Over the last month, local utility customers have been hit with unexpectedly high electricity bills, largely driven by soaring distribution rates. These increases are outpacing inflation and, in some cases, tripling over the last decade.1 With further cost hikes on the horizon, many homeowners are searching for answers and asking themselves “What choices do I have?”.
Understanding the Cause of Rising Utility Bills
Several key factors are driving up electricity costs, and residents are feeling the strain:
Distribution Rate Increases
The cost of delivering electricity to homes, known as the distribution rate, has surged for multiple utilities in our region. Delmarva Power’s Regional President, Phil Vavala, recently addressed customer concerns on WDEL’s The Rick Jensen Show, explaining that the Public Service Commission sets distribution rates, and these charges now make up approximately 50% of a typical electricity bill.4
According to Maryland’s Office of People’s Counsel, distribution rates for three major Exelon-owned utilities—Pepco, Delmarva Power, and Baltimore Gas & Electric (BGE)—have increased dramatically since 2010.1
A Surge in Wholesale Electricity Costs
In addition to distribution costs, wholesale electricity prices are climbing due to changes in the regional energy market. PJM Interconnection, LLC, the organization responsible for coordinating wholesale electricity distribution in Delaware, Maryland, New Jersey, Pennsylvania, and other states, recently held its 2025/2026 capacity auction. This auction determines which power plants will commit to providing electricity and at what price.
- In 2024, the total cost of the PJM capacity auction was $2.2 billion.
- In 2025, this cost has skyrocketed to $14.7 billion—a nearly 570% increase.2
This dramatic cost surge caused state officials to express concerns over residents’ ability to afford future energy rates. In response, the governors of Maryland, Delaware, Illinois, New Jersey, and Pennsylvania issued a joint letter urging PJM to take immediate action to prevent excessive price increases from being passed down to utility customers.3
A Cycle of Rate Hikes with No End in Sight
As wholesale and distribution costs continue rising, utilities will pass these increases to homeowners. This means higher electricity bills year after year, with little recourse for residents who remain fully reliant on the grid.
How Homeowners Can Protect Themselves
For many homeowners, solar energy presents a practical alternative to unpredictable rate hikes. Rather than being at the mercy of rising distribution and supply charges, solar customers stabilize their energy costs and, in many cases, lock in a fixed rate per kilowatt-hour for the next 25 years, saving them thousands.
The Benefits of Going Solar with SunnyMac
SunnyMac, a full-service residential solar company headquartered in Wilmington, Delaware, has been helping homeowners achieve energy independence since 2009. For those concerned about rising utility costs, SunnyMac offers a complimentary savings analysis to determine whether solar can reduce their electricity expenses.
This personalized assessment includes:
- A review of your past utility bills and energy usage.
- An analysis of your property’s solar potential, including sun exposure and shading.
- A custom cost breakdown comparing the long-term cost of staying on the grid vs. switching to solar.
For homeowners facing increasing electricity bills, now is the time to explore a stable, cost-effective solution. To claim your complimentary savings analysis, contact us today.
Resources:
- Maryland Office of People’s Counsel. Maryland’s Utility Rates and Charges Report. Accessed February 5, 2025.
- NRDC. PJM’s Capacity Auction: The Real Story. Accessed February 5, 2025.
- PJM Interconnection. Governor’s Letter on Capacity Auctions. Accessed February 5, 2025.
- WDEL. Delmarva Power President Addresses Rising Distribution Fees. Accessed February 5, 2025.
