Press Release

HARRISBURG, Pa. – Philadelphia Gas Works (PGW) customers will see their rates cut by $135 million beginning this month, based on a settlement approved today by the state Public Utility Commission (PUC).

The settlement lowers the cost customers pay for wholesale natural gas, called the gas cost rate (GCR), from $6.69 per thousand cubic feet (Mcf) to $4.37. An average residential customer using 100 Mcf per year will see his bill decrease by approximately $232, from $669 to $437.

The rate applies to service rendered as of Sept. 1.

"Fortunately, wholesale gas costs have been steadily declining across the nation," said PUC Chairman Glen R. Thomas. "This is great news for all gas customers. Knowing that their gas rates are going down is a wonderful way for PGW customers to head into the winter heating season."

PGW had originally projected a September GCR of $5.59 per Mcf, which would have lowered rates by $64 million annually.

State law prohibits gas utilities from making a profit on the purchase of wholesale natural gas. Utilities pass their costs directly through to customers and generally revise their rates quarterly to reflect the projected cost of gas for the upcoming three-month period.

At the end of each year, the PUC reviews what utilities paid for natural gas and what they charged their customers. If the utility overcharged customers, rates are decreased to account for a refund. Likewise, if a utility undercharged customers, rates are increased.

Today’s settlement also projects that the GCR for the quarter beginning Dec. 1 will drop to $3.61 per Mcf, which would cut customer rates by an additional $36 million.

Parties signing the settlement include the state Consumer Advocate, state Small Business Advocate, PUC Office of Trial Staff, Philadelphia Industrial and Commercial Gas Users Group, Consumer Education and Protective Association, Association of Community Organizations for Reform Now, Tenants’ Action Group and the Action Alliance of Senior Citizens.

For more information about the PUC, visit our website at http://puc.paonline.com.