PA Commission Probes Rate Increase Affecting C&I Customers

The Pennsylvania Public Utility Commission voted on March 16 to investigate a proposal by Philadelphia Gas Works to increase to its distribution base rates by $70 million (11.6 percent) annually for its natural gas service.

The PUC voted 5-0 to investigate PGW’s proposal, which was filed on February 28 (Docket Number R-2017-2586783). The inquiry will determine how much, if any, of the requested rate increase is justified.

Under the new rate proposal, the total bill for a commercial customer using 332 Mcf per year would increase from $327.07 to $342.15 per month– or by 4.6 percent. Rates for an industrial customer using 717 Mcf per year would decrease from $712.81 to $694.58 per month– or by 2.6 percent.

The total bill for a residential customer using 76 Mcf per year would increase from $94.06 to $104.65 per month– or by 11.3 percent.

According to a report by the StateImpact, a reporting project of NPR member stations, warmer winters and more energy efficient appliances mean customers are using less natural gas, so the city-owned utility is making less money.

Indeed, the company claims it has seen an 11 percent decline in sales volume since 2009 — the last time it sought a rate hike.

Meanwhile, the cost of doing business has gone up and natural gas prices have gone down, utility spokesperson Barry O’Sullivan told the news outlet.

“Natural gas is only one portion of their bill,” he said. “There’s also the portion of their bill that goes to maintaining the 6,000 miles of pipe that brings that natural gas to the corners of the city.”

Last year, the Pennsylvania Public Utility Commission approved a 2.5 percent surcharge to help PGW speed up replacement of 1,500 miles of its oldest and leakiest gas mains, StateImpact reported.

O’Sullivan said the company has seen other costs rise over the years, including healthcare for its employees and maintenance of its two plants.

For now, the request has been suspended by the PUC for up to seven months; and will be assigned to the Office of Administrative Law Judge for public hearings and development of an evidentiary record, culminating in the issuance of a recommended decision.

A final decision by the commission must be made by November 28.

PGW provides natural gas service to approximately 500,000 customers in the city and county of Philadelphia.

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