HARRISBURG, PA — Pennsylvania Gov. Josh Shapiro pressured PECO to withdraw a proposed 12.5% electricity rate increase that would have added about $20 per month to the bill of the average residential customer. The intervention came as officials and lawmakers in at least six states — Arizona, Indiana, Maryland, New Jersey, New York and Pennsylvania — moved to block rate increases proposed by utilities.

"The 20th century utility model is broken," Shapiro said. He added: "We can no longer simply prioritize corporate profitability to drive infrastructure development."

Share prices of companies owning Pennsylvania-based utilities lagged their peers in the days after Shapiro's intervention. Exelon, the Chicago-based parent of Commonwealth Edison, PECO and Baltimore Gas and Electric, said it recognizes the importance of affordability. Butler said Exelon withdrew its rate increase request after stakeholders suggested partnering to address affordability and indicated that the timing was not right. "We are committed to justifying what we spend and keeping energy bills as low as possible," Exelon President and CEO Calvin Butler said.

The dispute is part of a broader fight playing out across states as the artificial intelligence boom drives growing utility profits. The energy demands of AI data centers have coincided with rising electric prices in some regions and a construction boom in the energy sector. Governors, attorneys general and others protesting rising electricity bills say cash-strapped residents face high costs within the current utility structure, and some officials are pressing utilities to change their model for financing major system upgrades.

Utilities say the investment returns granted by state regulators are critical to maintaining electric grids and ensuring reliability for millions of people, and they warn that investors will send their cash to utilities in other states that promise higher returns. They also point to federal data showing that home electricity bills as a proportion of household income have fallen over the past two decades. Critics call the warning about investor flight fearmongering.

A March report from the Energy and Policy Institute said the profits of 110 for-profit utilities rose from just under $39 billion in 2021 to over $52 billion in 2024. Consumer advocates have long tried to challenge the size of a utility's investment return before regulators.

"About 10% of the typical customer bill is excess profit above what might be considered reasonable under long-standing Supreme Court precedent," said Mark Ellis, a former utility executive and consumer advocate. Ellis said utilities should shop for the lowest-cost investor cash, similar to shopping for the lowest interest rate on a loan.