PECO Energy Company

• 1. Introduction

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  PECO Energy Company lights up a region of 3.8 million people across southeastern Pennsylvania, yet its roots stretch back to 1881, when it was founded under the name Philadelphia Electric Company. By 1929 it had grown enough to incorporate formally. Today, that company serves roughly 1.6 million electric customers and more than 511,000 natural gas customers, making it the largest combination utility in the entire state of Pennsylvania.

  One striking number tells you something about the demand this company manages: on the 22nd of July 2011, PECO's electric load peaked at 8,983 megawatts in a single day, driven by summer air conditioning across a franchise area of 2,100 square miles. What does it take to keep that much power flowing reliably? And what happens when the public pushes back against the company's choices about where that power comes from? Those are the questions worth following here.

• 2. The Network Beneath Our Feet

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  PECO's service territory covers all of the city of Philadelphia and Delaware County, most of Bucks, Chester, and Montgomery counties, and the southeastern corner of York County. For natural gas, the footprint is slightly different: Delaware County is fully covered, most of Bucks, Chester, and Montgomery counties are included, and a small portion of eastern Lancaster County is served as well.

  Keeping that territory supplied requires an extraordinary amount of physical infrastructure. The company owns and maintains 1,067 miles of higher-voltage transmission lines, more than 12,933 miles of aerial electrical distribution lines, and 15,260 square miles of underground electrical distribution cable. Its natural gas network adds another 12,157 miles of transmission, distribution, and service pipelines.

  Voltage levels step down systematically as power moves from high-tension transmission lines into neighborhoods. Transmission lines carry 138,000 volts, 230,000 volts, and 500,000 volts. Subtransmission drops to 34,500 volts and 69,000 volts. Local distribution lines operate at 2,400/4,160 volts wye and 7,620/13,200 volts wye. PECO is also a member of the PJM Interconnection, the regional grid that coordinates electricity across a large swath of the mid-Atlantic and Midwest.

  Gas storage is another layer of the operation. A liquefied natural gas facility in West Conshohocken, Pennsylvania holds up to 1.2 billion cubic feet. A propane-air plant in Chester, Pennsylvania adds storage capacity of 1,980,000 US gallons. Twenty-nine natural gas city gate stations scattered across the territory link the local network to various interstate pipelines.

• 3. Historic Threads

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  Chester Waterside Station, originally constructed in 1916 for the Philadelphia Electric Company, was added to the National Register of Historic Places in 2007. It stands as a physical reminder of how long this company has been shaping the built environment of the region.

  Philadelphia itself holds a distinction that appears in almost no other American city: it still receives two-phase electric power in sections where upgrading the infrastructure is not practicable. Philadelphia is one of only two cities in the country where two-phase electrical service remains active. That legacy system, a technology largely abandoned elsewhere, persists because replacing it in certain dense urban blocks would be enormously disruptive.

  Until the 19th of June 1995, PECO also served about 35,000 customers in portions of Cecil and Harford counties in Maryland through a subsidiary called Conowingo Power Company. On that date, Delmarva Power acquired the Conowingo service area, pulling PECO's footprint back across the state line.

• 4. Mergers and Corporate Structure

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  In 2000, PECO Energy became part of Exelon Corporation when it merged with Commonwealth Edison's holding company, Unicom Corp. That transaction folded one of Pennsylvania's oldest utilities into a much larger corporate structure, and PECO now operates as a fully regulated transmission and distribution subsidiary within Exelon.

  About 2,300 employees work for PECO. Call center and field craft personnel among them are members of IBEW Local 614, the electrical workers union that represents a significant portion of the workforce.

  Financially, the utility runs as a capital-intensive business. In 2008, before its rate caps expired, PECO reported $5.5 billion in revenue and total assets valued at $9.8 billion. Since then, PECO's financial and operational metrics have been folded into Exelon's annual SEC Form 10-K filings rather than reported separately.

• 5. Rate Caps and the Energy Market

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  For twelve years, PECO's retail electric rates were capped as Pennsylvania managed its transition to a competitive electricity generation market. That period ended on the 31st of December 2010, when both the rate caps and the competitive transition charges on customer bills expired.

  Since 2011, PECO has purchased wholesale electricity from competitive market sources, with retail customers now charged the actual costs of procurement rather than a regulated ceiling price. A breakdown from Exelon's 2012 SEC Form 10-K shows what PECO's power supply historically looked like: nuclear energy accounted for 53 percent, fossil fuels and renewables for 12 percent, and purchased power for the remaining 35 percent.

  Residential electric usage makes up roughly 35 percent of PECO's total electric delivery and about half of annual electric revenue. Demand patterns follow the seasons reliably: summer peaks are driven by air conditioning, winter peaks by heating load. The company's record winter peak load came on the 20th of December 2004, when demand hit 6,838 megawatts. On the gas side, the highest single-day sales occurred on the 17th of January 2000, when customers drew 718 million cubic feet.

• 6. Nuclear Controversy and Solar Pressure

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  Community activist pressure in the 1970s and 1980s contributed to the delayed opening of nuclear power plants at PECO's Limerick Generating Station and the temporary cancellation of the planned Limerick 2 plant. Despite the opposition, both Limerick 1 and Limerick 2 were eventually built and producing power by 1990.

  Decades later, a different kind of pressure arrived. In 2015, the Earth Quaker Action Team began protesting PECO with a focused demand: expand the amount of solar energy purchased and source it specifically from North Philadelphia to create local jobs. At the time of those protests, PECO was purchasing enough solar energy to power 2,000 residential households, representing 0.14 percent of its total energy portfolio.

  The Earth Quaker Action Team argued publicly that PECO could generate up to 20 percent of its portfolio from solar energy. Rooftop solar sourcing from North Philadelphia, the group contended, would generate 70 jobs at minimum or potentially up to 4,000 new jobs in Philadelphia. PECO submits its energy procurement plans to Pennsylvania's state regulators twice each year, in March and September, and runs its bidding process for energy suppliers and wholesalers through a third party. Meanwhile, PECO's sister company Constellation operates as the third-largest developer of solar installations for commercial, industrial, and government customers in Pennsylvania.