Opinion: Regulators aren’t the main reason for your spiking energy bills

If your electric bill looks higher than usual, you’re not alone. Across Washington, D.C. and the nation, many households are seeing higher monthly totals. For families already dealing with rising housing, food and transportation costs, utility bills are another strain on household budgets.

When bills go up, many people understandably ask: Why aren’t regulators stopping it? The Public Service Commission of the District of Columbia, which oversees Pepco, has received sharp public criticism in recent months from commentators claiming we’ve allowed uncontrolled increases in energy prices.

But these accusations miss most of the story. The Public Service Commission directly regulates roughly 27% of a typical Pepco bill. The remaining 73% is driven largely by factors outside the DCPSC’s control, including regional electricity markets, federal transmission expenses, and policy mandates set by bodies beyond the commission.

To understand why bills are rising, it helps to know where those costs come from. 

Delivery

Start with delivery — the portion of your bill that pays for the poles, wires, substations, and the crews that maintain the local electric grid. In the District, delivery rates are regulated by the Public Service Commission. When utilities propose changes to delivery rates, they must go through a detailed legal public process, in which proposals are examined by consumer advocates, independent experts, and regulators. These proceedings often take months and involve extensive data review and public input before any changes are approved. After this thorough review, the rate proposal from the utilities is often significantly reduced.

The D.C. Court of Appeals recently vacated DCPSC’s approval of a Pepco rate plan. The court order affirms that the commission must carefully weigh proposed rate changes via an in-depth evidentiary hearing.

Supply

The cost of generating electricity, known as supply, is largely determined by a regional wholesale market managed by PJM Interconnection, which operates across 13 states. D.C. cannot generate most of its own electricity because it is a small, densely developed city with limited land for large power plants or utility-scale energy projects. So, D.C. must rely on power produced elsewhere.

Several forces are pushing supply prices higher. Electricity demand across the region is rising quickly, fueled primarily by the expansion of energy-intensive data centers and the electrification of homes and vehicles. At the same time, older power plants are retiring faster than new ones are coming online. When demand grows faster than new supply, wholesale prices increase, and those increases flow through to consumers.

Transmission

Transmission costs are another major factor. High-voltage lines move electricity from power plants to local distribution systems, like Pepco. Transmission rates are regulated by the Federal Energy Regulatory Commission, not the District.

Across our region, utility and independent transmission companies are investing billions of dollars in new transmission lines to strengthen reliability and connect new energy sources to the grid. These investments are necessary to maintain a resilient electric system, but the costs are shared by customers and ultimately appear on their monthly bills.

Policy

Policy mandates by the D.C. Council, though a smaller factor, are also part of the equation. Renewable energy programs, compliance fees, solar incentives, surcharges, and other public policy initiatives all add to the total cost of electricity in the District. Some District compliance fees around clean energy mandates are among the highest in the nation, compared to other states. The cost of all of these initiatives and programs factor into the monthly bill. According to Lawrence Berkeley National Laboratory, in 2024 15% of the District's average electric bill was associated with Renewable Portfolio Standard compliance, a standard that requires utilities to get a certain amount of their energy from renewable sources. This figure will only increase as RPS mandate requirements each year.

Here’s the key point: regulators do not set the price of electricity, and do not simply defer to utilities. Instead, the commission’s role is to ensure that the portion of the bill within its authority, which is primarily the delivery rates (roughly 27%), is fair, transparent, and justified.

In D.C., assistance programs, payment plans, and energy-efficiency improvements are available to help reduce costs. I invite residents, businesses, and community organizations to attend and participate in DCPSC hearings, our community outreach events, and our affordability summit, to be held on May 27, 2026. 

Higher electricity bills are a real concern for families across the District. Addressing it will require cooperation among regulators, policymakers, utilities, regional grid operators, and community advocates. 

Solving the broader affordability problem begins with a clear understanding of what is truly driving prices and a commitment to thoughtful solutions that keep the lights on. 

Emile C. Thompson is the Chairman of the Public Service Commission of the District of Columbia.