Why is your electricity bill so high this winter? Pepco CEO explains rising costs

WASHINGTON - Noticing your electricity bill is higher this winter? FOX 5 spoke with Pepco's CEO to break down why – and whether any relief is on the way. 

What they're saying:

CEO of Pepco Holdings Tyler Anthony broke down the factors of an electricity bill. 

"In the simplest terms, we have two parts that are the major parts of the bill. The delivery, that's for Pepco to bring the power to your home. And then we have the supply side, and that's independent of us and people that have power plants that make the power. So your bill is into two different components. It's about a 50-50 split," said Anthony. 

Anthony said the cost of supply has increased from $29 per megawatt day to $333. 

Last summer, Pepco announced to customers in D.C. an increase to their bill of up to 18%. 

Rates have been on the rise nearly every year since 2021, after Pepco was approved by DC's Public Service Commission to increase their rates through multi-year rate hikes. The hikes are based on forecasted projected budgets, not historic costs.

Dig deeper:

How does Pepco handle the supply of electricity from power plants? 

"We do an auction through our regional operating group here in the greater DC area and that auction is once a year that they set that price and then what we do is get that power to customers and collect it. We don't make any dollars on it," said Anthony. 

Anthony says the high costs from the supply side is "going to be with us for a little while." 

"We work here in the District with the different stakeholders. We're working with Governor Moore in Maryland, and there's quite a bit of legislative happening in order to try to build more power plants. That's where the long-term relief is going to be. We're just using more," said Anthony. "Over the last several years in our several state area, a lot of power plants have come offline. A lot of the fossil plants have retired. So we've lost generation in a time where we're increasing usage." 

Big picture view:

One of the factors in increased usage of electricity: data centers. 

"We have had the perfect storm. We're using more, we're making less, and items like data centers are increasing that demand which has driven that price up," said Anthony. 

Northern Virginia, particularly Loudoun County's "Data Center Alley," remains the world's largest data center market, with over 300 facilities. 

What's next:

The D.C. region had a historically cold winter, with three weeks of extreme cold in January. 

"What we saw is our customers used, on average, 60% of more electricity that month," said Anthony. 

With warmer temperatures on the way, Pepco customers can expect to see lower bills. 

What you can do:

If you're struggling to pay your utility bill, Pepco does offer programs. 

"We have our customer relief fund for low to moderate income," said Anthony. "People can apply online for up to a $300 benefit credit for their bill."

Beyond that, Anthony says there are ways customers can do to take an "active role" in lowering their bill. 

"As simple as unplugging that toaster, doing the different things, keeping that thermostat down just a few degrees can make big differences," said Anthony.