Your utility bills may be $12 more per month by the end of 2024

In Philadelphia, managing utility costs has been a concern for many households, particularly given the fluctuations in energy prices over recent years. Just last year, some residents were facing heating bills of more than $400 a month during the winter. While these costs have since lowered and stabilized, residents should prepare for regular annual increases that are set to begin in late summer.

“The biggest volatility in recent years has been on the energy cost side of utility bills, driven by some dramatic swings in the cost of natural gas,” said Nils Hagen-Frederiksen, press secretary for the state’s energy regulation body, Pennsylvania Public Utility Commission (PUC). “Those price swings have slowed dramatically, and energy prices continue to move down from their recent peaks in 2022, but those prices can still fluctuate depending on the time of year, customer demand, and global factors impacting energy markets.”

Based on current proposals and authorized adjustments from three of the city’s largest utility providers — Philadelphia Water Department (PWD), Philadelphia Gas Works (PGW), and PECO — the typical residential household may be paying roughly $12 more per month, across their utility bills this year.

This guide is a breakdown of how utility providers adjust rates for service and what those adjustments will be for 2024.

The Philadelphia Water Department (PWD) typically proposes adjustments to its base water service rates twice a year, while adjustments to its low-income assistance program, known as the Tiered Assistance Program (TAP), are proposed annually. Together, these adjustments impact the rates that PWD charges all customers — residential, commercial, and low-income customers — for water, sewer, and stormwater services.

Since 2020, the typical residential customer’s monthly bill has increased $6 or lower each year through these rate adjustments.

Monthly water bill totals for the typical residential customer:

This year, base rates were already approved to increase by roughly $6 (8.1%) per month on Sept. 1, bringing monthly bills closer to $80.

Additionally, PWD is currently in the process of TAP-R Adjustment or “reconciliation,” where the water agency proposes adjustments to water and sewer charges for all customers to offset the cost of operating TAP for low-income customers.

The TAP program allows eligible customers to pay a monthly bill based on their income instead of by usage. Customers in the lowest income bracket pay the equivalent to 2% of their monthly income or a minimum of $12 per month, according to PWD.

To recoup the costs of TAP, an additional $4.43 (5.9%) increase is proposed for all customer’s bills.

The Takeaway: In total, if the TAP-R adjustment is approved, there will be an overall $10.46 (14%) increase to the typical residential monthly bill starting in September, translating to roughly $85 total per month.

Before the new rate is approved, it must be presented to the Water Rate Board at a public hearing on at 10 a.m. on Friday, May 10. The hearing is open to the public via Zoom. No registration is required, but anyone interested in testifying should email [email protected] by May 8.

See if you’re eligible for PWD’s water assistance programs at water.phila.gov/cap.

Four times per year, Philadelphia Gas Works (PGW) will calculate the “Gas Cost Rate” which is the amount it costs for PGW to buy natural gas from suppliers and deliver it you, with no profit margin. While PGW calculates this rate in March, June, September, and December to understand how much gas distribution costs, they usually only propose new gas rates once per year.

The Takeaway: This March, PGW proposed a 2.3% rate increase to the typical residential customer bill, starting on Sept. 1, 2024. This translates to an extra $2 per month, with the average residential bill increasing from $93.80 to $95.93 per month if approved.

See if you’re eligible for PGW’s assistance programs at pgworks.com/customer-care/payment-assistance.

When a PECO customer pays their monthly bill, the cost is primarily made up of two charges: supply charge and delivery charge.

The supply rate changes four times per year in March, June, September, and December. Currently, the typical PECO customer is paying $135.85 per month.

The Takeaway: In June, the pending supply rate will decrease by 1.66%, saving customers $1.10 per month, according to PECO. Keep in mind, the supply rate can increase or decrease, like in December 2023, when the typical customer saved $5 per month on their bill when that rate change went into affect.

Throughout the rest of this year, the PECO supply rate should remain stable, said Greg Smore, PECO spokesperson.

However, starting on Jan. 1, 2025, a proposed adjustment to PECO’s monthly delivery rate would increase residential customer’s electric bills by 12.3%. This translates to $16.67 more per month toward the PECO bill. The delivery rate would increase again in 2026, but only by $2.70 per month, under current proposals. For residential natural gas customers, there is a proposed $16.15 (16.5% increase) per month in 2025.

While customers in the area are locked in to getting their energy delivered by PECO, they can get their supply of energy from other companies. Ever see people knocking on doors asking to see an electric bill?

You can shop around for third-party energy suppliers that can offer cheaper supply rates than PECO does at papowerswitch.com or pagasswitch.com.

However, customers need to stay more vigilant when “shopping around” for energy as some rates from third-party suppliers are subject to more variability — as was the case with one Philadelphian whose usual $50 electricity bill jumped to $200 after signing with a third-party supplier.

PECO offers a Standard Offer Customer Referral Program option, that allows customers to experience shopping on the third-party energy supply market without the risk. The offer connects a customer with a third-party supplier and sets them up with a fixed-rate that’s 7% lower than PECO’s current rate, for 12 months. Cancellable at anytime.