Press Release

PUC Joins Coalition to Lobby Federal Government for Additional Resources for Low Income Families

Published on 10/31/2005

Filed under: Gas

         HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today joined a coalition of consumer advocates, utilities and government agencies in lobbying to establish a pilot program in the state to receive a share of natural gas collected as royalties by the federal government as an additional resource for helping low-income families this winter.

            “With the high prices of natural gas and the expectations of a cold winter, we are continuing to look for creative ways to help low-income families with their utility needs,” said PUC Chairman Wendell F. Holland. “This is a unique opportunity for the federal government to work with the state, consumer advocates and the industry to assist low-income consumers before they are faced with the demands of paying high winter heating bills.”

           Commissioner Kim Pizzingrilli said, “While Pennsylvania has a long history of helping the state’s most vulnerable consumers, the needs of low-income natural gas consumers are greater than the resources of our existing programs designed to help them. Awarding low-cost gas procurement through a royalties-in-kind grant would allow the state, utility companies and consumer advocates to build on our successes and reach more residents.”

             When collecting royalties from federal oil and gas leases, the Secretary of the Interior may accept payments in the form of product also known as royalties-in-kind (RIK), rather than cash. The Energy Policy Act of 2005 established a permanent RIK program at the U.S. Department of Interior (DOI). It allows the Secretary of the Interior to direct RIK volumes to the Strategic Petroleum Reserve, small refineries or low-income energy assistance programs.

            The Pennsylvania coalition submitted a request to DOI asking for the agency to allow the use of RIK gas molecules grants to assist low-income customers. The grants means DOI would sell the gas molecules to the state’s natural gas utilities for a rate lower than the cost of natural gas on the wholesale market. The savings will then be passed on to low-income consumers through grants. The gas utilities are willing and able to provide the RIK grant to consumers quickly and efficiently.

            The request cited Pennsylvania’s high demand for low-income assistance combined with the inability of the existing network of resources such as the Low-Income Home Energy Assistance Program (LIHEAP), utility Consumer Assistance Programs (CAP), Low-Income Usage Reduction Program (LIURP) and utility hardship funds to fully meet the needs of the state’s low-income consumers.

           Since this is the first year for the RIK grants, the coalition also asks that the DOI consider allowing Pennsylvania and its existing network of resources for low-income assistance to serve as a pilot RIK program. Allowing the state to serve as a pilot program would reinforce that reliance on existing programs is not enough to protect the health and safety of the state’s most vulnerable citizens, the request said.

          The following groups have joined with the PUC to form the coalition:

• Pennsylvania Department of Welfare
• Pennsylvania Office of Consumer Advocate
• Dollar Energy Fund
• Public Utility Law Project
• Utility Emergency Service Fund
• Pennsylvania Natural Gas Distribution Companies including Chartiers Natural Gas Co.; Columbia Gas of Pa.; Dominion People; Equitable Gas Co.; Gasco Distribution Systems Inc.; National Fuel Gas Distribution Corp.; PECO Energy Co. – Gas Division; PG Energy; Philadelphia Gas Works; PPL Gas Utilities; Public Service Electric and Gas Co.; UGI Utilities Inc. – Gas Division; and Valley Energy Inc.

        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.

Contact:

• Press Secretary
  717-787-5722