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Governor Shapiro’s 2026-27 Budget Address Includes Energy Reforms Aimed at Suppliers and Utilities

“We need to cut costs and be more competitive — and one of the best ways to do that is by reducing the cost of energy.

One of our challenges is that our regional grid operator, PJM, has moved too slow to generate more power.”

“Last month, I led a bipartisan group of governors to the White House, where we signed a statement of principles calling on PJM to speed up the connection of new energy sources and extend that price cap for another two years — which will save 67 million Americans an additional $27 billion.”

“PJM is one part of the problem, but we know that there are other factors that affect Pennsylvanians’ utility bills. 

The amount that comes from the energy you use only represents about 20 percent of your typical bill.

Another big chunk comes from fees and costs that your local utility company charges to get electricity to your home.

Our utility companies in Pennsylvania make billions of dollars every year — while at the same time, they’ve increased the cost for consumers with too little public accountability or transparency.

That has to change. 

So last month, I called the four largest electric utility companies in Pennsylvania into my office and pushed them to do their part to help control rising costs for Pennsylvanians.

I made clear that if they were unwilling to act, the Public Utility Commission would step in and force them. 

Following that conversation, PECO, Duquesne Light, First Energy, and PPL, all of whom join us here today, have agreed to take four important initial steps to rein in costs, starting today.

First, they will end so-called “black box settlements” and agree to set prices transparently, so Pennsylvanians will know exactly how much money they are earning, and how utility dollars are being spent.

Second, they will work with my Administration and the General Assembly to enact commonsense reforms that will ban deceptive contracts by retail providers which could save Pennsylvanians hundreds of millions of dollars.

Third, they will eliminate junk fees they charge low income Pennsylvanians to have their service reconnected — something that can be done with the press of a button at the utility’s control center — which will save Pennsylvanians millions of dollars on bills each year.  

And fourth, they will work with both chambers to extend and expand Chapter 14 protections for low-income and vulnerable Pennsylvanians.

These steps will save consumers money immediately, and while I appreciate our utility leaders for working together to cut costs for consumers, this is just a start.

They have a lot more work to do.

That’s why I am taking three further steps today.

First, I am calling on the PUC to scrutinize utility spending.

I want the PUC to examine every single line of every single bill to ensure each customer dollar is being well spent. 

We’re joined today by Chairman Steve DeFrank and members of the PUC, who’ve agreed to begin this work immediately. 

Second, I’ve created a new watchdog within my Administration, a Special Counsel for Energy Affordability tasked with closely examining utility rate requests and taking legal action to stop utility companies from jacking up their rates and costing you more.

And third, we need to have a hard conversation about the amount of profit utilities and their investors can make on the backs of hardworking Pennsylvanians.

S&P Global Ratings currently ranks Pennsylvania as one of the top four states in the country for utilities to make a profit. 

At a time when consumers are struggling with high costs, our utilities need to be more sensitive to the reality of their customers.

I’m working with the PUC to prevent excessive utility profits this year, but the General Assembly needs to take action to lower costs for consumers going forward, by giving the PUC a set of benchmarks to follow when determining how much utilities can make.

We grant these utilities a monopoly — and in exchange, they have a legal responsibility to keep their costs just and reasonable. 

They shouldn’t get one dollar more than what they need to meet their customers’ needs.

Together, these steps will save Pennsylvanians over $500 million on their energy bills every year.

And if you act with legislation, the savings will be even greater.

But look, I recognize that the most consequential way we can lower energy prices is by generating more energy.

It’s simple supply-and-demand.

Pennsylvania is an energy leader — and I am an all-of-the-above energy governor.

For the last several years I’ve heard people on the other side of this building making excuses for why they couldn’t talk about energy.

And those excuses always centered on Pennsylvania’s entry into RGGI back in 2019.

We came together on a bipartisan basis last year to remove RGGI from the conversation and remove your excuse for not moving forward.

Now is the time to act.”

Read Governor Shapiro’s entire 2026-27 Budget Address here.