Thursday, June 30, 2016

PUC OKs DISC Infrastructure Improvement Plans For UGI, Peoples Natural Gas

The Public Utility Commission Thursday approved the modified long-term infrastructure improvement plans for Peoples Natural Gas, UGI Utilities Inc. - Gas, UGI Penn Natural Gas Inc. and Central Penn Gas Inc.
The Commission voted to approve the companies’ modified LTIIPs, which were filed in compliance with Act 11 of 2012. The Commission has continued to challenge natural gas distribution companies across the state to accelerate their replacement of aging cast iron and unprotected steel pipelines – in the interest of public safety and system reliability.
The approved, revised LTIIP for Peoples Natural Gas replaces the currently approved, separate LTIIPs of the Peoples Division and the Equitable Division (previously Equitable Gas Company) of the Peoples Natural Gas Co. Peoples’ Revised LTIIP is a five-year plan that builds off of, and expands upon, the previously-approved LTIIPs for the Peoples and Equitable Divisions.  
Peoples has replaced all known cast iron pipelines in its system, and plans to address accelerated replacement of the 37 miles of known cast iron pipelines acquired through its formation of the Equitable Division.
Peoples proposes to replace all bare steel and cast iron pipelines over an approximately 20-year period.
In its revised LTIIP, Peoples indicates it will replace all at-risk customer-owned service lines, which is an update from its original LTIIP where the company said it planned to pressure test customer-owned service lines prior to replacement.  
Peoples provides natural gas service to approximately 640,000 residential, commercial, and industrial customers in all or portions of 17 Southwestern Pennsylvania Counties.
In a separate action, the Commission voted to approve the modified LTIIPs for UGI Gas, UGI Penn Natural Gas and UGI Central Penn Gas. Each of the UGI Companies’ modified LTIIPs are five-year plans, spanning the years 2014-2018.  
The LTIIPs detail accelerated infrastructure improvements that are intended to enhance system resiliency.  
The instant petitions do not propose to change or extend the term of the current LTIIPs.  Rather, the instant petitions propose to increase the amount of infrastructure spending over that of the currently effective LTIIPs by more than 20 percent.
The UGI Companies as a group propose spending more than 50 percent additional capital in the final three years of their LTIIPs compared to the original projections.
Act 11 requires, among other things, that utilities file LTIIPs as part of any action to establish a Distribution System Improvement Charge (DSIC) to recover reasonable and prudent costs incurred to repair, improve or replace certain eligible property that is part of a utility’s distribution system.
As of Jan. 1, 2013, public utilities could petition the Commission for approval to establish a DSIC. The petition must contain the following elements: 1) an initial tariff; 2) testimony and exhibits to demonstrate that the DSIC will ensure the provision of adequate, efficient, safe, reliable and reasonable service; 3) a long-term infrastructure plan; 4) certification that a base rate case has been filed within the past five years; and 5) any other information required by the Commission.  
The petition must demonstrate that granting the petition and allowing the DSIC to be charged will accelerate the replacement of infrastructure.
On Feb. 14, 2012, Gov. Corbett signed Act 11 of 2012, which allows jurisdictional water and wastewater utilities, natural gas distribution companies, city natural gas distribution operations and electric distribution companies to petition the Commission for approval to implement a DSIC.
Under the law, the DSIC must be designed to provide for "the timely recovery of the reasonable and prudent costs incurred to repair, improve or replace eligible property in order to ensure and maintain adequate, efficient, safe, reliable and reasonable service.
For more information, visit the PUC’s Distribution System Improvement Charge webpage.

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