Press Release

PUC Approves Default Service Procurement, Implementation and Contingency Plan Settlement for UGI Utilities, Inc. – Electric Division

Published on 7/17/2008

Filed under: Electric

HARRISBURG - The Pennsylvania Public Utility Commission (PUC) today approved a settlement for a default service procurement, implementation and contingency plan for UGI Utilities, Inc. – Electric Division. 

The Commission voted 4-0 to approve the settlement because it allows UGI to commence supply procurement for its customers, as well as reduces litigation expense and avoids creating inter-class subsidies.  The settlement was reached between the company and the formal complainants in the case which included the Office of Consumer Advocate, the Office of Small Business Advocate, and the Commission’s Office of Trial Staff.

Under the settlement, UGI will rely on competitive wholesale market purchases to obtain power for the company’s default service customers.   New generation rates resulting from these purchases will take effect Jan. 1, 2010.

In a statement, PUC Vice Chairman James H. Cawley, said “this unique approach should provide better protection from congestion risk relative to the base filing” and also asked the company to provide answers to specific questions in its future compliance filings no later than Sept. 1, 2008.

The 1996 electric competition law requires electric companies, or a Commission approved alternative supplier, to provide default electric generation service to customers who have not selected an alternative generation supplier. This is commonly called default service or provider of last resort service (POLR). The default service prices for electric generation service are required to reflect “prevailing market prices,” according to the law. Customers do have the right to choose an electric generation supplier other than UGI.

The generation rates for the state’s electric customers were capped as a result of settlement agreements reached during the state’s restructuring proceedings. Electric generation prices are not set by the PUC, but rather are set by the wholesale market, over which the PUC exercises no jurisdiction. UGI’s caps expired in 2002.  The existing default service plan for the company expires Dec. 31, 2009.

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.  P-2008-2022931

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov