Press Release

PUC Approves Annual Cost Recovery Increases for Pine Roe Natural Gas Co.

Published on 12/1/2005

Filed under: Gas

HARRISBURG –The Pennsylvania Public Utility Commission today approved an annual gas cost rate (GCR) increase for Pine Roe Natural Gas Co. that reflects direct costs to the company.

Natural gas utilities file for a GCR annually, which reflects the price paid by the utility for natural gas, reconciled with actual sales and costs from previous gas cost projections. By law, the utility cannot make a profit by charging consumers more than what it pays for the natural gas. The approved increases reflect a dollar-for-dollar pass through of those costs.

With the increase, Pine Roe Natural Gas customers will pay $9.9032 per MCF, an increase of $1.7949 per MCF. The 22.1 percent increase reflects the cost for the company to purchase natural gas. The company serves residents in Clarion County. The average natural gas customer in Pennsylvania uses about 103 MCF per year.

The Commission approved the new rate by a vote of 4-1. Commission Chairman Wendell F. Holland dissented. 

The Commission was concerned that if the companies were not able to pass on actually incurred costs such as the Gas Cost Rate (GCR), cash flow problems could ensue, hampering their ability to purchase natural gas and maintain reliable service in the coming months.

Local gas utilities are required to provide reliable natural gas service at the least possible cost. Every natural gas utility company is audited annually by the PUC to ensure the GCR they are passing on to the consumers reflects the costs they paid and that every effort was made to purchase the gas for the least possible price.

In filing for the GCR, the utility company recalculates its rates to reflect what it paid for the natural gas, and includes a reconciliation of undercollections or overcollections resulting from differences in actual sales and actual gas costs from prior projections. If the utility is found to have acted imprudently, if any costs are deemed not to have been made at least cost, or if the utility has over-collected its costs, the Commission has the ability to make adjustments in the annual GCR proceeding and order refunds to customers.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition.

For more information about the PUC and additional press releases, visit our website at www.puc.state.pa.us.

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Docket No. M-00051919

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