Press Release

PUC Directs $3.6 Million in Refunds for Peoples Natural Gas, Columbia Gas to Help Low-Income Customers, Some Small Business Customers

Published on 4/15/2010

Filed under: Gas

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved petitions by Peoples Natural Gas Co. and Columbia Gas of Pennsylvania to contribute proceeds stemming from a settlement with Tennessee Gas Pipeline Co. to programs that help low-income customers pay their bills and to provide refunds for some small business customers.

 The Commission voted 4-0 on a motion by Vice Chairman Tyrone J. Christy to allow Peoples to contribute the residential portion of the proceeds received from the settlement to the Dollar Energy Fund. The Dollar Energy Fund, which is a non-profit organization that provides financial assistance to customers who are on a low or fixed income, will receive about $1.7 million. Small commercial customers will receive a quarterly gas cost rate credit. The total amount refunded to small commercial customers will be about $227,000.

Peoples provides natural gas service to about 360,000 homes in Mercer, Franklin, Lawrence, Beaver, Washington, Greene, Butler, Allegheny, Fayette, Westmoreland, Armstrong, Clarion, Indiana, Somerset, Cambria and Blair counties.

The Commission voted 4-0 to allow Columbia to contribute the residential portion of the proceeds it received from the settlement to its Hardship Fund. Columbia’s Hardship Fund, which provides assistance grants to customers who may not qualify for other financial assistance programs, or to those who still have a critical need for assistance when there are no other resources, will receive about $1.4 million. The total amount refunded to small commercial customers will be about $196,080.

Columbia provides natural gas service to approximately 373,000 residential and 38,000 commercial customers in Adams, Allegheny, Armstrong, Beaver, Bedford, Butler, Centre, Clarion, Crawford, Elk, Fayette, Franklin, Fulton, Greene, Indiana, Jefferson, Lawrence, McKean, Mercer, Somerset, Venango, Warren, Washington, Westmoreland and York counties.

On May 15, 1995, Tennessee Gas Pipeline Co. filed a settlement agreement with the Federal Energy Regulatory Commission (FERC), which resolved issues related to Tennessee’s recovery of certain environmental remediation cost in rates.  The settlement established a cost recovery mechanism for recovery of remediation costs for the period beginning Feb. 1, 1992. 

The companies had been paying the environmental surcharge to Tennessee and the amounts paid have been charged to customers, principally through purchased gas cost rates.  Over time, the funds collected through the surcharge exceeded Tennessee’s actual environmental remediation costs for the projects covered by the 1995 settlement.  Tennessee subsequently stopped collecting the surcharge from shippers in 2004 but continued to hold the over-collection under the terms of the 1995 settlement. 

Tennessee and the shippers on its system eventually negotiated the refund settlement to address the disposition of the environmental surcharge over-collection.  The refund settlement was approved by FERC, with a minor modification, by an order issued on Nov. 4, 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 website at www.puc.state.pa.us.

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Docket No. P-2010-2152149; P-2010-2157040

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