Press Release

PUC Approves Gas Cost Rate Decreases for Three Natural Gas Companies

Published on 8/17/2006

Filed under: Gas

HARRISBURG, Pa. – Because the decreases reflect a reduction in direct operating costs, the Pennsylvania Public Utility Commission (PUC) today approved annual decreases for three natural gas companies.

The Commission approved the decreases by a vote of 5-0. The rates will go into effect Sept. 1, 2006.  The companies affected and the total gas billing rate (gas cost rate plus base gas cost) are:

• Valley Energy Inc.: Decrease $3.73 per thousand cubic feet (Mcf) from $11.56 to $7.83 (32.3 percent).
• Pike County Light & Power: Decrease $1.47 per Mcf (11.6 percent) from $12.74 to $11.27.
• Gasco Distribution Systems Inc. – Kane Division: Decrease 9 cents (.64 percent) from $12.68 to $12.77.

Natural gas utilities may file for an annual gas cost rate (GCR), which reflects the cost the company expects to incur for natural gas purchases between Sept. 1 and Aug. 31 of each year. The GCR reflects the actual price paid by the utility for natural gas, reconciled with actual sales and revenues from previous year’s gas cost projections. By law, the utility cannot make a profit by charging consumers more than what it pays for the natural gas. The approved decreases reflect a dollar-for-dollar pass through of those costs.

Local gas utilities are required to provide reliable natural gas service at the least possible cost. Every natural gas utility company is audited annually by the PUC to ensure the GCR they are passing on to the consumers reflects the costs they paid and that every effort was made to purchase the gas for the least possible price. If the utility is found to have acted imprudently, if any costs are deemed not to have been made at least cost, or if the utility has over-collected its costs, the Commission has the authority to make adjustments in the annual GCR proceeding and order refunds to customers.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as stewards of competition. For recent news releases, or more information about the PUC, visit our website at www.puc.state.pa.us.

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Docket No. M-00061966

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• Press Secretary
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