-Rates/pepco-bill-header-(1).jpg.aspx "pepco-bill-header-(1).jpg")
New electricity rates take effect June 1, 2025
Pepco’s Standard Offer Service (SOS) rate for electricity generation in the District of Columbia will increase starting June 1, 2025. Residents and businesses who receive electricity supply through Pepco’s SOS program will likely see a noticeable increase on their monthly bills after this date.
Why are rates increasing?
Each year, Pepco purchases electricity for its SOS customers through competitive auctions with wholesale suppliers. The new SOS rates reflect the results of this year’s auction, approved by the Public Service Commission of the District of Columbia (DCPSC) on May 7, 2025. Several market forces are contributing to the increased costs, including:
- Retirement of power plants across the region, tightening supply
- New reliability requirements to ensure energy is available during peak demand
- Higher demand from new energy-intensive data centers in the region
- Increased requirements for renewable energy as the region transitions to cleaner power
The DCPSC does not set wholesale market prices, but it is responsible for reviewing and approving Pepco’s rates to ensure they are fair and based on competitive outcomes.
Who is affected and how?
Check your bill to see if you’re an SOS customer or if you’ve chosen an alternative supplier. Pepco SOS customers will see an increase on their electricity bills starting June 1, 2025:
- An average residential customer using 614 kWh per month will see a 17.7% ($20.81) increase in their total monthly bill.
- Master metered customers will see a 17.2% ($13.49) increase in the total monthly bill.
- Small commercial customers (100 kW or less) will experience an average monthly bill increase of 16.1%.
- Large commercial customers (greater than 100 kW) will experience an average monthly bill increase of 12.1%.
For customers who purchase their electric energy supply through third-party suppliers, the cost of electricity is also likely to increase, but the increase will vary and depend on the specific third-party supplier contract terms.
What is Standard Offer Service?
Standard Offer Service, or SOS, is the “default” electricity supply service option for customers who have not selected a third-party energy supplier. The DCPSC regulates Pepco, the District’s SOS administrator. The SOS program is administered under rules established by the DCPSC.
Pepco and other SOS administrators purchase electricity during annual wholesale auctions. Several wholesale electricity suppliers place competitive bids to try to win contracts to supply electricity to an electric utility. The electric utility awards the contract to the wholesale supplier who made the lowest bid. Pepco states that these annual competitive auctions "provide customers with generation rates that are reflective of market conditions while at the same time providing protection against extreme conditions."
How to prepare for rate changes
Reduce your energy consumption
The easiest and most impactful way to save money on your utility bill is to be more efficient and use less energy. Familiarize yourself with your energy options and learn about the many ways to conserve and/or reduce your energy use. There are also several programs, initiatives, and resources available to consumers that can also help save money, including Pepco's money and energy saving programs.
Understand your electricity bill
Most energy customers only look at their energy bill (if at all) to find out what they need to pay each month. However, an electric bill is broken down into several different sections, each of which provides important information. Your electric bill can help you understand your energy usage and determine where to make improvements to reduce energy consumption.
Get additional help
District residents may be eligible for several utility discount programs, bill credits, and other assistance programs. The DCPSC requires that Pepco, Washington Gas, and Verizon sponsor their own discount programs for residents, but there are additional money- and energy-saving initiatives available through #Here2HelpDC.
Please contact the DCPSC if you have any questions or need additional assistance.