Peco Seeks Rate Hike Amidst Union Contract Tensions

Peco has formally requested state regulators to approve an increase in gas and electric prices for its Southeastern Pennsylvania customers, slated to take effect in 2027. This proposal comes as the utility company is actively negotiating a new contract with its unionized workforce, who are advocating for higher wages and enhanced retirement benefits.

To bolster its infrastructure and improve service reliability, Peco executives stated the necessity of $520 million for significant grid updates. These improvements are crucial to address heightened demand, partly driven by data centers, and to ensure consistent power during adverse weather conditions. The company is planning upgrades such as stronger utility poles, more robust aerial cables, and new transformers.

This proposed rate hike follows recent increases; the Pennsylvania Public Utility Commission (PUC) previously approved electric bill rises averaging 10% in 2025 and 1.8% this year, with gas customers seeing a 12.5% increase last year. Peco's parent company, Exelon, reported an 48% increase in net income to $814 million in 2025, partly attributed to Peco's distribution rates and favorable weather.

Meanwhile, union representatives from IBEW Local 614 expressed dissatisfaction, alleging that Peco is not negotiating in good faith and has filed an unfair labor practice charge. Approximately 1,600 unionized employees, including linemen and mechanics, are involved in the contract dispute. Concerns include the lack of a unified retirement plan, with about 600 employees hired after 2021 lacking pensions entirely.

Despite the ongoing labor negotiations and the union's threat of a strike authorization vote, Peco maintains it has presented a fair offer and is confident in its good-faith bargaining. The company has a contingency plan in place to ensure service reliability, regardless of potential labor disruptions. Peco executives emphasized that the proposed rate increase is primarily for essential grid investments, irrespective of data center development, though such developments are also being managed through specific agreements to isolate costs.