Victory: Pennsylvania House Unanimously Passes Bill to Cap Utility Profits, Deliver Relief to Ratepayers

Contact: Seth Nelson

Today, the Pennsylvania House of Representatives unanimously passed HB 2224, landmark legislation introduced by House Energy Chair Elizabeth Fiedler that would cap the return on equity (ROE) that investor-owned utilities can earn during rate cases. Under current law, utilities are entitled to a “reasonable” return on their investments, but that term is undefined, leaving Pennsylvania ratepayers exposed to whatever profits utilities can convince regulators to approve. 

Chair Fiedler’s bill changes that by establishing a formula-based cap, tying the default authorized ROE to the 10-year U.S. Treasury bond yield plus two percentage points. It also creates a competitive equity auction process for utilities that challenge the formula, ensuring any approved return reflects actual market conditions rather than utility wishful thinking. 

In response, Evergreen Action Northeast/Mid-Atlantic Regional Director Eric Miller released the following statement:

“The unanimous passage of this legislation is a major win for Pennsylvania ratepayers and a clear sign that common sense is prevailing in Harrisburg. For too long, customers have absorbed higher and higher bills while PJM member utility companies post record profits and hand their CEOs generous bonuses. That imbalance must end. With summer temperatures—and energy bills—set to rise, the House took decisive action to right-size utility profits and put money back in the pockets of struggling families.

“We’re grateful to Chair Fiedler for her leadership in introducing and championing this legislation and to House members for supporting it. But the work isn’t done. The Senate must take up this bill and pass it without delay. Pennsylvania families cannot afford to wait.”

Earlier this month, an independent analysis from Synapse Energy Economics found that state leaders could save Pennsylvania households $841 per year by 2030 through a set of concrete policy actions, including tackling excess utility profits by lowering monopoly utilities’ guaranteed return on investment. A fact sheet detailing these interventions and their benefits can be found here.

###