A potential strike was looming Tuesday as the contract for PECO workers expired, adding pressure at a time when the utility company is also proposing a significant rate increase for customers.

The labor uncertainty comes just as PECO announced plans to raise energy rates by more than 12% in the coming year, citing the need for long-term investment in its electric and natural gas infrastructure.

In a statement released Monday, company officials confirmed that a proposal has been submitted to the Pennsylvania Public Utility Commission. If approved, the plan would increase the average residential electric bill by about $20.08 per month, or 12.5%, while natural gas customers would see an increase of approximately $14.52 per month, or 11.4%.

The proposed changes would take effect on January 1, 2027.

PECO noted that a portion of the increase could be offset beginning in April 2027, potentially reducing monthly costs by about $2.30, or 1.3%, through two proposed cost-recovery mechanisms.

Company leadership emphasized that the request is aimed at strengthening reliability and preparing for future challenges.

“We understand that any increase in costs is difficult for families and businesses, and we don’t take this request lightly,” said PECO President and CEO David Vahos. “Our customers deserve a system they can depend on—especially as severe weather becomes more frequent. These investments will help strengthen the grid, reduce outages, and ensure safe, reliable service.”

According to PECO, the proposed funding would also support expanded customer assistance programs and improvements in overall service experience.

Officials added that the investment plan is designed to enhance grid resilience, modernize aging infrastructure, reduce the impact of extreme weather, and help customers transition to cleaner and more efficient energy options.