UGI Penn Natural Gas to Increase Gas Cost Rates on June 1, 2007

Wilkes-Barre, PA (May 16, 2007) –  UGI Penn Natural Gas, Inc. (UGI PNG) announced that its purchased gas cost rates will increase on June 1, 2007 due to higher wholesale natural gas prices.  As a result, the average residential heating customer’s bill will increase by approximately 9.9%.

On June 1, UGI PNG will also submit its annual filing with the Pennsylvania Public Utility Commission (PUC) to establish purchased gas cost rates for December 1, 2007.  The projected December rates would increase bills an additional 4.6% from the rates implemented in June.

Wholesale natural gas prices dropped in 2006 and UGI PNG lowered its gas cost rates five times last year.  The increase this June will mark UGI PNG’s first purchased gas cost increase since December 2005.  According to Bruce M. Davis, Vice President of Gas Supply & Marketing, “Colder than normal temperatures in the late winter/early spring contributed to higher gas costs than we had projected when we decreased our purchased gas cost rates last December.  In addition, our current projections for the next heating season result in slightly higher natural gas prices, influenced by factors such as continued globally high energy prices and national weather forecasts for a hot summer and an active hurricane season.”

By law, utilities can not earn a profit on the natural gas commodity portion of a customer’s bill.  They are required to pass the cost of the natural gas they purchase directly through to customers without any markup.  UGI PNG is required to file its gas cost rates annually for review with the PUC and may adjust these rates quarterly or on an interim basis to reflect changes in wholesale natural gas prices.
If UGI PNG’s proposed rates are approved, the bill for a typical residential retail heating customer who uses about 100 ccf (hundred cubic feet) of natural gas per month will increase from $ 131.92 per month to $145.05 on June 1 and then to $151.67 on December 1.  The bill for a typical commercial retail customer using 438 ccf per month will increase from $522.04 per month to $579.53 on June 1 and then to $608.52 on December 1.  The bill for a typical industrial retail customer using 3,160 ccf per month will increase from $3,431.40 per month to $3,846.13 on June 1 and then to $4,055.31 on December 1.

Customers may call UGI PNG at 1-800-432-8017 to receive further information on the proposed rates or to find out what actions they may take.   UGI encourages customers to use energy wisely and make efficiency improvements in their homes.  Customers with a limited or fixed income should call UGI PNG to determine if they are eligible for one of several energy assistance programs.  Finally, any customer who is behind on their gas bills should contact the utility as soon as possible to discuss a payment arrangement.

UGI Penn Natural Gas, Inc., headquartered in Wilkes-Barre, Pennsylvania, is a wholly owned subsidiary of UGI Utilities, Inc. UGI Penn Natural Gas serves approximately 158,000 customers in 13 counties throughout northeastern and central Pennsylvania. For more information, visit www.ugipng.com.