PUC Approves Lower Rate Increase than Requested by PGW
Published on 11/19/2020
Filed under: Gas
Settlement includes changes to PGW’s low-income program & COVID-19 relief with slight adjustments to customer charges
HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today approved a settlement that reduces a base rate increase filed by Philadelphia Gas Works (PGW) for natural gas distribution services.
The Commission voted 4-0 to approve a Joint Petition for Partial Settlement – which provides PGW with a total $35 million base rate increase, with phased-in increases as follows:
- $10 million for service rendered on or after January 1, 2021;
- An additional $10 million for service rendered on or after July 1, 2021; and
- $15 million for service rendered on or after January 1, 2022.
Under the settlement, a residential customer using 75 thousand cubic feet (Mcf) per year will see a total increase of 5.2% - with increases in their monthly bills as follows:
- From $99.52 to $101.02 (1.5%) on January 1, 2021;
- From $101.02 to $102.53 (1.5%) on July 1, 2021; and
- From $102.53 to $104.78 (2.2%) on January 1, 2022.
Under PGW’s original request, filed on Feb. 28, 2020, the company would have increased operating revenues by approximately $70 million per year (10.5%) – with the monthly bill for a typical residential heating customer that uses 75 Mcf per year increasing from $99.52 to $110.68 (11.2%).
In the settlement PGW agrees to forego recoupment of revenues that it otherwise would collect if such a phased increase were not put in place – though PGW is permitted to slightly increase customer charges. For residential customers, the customer charge would increase in phases, on the same schedule as the overall rate increase, with the charge increasing in total by $1.15 (8.4%) by the third general rate increase, from $13.75 to $14.90 per month.
Additionally, the settlement includes “COVID-19 Relief Plan” which will provide a bill credit of $300 and other enhancements to up to 6,660 PGW customers whose circumstances have been adversely affected by the pandemic; and changes to the Company’s low-income program and data collection and reporting requirements.
The Joint Petition for Partial Settlement was entered into among PGW, the PUC’s independent Bureau of Investigation & Enforcement, Pennsylvania’s Office of Consumer Advocate, the Commonwealth’s Office of Small Business Advocate, and the Philadelphia Industrial and Commercial Gas Users Group.
PGW provides service to approximately 500,000 residential, commercial and industrial natural gas customers in the City of Philadelphia.
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.: R-2020-3017206
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