UGI Penn Natural Gas Thursday filed a request with the Public Utility Commission to increase its base rates for residential, commercial and industrial customers by $21.7 million annually or 10.6 percent for the average residential customer.
Even with the base rate request, UGI Penn Natural Gas residential heating customers would be paying 39 percent less on their total average bill than in August 2009, when UGI Penn Natural Gas’ last base rate increase was implemented.
The base rate increase would fund ongoing system improvements necessary to maintain safe and reliable natural gas service, as well as proposed new programs such as an energy efficiency and conservation program that would provide financial incentives to encourage customers to reduce their energy consumption.
“UGI Penn Natural Gas is working hard to manage costs and improve system performance while continuing our commitment to safely and reliably deliver natural gas to our customers and the many communities we serve,” Paul Szykman, UGI Vice President of Rates and Government Relations, said.
Szykman also noted that since its last rate case in 2009, UGI Penn Natural Gas has made significant system investments.
“UGI Penn Natural Gas anticipates investing $168 million in capital projects to upgrade our system over the next two years, bringing our total investment to over $400 million since the last base rate case,” Szykman said. “This includes not only a continuation of our infrastructure betterment initiative focused on pipeline replacement, but also an upgrade to a new customer information system.”
UGI Penn Natural Gas’ base rate increase request will impact one of the two major cost components that appear on customers’ natural gas bills. The delivery charge, which this proposal would increase, provides a utility with the funds needed to own, operate and maintain the gas distribution system and provide customer service and emergency response services.
The other component of customers’ bills, which will not be affected by Thursday’s base rate filing, is the purchased gas commodity charge and reflects the actual cost the Company pays to purchase gas on the wholesale market, with no profit markup.
In fact, in December 2016, UGI Penn Natural Gas lowered its gas commodity charge. The December 2016 purchased gas cost decrease is a continuation of a nine-year trend of moderating natural gas prices.
If UGI’s base rate case is approved, the bill for a typical UGI Penn Natural Gas residential heating customer who uses 91.2 hundred cubic feet of gas (ccf) per month will increase $8.34 or by 10.6 percent from $78.53 to $86.87 per month.
The bill for a typical UGI Penn Natural Gas commercial heating customer who uses 29.6 thousand cubic feet (Mcf) per month will increase $22.35 or by 11.5 percent from $194.25 to $216.60 per month.
The bill for a typical UGI Penn Natural Gas industrial customer who uses 97.4 thousand cubic feet (Mcf) per month will increase $65.17 or by 11.6 percent from $561.06 to $626.23 per month.
UGI Penn Natural Gas is requesting that the new gas rates take effect March 20, 2017. However, the PUC typically suspends the effective date for general base rate proceedings to allow for investigation and public hearings.
The PUC proceeding is expected to last approximately nine months, which would delay implementation of the new rates until late October 2017.
Customers and interested parties may view UGI Penn Natural Gas’ base rate filing materials on the Company’s website.
Customers with questions may also call UGI Penn Natural Gas toll-free at 1-800-276-2722 to receive further information on the proposed rate increase or to find out what actions they make take.UGI Penn Natural Gas serves more than 166,000 customers in 13 counties throughout northeastern and central Pennsylvania, including customers in and around Scranton, Wilkes-Barre and Williamsport.