On December 17th PJM, America's biggest grid operator, held the auction that
keeps the lights on in 13 states. It came up short. First time in its history.
6,623 megawatts short, and the bill still set a record 16.4 billion dollars.



<[link removed]>

September 01


 



For the first time ever, the grid came up short

Find Out More →
<[link removed]>

 






On December 17th PJM, America's biggest grid operator, held the auction that
keeps the lights on in 13 states.

It came up short. First time in its history.

6,623 megawatts short, and the bill still set a record 16.4 billion dollars.

That number does not stay in the auction. It lands in your house.

Somebody is buying the power you used to take for granted.



Dylan Jovine has three names in the same envelope >>
<[link removed]>

P.S. Look at your last power bill. This is already in it. See who is
collecting >>
<[link removed]>

"The Buck Stops Here,"

Kelly Maguire

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THE HILL REPORT

The Bill Has Four Parts and They Move Separately

Connor Hill · InsightfulWord · September 1, 2026

A household electricity bill looks like one number multiplied by one quantity.
It is not. It is at least four different prices, set by four different
processes, on four different clocks, added together and printed as a single
figure.

The confusion this creates is not trivial. When the total rises, the natural
assumption is that the price of electricity rose. Sometimes that is what
happened. Often the electricity itself was flat or cheaper, and something else
moved.

The four components, in the order they appear on most statements, are supply,
transmission, distribution, and a category variously labeled riders,
surcharges, adjustments or public benefit charges. Each has a different
economic logic and a different decision-maker.

Supply is the cost of the electricity itself — the output of generating
plants, procured either by the utility on behalf of customers or by a
competitive retailer the customer chose. In restructured states it is the only
part a household can shop for.

Transmission is the cost of the high-voltage network that moves power between
regions. It is regulated federally, priced through formula rates that update
annually, and it has been the fastest-growing component in much of the country
for a decade.

Distribution is the local system — the poles, the transformers, the line
crews. It is regulated by the state commission and its price changes only when
a rate case concludes, which happens every few years rather than continuously.

The fourth category is the residue: legislated programs, arrears recovery,
storm cost deferrals, efficiency mandates, low-income assistance. These are
usually the least examined and frequently the fastest moving.

What follows is where each number originates, why the riders deserve more
attention than they get, why two regulators on two clocks produce the pattern
households actually experience, what a rate case decides, and the one variable
a household genuinely controls.

Where the Rate Actually Comes From

The supply portion is a wholesale market outcome in most of the country, and
the mechanism is worth stating plainly because it explains a great deal of the
volatility.

In organized markets, generators offer their output and the system operator
accepts offers in ascending order of cost until demand is met. The last
accepted offer sets the price paid to every accepted generator for that
interval. This is a uniform clearing price, and it is deliberate: it gives
every generator an incentive to offer at its true cost, since offering higher
only risks not being dispatched.

The consequence is that the marginal unit sets the price for everything. In
most hours across most of the eastern interconnection, that marginal unit burns
natural gas. The retail supply price therefore tracks gas, with a lag
introduced by how the utility or retailer procures — typically a laddered
series of forward purchases rather than a spot exposure.

That laddering is why a household bill does not swing with the daily gas
price, and also why it does not fall immediately when gas falls. A utility that
bought forward at higher prices delivers those prices for the duration of the
contracts already struck.

The procurement schedule is itself published in most regulated states. Default
service is generally bought at auction on a fixed calendar, with the results
filed and the resulting rate posted before it takes effect. That means the next
change in the supply component is usually knowable weeks in advance, and
knowable precisely rather than approximately.

Transmission works on an entirely different basis. Its price is not a market
clearing outcome but a regulated return on invested capital. A utility that
builds a line recovers the construction cost over the asset's life plus an
authorized rate of return on the unrecovered balance. More building means a
higher transmission charge, regardless of what electricity costs.


The Riders Are the Part Nobody Reads

The fourth category is where the most surprising arithmetic lives, and it is
the least standardized across jurisdictions.

A rider is a charge authorized outside the general rate case, usually to
recover a specific cost the legislature or the commission decided should be
recovered separately. The reasoning is administrative: rather than reopen a
full rate proceeding every time a defined cost arises, the commission approves
a mechanism that adjusts on its own schedule.

The categories recur across states. Energy efficiency programs, funded by a
per-kilowatt-hour charge. Renewable portfolio compliance, recovering the cost
of certificates the utility must buy. Storm restoration, where extraordinary
repair costs are deferred to a regulatory asset and amortized over years.
Uncollectible accounts. Nuclear or coal plant support where a legislature
enacted one. Grid modernization capital outside the base rates.

Individually these are small — often a fraction of a cent per kilowatt-hour.
Collectively, in some jurisdictions, they now exceed the distribution charge.
Their growth is also structurally easier than base rate growth, because each is
approved on its own record rather than in a contested general proceeding where
every element is examined at once.

The practical significance is that a bill can rise materially in a year when
neither the generation market nor the distribution system changed at all.
Reading the line items is the only way to know which happened, and the line
items are on the statement.


Two Different Regulators, Two Different Clocks

Federal and state regulators divide the bill between them, and the division
explains the timing pattern households observe.

Transmission is federal. Its rates are largely set by formula: the utility
files a template, the template is populated annually with actual costs and
investment, and the resulting charge updates without a full proceeding each
year. This makes transmission responsive to investment almost immediately.


📊 Fresh Energy Signal

18.34 cents per kilowatt-hour

The average U.S. residential retail price of electricity in June 2026, up 5.0
percent against June 2025, with all four customer sectors showing higher
average revenue per kilowatt-hour than a year earlier. The figure is an average
of prices that include supply, transmission, distribution and rider components,
which move independently. Source: U.S. Energy Information Administration,
Electricity Monthly Update.


Support or oppose: should transmission costs be spread evenly across every
customer in a region?

Supporters argue that a transmission network is indivisible, that everyone
benefits from a system that can move power to where it is short, and that
trying to assign each line to a beneficiary produces years of litigation and no
better answer. Opponents argue that specific lines are built to serve specific
demand, that spreading their cost across households who did not cause it is a
transfer, and that pricing by beneficiary is the only way to discipline what
gets built. Which is better?Hit reply — one line is enough.

Distribution is the state's. Its rate changes only when a general rate case
concludes, and those are infrequent, adversarial, and slow. A commission
reviews the utility's costs, its proposed investment, its authorized return,
and its allocation between customer classes. The proceeding routinely runs most
of a year with intervenors, testimony and settlement negotiations.

The result is a distinctive pattern. Transmission drifts upward in small
annual increments that attract little notice. Distribution sits flat for
several years and then steps up once. Riders adjust on their own varied
schedules. Supply moves with the procurement calendar.

Four components on four clocks means the total almost never reflects a single
cause, and any explanation of a bill increase that names only one is incomplete
by construction.


What a Rate Case Actually Decides

The general rate case is the proceeding that determines the largest single
regulated component, and its structure is not widely understood outside the
people who litigate them.


Context — what a cost trend implies about any particular company

Rising costs in a regulated sector are not equivalent to rising profits for
the firms in it. A regulated utility earns an authorized return on prudently
invested capital; higher fuel or purchased power costs are generally passed
through without markup, and a commission can disallow costs it finds imprudent.
Rising costs also raise political salience, which raises the probability of
intervention. Nothing here is a comment on any specific company, sector or
security, and none of it is a recommendation.

The case establishes a revenue requirement: the total the utility is permitted
to collect. It is built from operating expenses, depreciation, taxes, and a
return on the rate base — the depreciated value of the capital the utility has
invested and the commission has found used and useful.

Every one of those inputs is contested. Consumer advocates challenge specific
expenses. Industrial customers challenge the allocation between classes. The
authorized return on equity is argued by opposing expert witnesses whose
recommendations typically differ by more than a percentage point, which on a
large rate base is a very large number.

Most cases settle. The settlement is a negotiated revenue requirement that the
commission approves, usually without resolving the individual disputes. That is
why the final order in a rate case frequently does not explain what any
particular number represents.

The record itself, however, is public, and it contains the utility's own
forecast of load growth, its capital plan, and its statement of what it intends
to build. For anyone trying to understand where a bill is heading, the filed
capital plan is a better predictor than any commentary about it.


The Only Variable a Household Controls

Three of the four components are set by processes no individual customer
influences. The fourth variable — consumption — is entirely within the
household, and its arithmetic is often underestimated.

The rate is dollars per kilowatt-hour. The bill is that rate multiplied by
kilowatt-hours consumed. A household facing a rate it cannot change still
determines the multiplicand.

The distribution of household consumption is more concentrated than most
people expect. Space conditioning and water heating dominate in most homes, and
the largest single lever in a cold climate is usually the heating system, while
in a hot one it is the cooling load and the building envelope that determines
it.

The measurement is available. Utilities with advanced metering publish
interval data, usually hourly, through the customer portal. A household with
that data can see exactly which hours carry the load and what changed when
something was adjusted, which converts a guess into an observation.

The comparison that makes interval data useful is not month against month,
which confounds weather with behavior. It is a comparison against degree days
for the same period, which is a published figure for every weather station.
Consumption that rises while degree days fall is a change in the house rather
than a change in the season, and that distinction is the one that identifies
whether anything is actually wrong.

Where time-varying rates are offered, the interval data also determines
whether such a rate would help or hurt, because the answer depends entirely on
when the consumption falls rather than how much of it there is.

The general point is that the bill is an equation with one term the household
sets and three set elsewhere, and that the three set elsewhere are documented
in public proceedings whose records are open. Both halves are knowable. Neither
is knowable from the total alone.


The bill, not the debate

A residential electricity bill is four prices added together — supply set in a
wholesale market, transmission set by federal formula, distribution set in a
state rate case, and riders set individually. They move on different clocks and
for different reasons. Look at your own last statement: can you say which of
the four went up?Connor Hill reads every reply.


Sources checked: U.S. Energy Information Administration — Electricity Monthly
Update, end-use prices
<[link removed]> · U.S. Energy
Information Administration — average price of electricity to ultimate customers
by end-use sector <[link removed]> ·
Federal Energy Regulatory Commission — transmission rates and formula rate
filings <[link removed]> · U.S. Energy Information
Administration — Residential Energy Consumption Survey, end-use consumption
<[link removed]> · Congressional Research Service
— electricity markets and regulation overview
<[link removed]> · National Association of
Regulatory Utility Commissioners — rate case and cost of service materials
<[link removed]>


Connor Hill · InsightfulWord





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