HARRISBURG – The Pennsylvania Public Utility Commission (PUC) Thursday approved an amended Joint Petition for Approval of Settlement highlighted by a lower than requested increase in rates for natural gas distribution services provided by UGI Utilities, Inc. – Gas Division (UGI).
The Commission voted 5-0 to adopt both a motion from Vice Chairman David W. Sweet concerning the review process for UGI’s Customer Assistance Programs (CAPs) and the Recommended Decision by Administrative Law Judge Christopher P. Pell. Among other things, the Recommended Decision provides for an annual distribution rate revenue increase of $30 million (3.7%), to become effective on or before Oct. 29, 2019. UGI sought an increase of $71.1 million (8.9%) in its initial filing of Jan. 28, 2019.
Vice Chairman Sweet’s motion further clarifies a settlement requirement for UGI to conduct quarterly reviews of rate plans for its CAP customers – in an effort to determine whether a more affordable rate plan is available for a CAP customer. Vice Chairman Sweet’s motion reaffirms the settlement’s intent of a $125,000 limit on information technology costs associated with formalizing this practice in UGI’s customer billing system. Joint Petitioners to the settlement have five days from entry date of an Order modifying the settlement in which to withdraw from said settlement.
Commissioner Andrew G. Place, in a statement of support, highlighted a settlement provision in which UGI commits to working with stakeholders to explore the possibility of a virtual storage proposal filing with the Commission by Oct. 1, 2020 – therefore, providing competitive natural gas suppliers with more equitable access to system transportation, storage and peaking assets.
Today’s approved settlement creates uniform rates by rate classes across the utility’s three rate districts – UGI South Rate District (UGI South), UGI North Rate District (UGI North) and UGI Central Rate District (UGI Central). The rate impact of the settled revenue allocation on Residential Heating (RH) customers is as follows:
In UGI South, the monthly bill for a typical customer using 64 Ccf per month will increase by $8.31, from $63.81 to $72.11 (13.0%). Under UGI’s proposal, the average monthly bill for the same customer would have increased by $10.48 per month, from $62.45 to $72.93 (16.8%).
In UGI North, the monthly bill for a typical customer using 92.3 Ccf per month will increase by $0.08, from $91.13 to $91.22 (or 0.1%). Under UGI’s proposal, the average total monthly bill for the same customer would have increased by $7.65 per month, from $89.72 to $97.37 (8.5%).
In UGI Central, the monthly bill for a typical customer using 79 Ccf per month will decrease by $15.69, from $95.39 to $79.70 (-16.5%). Under UGI’s proposal, the average total monthly bill for the same customer would have decreased by $7.77 per month, from $93.68 to $85.91
Additionally, under the settlement all three rate districts will have a uniform monthly customer service charge, which for residential customers will be $14.60 per month. In its initial filing, UGI had proposed a monthly customer charge of $19.00 per month for residential customers.
The settlement also includes a five-year extension of UGI’s Growth Extension Tariff (GET Gas) pilot program, which enables UGI to expand into additional underserved and unserved areas in its service territory. As part of the extended pilot program, UGI will include in each of its annual reports an economic evaluation including cost, saturation and revenue projections for each GET Gas project.
Finally, the settlement addresses federal tax savings for UGI by extending the current temporary federal tax credit on customer bills for a 12-month period – beginning on the effective date of new rates and reducing the distribution rate portion of customer bills by 4.5 percent during that 12-month period.
NOTE: In May 2018 the PUC ordered 17 major utilities (including UGI) to begin returning excess federal tax savings to customers, in the form of a monthly credit on customer bills, until each of those utilities could come before the Commission with new rate filings – at which point any future tax savings would be considered as part of new rates.
The settlement was supported by UGI; the PUC’s independent Bureau of Investigation and Enforcement (I&E); the Pennsylvania Office of Consumer Advocate; the Pennsylvania Office of Small Business Advocate; and several Complainants. UGI provides service to more than 639,000 residents and businesses in 45 counties across Pennsylvania.