Press Release

PUC Investigates PGW Rate Increase Request

Published on 2/8/2007

Filed under: Gas

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today voted to investigate a Philadelphia Gas Works (PGW) request to increase natural gas rates by about $107 million (11 percent).

         “PGW is No. 1 energy issue in Philadelphia,” said Commission Chairman Wendell F. Holland. “I would like to emphasize that public participation is a vital part of the ratemaking process. To that extent, I urge the Office of Administrative Law Judge to schedule numerous public input hearings in Philadelphia to ensure all consumers have the opportunity to have their say. Public input hearings provide consumers the opportunity for consumer testimony to become part of the record in the case.”

         The Commission voted unanimously to investigate the company’s proposal that would increase the annual bill for an average customer using about 89 Mcf of natural gas by about $160. The average annual residential bill would increase from about $1,727 to $1,887 (9.3 percent). PGW serves about 496,000 customers in Philadelphia.

         By operation of law, the proposal will be suspended for up to seven months for its proposed effective date. The Commission has until Sept. 20, to make a final decision at a public meeting in Harrisburg. The Commission action opens an investigation and assigns the matter to the PUC Office of Administrative Law Judge for a recommended decision that may approve, reject or modify the proposal.

         “As cold weather grips the city, the challenge facing this Commission is to strike a balance between needs of this unique consumer base with the fiscal needs of this company,” Chairman Holland said. “Today, we are ordering the examination of the filing made by PGW that will closely examine all sides of the issues in accordance with the procedures provided by the Public Utility Code. The Code provides for a ratemaking process that strives to achieve the lowest reasonable rate for consumers while maintaining the financial stability of the utility.

         “The Public Utility Code provides opportunities for the consumers to become involved in these cases. I encourage the PGW consumers to come forward and participate in this proceeding by sharing their opinions on the company’s proposal. The Commission takes the input of consumers very seriously.

         “Consumers also may contact the Commission informally with a phone call, e-mail or letter. I look forward to hearing from many interested parties in this case as together we look toward a solution.”

         According to the company, the increase is needed to recover non-gas operating expenses and interest expense; increase earnings to meet debt service obligations and to ensure the company has adequate liquidity when needed without continually borrowing.

        The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner. For recent news releases, audio of select Commission proceedings or more information about the PUC, visit our Web site at www.puc.state.pa.us.

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Docket No. R-00061931

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