Protection, Technology, and Utilities Committees on “Energy Affordability: Why are utility bills rising, and what should the General Assembly do to reduce costs?”
In her testimony, Ms. Marx outlined the nuanced impact, drivers, and solutions to rising energy costs.
“Energy is essential to modern life. Pennsylvanians need energy to heat and cool their homes, power medical devices, cook food, and connect with employers, schools, and loved ones. Yet as energy costs rise sharply across the state, an increasing number of families are being priced out of the market for this basic necessity.”
Quick Facts:
In 2025, over 387,000 Pennsylvania households had their electric or gas shut off—the highest number of terminations ever recorded.
Over 1.2 million Pennsylvania families already pay over 10% of their income on home energy costs alone.
In 2024, one in four Pennsylvanians reported difficulty paying their energy bill. Among families earning under $50,000, over 50% reduced their food or medicine purchases to pay an energy bill.
The greatest increase in energy insecurity was among households with children.
In sum, utility shut offs make people and communities unhealthy and unsafe - creating short and long-term health consequences and exacerbating housing and economic insecurity. The very existence of utility debt can make families ineligible for housing and is a leading indicator of first-time homelessness.
And, while not a primary driver, Pennsylvania's current framework for utility collections is worsening the affordability crisis. In 2004, the Pennsylvania General Assembly passed Chapter 14—allowing utilities greater discretion to implement punitive collections policies while constraining the Pennsylvania Public Utility Commission's (PUC) ability to intervene. This law incentivized utility shutoffs and compounded debts—yet failed to meaningfully reduce collections costs. Chapter 14 sunset in December 2024, offering a distinct opportunity to design a new, prevention-based paradigm to help mitigate rising costs on vulnerable households.
Key Drivers of Rising Energy Costs
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We estimate that residential consumers at Pennsylvania’s largest electric utilities will pay over $78 million more per month as a result of data centers. The increase in electricity generation rates has also added over $57 million annually to the cost of universal service programs, like Customer Assistance Programs and hardship funds, which help low income families maintain service to their home. Universal service costs in Pennsylvania are only allocated to residential customers, which means that data centers pay nothing to support these programs – even though they are directly causing costs to increase. The massive cost shift on the generation side of the bill is just the tip of the iceberg. As data centers are built, distribution and transmission costs will also rise – shifting even more costs to Pennsylvania families.
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Across the four major electric utilities, residential shopping customers were charged well over $2.2 billion more – in the aggregate - than if they remained on default service. Low income shoppers are subject to even higher rates in the competitive market, suggesting suppliers may actively target low income communities with higher priced offers.
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The rapid growth in LNG exports since 2016 is forcing Pennsylvanians to compete in the world market for gas extracted from their backyard. Since 60% of Pennsylvania's electricity comes from gas generation, rising gas prices don't just affect gas bills—they drive up electricity costs too. We saw the consequences of LNG growth in late 2022, when gas prices spiked here at home after Russia cut off Europe's supply. Thereafter, residential gas terminations increased 40% over the prior year and electric termination rates followed suit – increasing 15% in the year after. Instability in world energy markets will continue to translate into instability in gas rates here at home. LNG export capacity is expected to double by 2027. Coupled with the anticipated increase in gas demand to power data centers, gas prices are expected to increase 33% by 2027.
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When gas prices dropped in 2007, as fracked gas exploded onto the market, gas utilities implemented aggressive distribution expansion and replacement programs – masking the true cost of these programs while commodity prices were low. But as gas costs increase, these added infrastructure costs remain baked into the overall bill. On a total bill basis, gas costs have or are close to surpassing pre-Marcellus gas prices.
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The PUC authorizes returns on equity far exceeding other industries—costing ratepayers hundreds of millions annually. While rate proceedings are subject to scrutiny through litigation, the scales are not balanced. Utilities deploy an army of attorneys and experts to defend their rate proposals, and they are permitted to include those costs in rates. At the same time as utilities are generating excessive profits, they are also advancing alternative rate mechanisms which shift normal business risks from utilities to consumers – driving up consumer rates while shoring up utility profits.
The solutions to these multifaceted issues must be bold and comprehensive.
Energy is a trillion-dollar industry, with an army of lobbyists behind it. This makes it exceedingly difficult to move meaningful policy solutions to rebalance the broken scales and reign in excessive profits and consumer abuses. To be successful, policy makers must choose Pennsylvania families – countering powerful interests with principled reforms.
On Data Centers: There is no “due” burden for residential ratepayers to bear. To help prevent unjust socialization of data center costs, we (1) Urge adoption of a strong legal presumption that – absent actual, substantial, and quantifiable evidence to the contrary – distribution upgrades for data centers benefit only the data center. (2) Require data centers to pay the universal service costs they are causing. (3) Impose other critical consumer protections, including standardized service terms, public disclosure requirements, demand response requirements, and requirements that data centers build and bring their own new, renewable energy resources to help to alleviate strain on gas demand driving higher gas prices.
On Retail Markets: Close the residential retail energy markets. These customers would still benefit from competitive wholesale markets through default service, and large industrial customers could retain direct market access. But at minimum, the Legislature should: (1) Require suppliers to return customers to default service at the end of the contract term absent express and affirmative renewal. (2) Prohibit variable rates. (3) Eliminate Purchase of Receivables programs that hold suppliers harmless for excessive prices. And (4) Restore PUC authority to issue direct consumer refunds.
On Billing and Collections: (1) Require improved screening and automated enrollment in assistance programs, helping families before they fall behind. (2) Require utilities to issue realistic and affordable payment arrangements. (3) Restore Pennsylvania Public Utility Commission (PUC) discretion to review the facts and circumstances. Eliminate punitive security deposits, late fees, and reconnection fees that compound unaffordable debt.
On Termination Protections: Strengthen medical protections for medically vulnerable households and protect Pennsylvanians from termination during the hottest summer months.
On Rate Reform: (1) Create guardrails that tie utility profits to actual market costs rather than the inflated returns currently authorized. (2) Remove utility rate case expenses and lobbying costs from rates and prohibit alternative rate mechanisms that shift risk to consumers.
Finally, we urge the Legislature to streamline and integrate delivery of comprehensive home efficiency, weatherization, and home repair programs - and allocate state funds to safeguard against federal cuts and to support year-round operation of the Low Income Home Energy Assistance Program (LIHEAP).