Press Release

PUC Approves Peoples, Peoples TWP Plans for Long-Term Infrastructure Improvements, Distribution System Improvement Charge

Published on 5/23/2013

Filed under: Gas

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved the petitions of Peoples Natural Gas Co. and Peoples TWP to begin implementation of its long-term infrastructure improvement plan (LTIIP) in addition to its distribution system improvement charge (DSIC).

The Commission voted 5-0 to approve the LTIIP and DSIC petitions, which were filed pursuant to Act 11 of 2012. PUC Commissioner James H. Cawley issued a statement.

The companies’ DSICs may not become effective before July 1, 2013. The Commission also referred several issues in the DSIC petitions related to tariff riders and tax calculations to the PUC Office of Administrative Law Judge for hearings.

According to the LTIIP, Peoples will replace an average of approximately 47 miles of pipeline per year during the five-year period of the LTIIP. Peoples plans to spend between $55 million and $71 million per year on pipeline, meter and service replacement, over the five-year period of the plan. Peoples provides natural gas service to about 360,000 customers in all or portions of 16 southwestern counties. 

According to the Peoples TWP LTIIP, the company will replace an average of approximately 28 miles of pipeline per year during the five-year period of the LTIIP.  Peoples TWP anticipates spending a minimum of $9.1 million per year over the five-year period of the plan.  Peoples TWP provides natural gas service to about 60,000 customers in portions of Armstrong, Butler, Cambria, Clarion, Clearfield, Indiana, Jefferson and Westmoreland counties. 

Act 11 requires and provides for, among other things, utilities to file the plans as part of any action to establish a distribution system improvement charge (DSIC) to recover reasonable and prudent costs incurred to repair, improve or replace certain eligible distribution property that is part of a utility’s distribution system. 

As of Jan. 1, 2013, public utilities could petition the Commission for approval to establish a DSIC. The petition must contain the following elements: 1) initial tariff; 2) testimony and exhibits to demonstrate that the DSIC will ensure the provision of adequate, efficient, safe, reliable and reasonable service; 3) long-term infrastructure plan; 4) certification that a base rate case has been filed within the past five years; and 5) any other information required by the Commission.  The petition must demonstrate that granting the petition and allowing the DSIC to be charged will accelerate the replacement of infrastructure.

On Feb. 14, 2012, Governor Corbett signed Act 11 of 2012, which allows jurisdictional water and wastewater utilities, natural gas distribution companies, city natural gas distribution operations, and electric distribution companies to petition the Commission for approval to implement a DSIC. Under the law, the DSIC must be designed to provide for "the timely recovery of the reasonable and prudent costs incurred to repair, improve or replace eligible property in order to ensure and maintain adequate, efficient, safe, reliable and reasonable

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.

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Docket No.

P-2013-2344595; P-2013-2344596 

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