PECO: The Numbers Behind Your Bill & Rates
[Generated Title]: Amazon's Data Center Deal: A Win for Whom, Exactly?
The Federal Energy Regulatory Commission (FERC) just gave the green light to a transmission service agreement between PECO Energy and Amazon Data Services. This agreement outlines how Amazon will foot the bill for grid upgrades necessary to power its planned data center in Falls Township, PA. Seems straightforward, right? Amazon needs power, PECO needs to upgrade the grid, Amazon pays. But as always, the devil's in the data—or, in this case, the potential lack thereof.
The Mobile-Sierra Presumption and Its Implications
FERC invoked the Mobile-Sierra presumption, which essentially says that freely negotiated contracts between independent parties are considered just and reasonable unless they demonstrably harm the public. Okay, but who defines "harm," and how is it measured? Commissioner Judy Chang, in her concurring statement, raised some pertinent questions about customer protections. She pointed out that while this specific agreement might seem kosher, it raises "significant questions" about how FERC and state utility commissions will handle similar cases in the future.
Chang's concern is valid. We're talking about a massive data center. These aren't your grandma's server rooms; they're power-hungry beasts. And while Amazon is paying for the transmission upgrades, what about the generation capacity needed to actually supply the juice? FERC punted on this, saying it was outside the scope of the proceeding. But is it, really? Can you separate the transmission infrastructure from the energy source itself? It's like building a superhighway without considering where the cars will come from.
PECO customers are bracing for a 6% increase in electricity supply rates starting December 1st, jumping to 11 cents per kilowatt hour, while PPL customers will see a 3.7% increase, hitting nearly 13 cents per kilowatt hour. PECO, PPL electricity supply rates are set to increase on December 1 PECO attributes this to multiple factors including PJM's capacity auction. The company claims these costs are passed along directly to customers at exactly the cost that PECO pays.
The "Higher Of" Policy: A Potential Solution?
Chang suggests looking at FERC’s "higher of" policy, which currently protects existing transmission customers from network upgrade costs related to generator interconnections. Basically, if upgrading the grid for a new generator would raise the average cost for existing customers, the transmission provider can charge the new generator an incremental cost rate. This shields existing customers. Why isn't this being applied more broadly to massive load additions like Amazon's data center?
It's a reasonable question, and one that FERC seems to be dodging. Chang notes that states have approved or are considering more than 60 large load tariffs. Is FERC simply waiting for the states to sort this out, or is there a deeper jurisdictional issue at play? The agreement includes provisions to protect utility customers from costs related to providing transmission service to the data center, including if the data center isn’t built as planned, according to PECO’s Sept. 23 application at FERC. But what if it IS built as planned, and sucks up so much power that rates spike for everyone else?
And this is the part of the report that I find genuinely puzzling. PECO works hard to deliver safe and reliable electricity and natural gas service at the lowest price possible. On December 1, 2025, customers saw an increase in the electric supply portion of their bill and a decrease in the natural gas supply portion. This is for the supply portion of their bill, which can be purchased through a competitive energy supplier. For customers not purchasing their electricity or natural gas from a competitive supplier, these costs are passed along directly to customers at exactly the cost that PECO pays.
The Holiday Lights Distraction
It's also worth noting that PECO is heavily promoting its support for local holiday light displays. (The Electrical Spectacle Light Show in Old City is a lively display presented by PECO, with hundreds of thousands of dancing lights and vibrant music.) While these events are undoubtedly festive and community-oriented, it feels a bit like a distraction. Look at the pretty lights, don't worry about your electricity bill. And the Wanamaker Light Show, since its 1956 debut, has been a holiday pilgrimage for families in the region. The grand atrium of the historic Wanamaker Building comes alive with more than 100,000 LED lights dancing across a four-story-high velvet curtain, set to the thunderous tones of the famed Wanamaker Organ. But how much power are those 100,000 LED lights consuming?
Data Centers: The New Coal Mines?
Data centers are the new coal mines. They're essential for the modern economy, no doubt. But their energy demands are immense, and the costs – both financial and environmental – need to be transparently accounted for. Passing the buck to bilateral agreements and hoping for the best isn't a sustainable strategy. FERC needs to develop a clear framework for assessing customer protections, one that goes beyond simply rubber-stamping deals negotiated behind closed doors. Otherwise, we risk a future where big tech profits while ordinary consumers foot the bill.