UGI Requests Natural Gas Base Rate Increase
28 Jan 2022
UGI Utilities, Inc. – Gas Division (UGI or Company) today filed a request with the Pennsylvania Public Utility Commission (PUC) to increase its base rates for residential, commercial and industrial customers by $82.7 million annually. The requested increase would recover UGI’s ongoing costs related to system improvements and operations necessary to maintain safe and reliable natural gas service.
If the Company’s entire request is approved, the total bill for a residential heating customer using 73.1 ccf per month would increase from $98.62 to $108.01 per month or by 9.5 percent.
The total bill for a typical commercial heating customer using 28.8 mcf per month would increase from $317.93 to $330.09 per month or by 3.8 percent. For commercial heating customers in the former UGI North rate district, the total bill would increase from $307.00 to $330.09 per month or by 7.5 percent.
The total bill for a typical industrial customer using 92.4 mcf per month would increase from $966.55 to $993.83 per month or by 2.8 percent. For industrial customers in the former UGI North rate district, the total bill would increase from $931.45 to $993.83 per month or by 6.7 percent.
The filing also includes a request for approval of a Weather Normalization Adjustment rate mechanism designed to stabilize distribution charges due to weather related usage changes differing from normal weather conditions. This rate mechanism will allow customers to better manage their energy costs during times of colder or warmer than normal weather. UGI has proposed that this adjustment would become effective with the November 2022 billing cycle for residential and certain commercial customers. The mechanism would only affect a customer’s distribution charges, not the actual cost of natural gas.
According to Christopher Brown, UGI Vice President and General Manager – Rates and Supply, “This rate increase will support ongoing distribution system improvements and technology system upgrades.”
The Company’s filing includes over $795 million in investments for system infrastructure, facilities and information technology upgrades which are not yet included in current delivery charge rates.
“A significant part of our ongoing investments is an infrastructure betterment initiative designed to replace all non-contemporary pipelines with those made of contemporary materials,” Brown said.
The UGI rate increase request will only impact the delivery charge portion of a customer’s bill. The delivery charge provides a utility with the funds needed to own, operate and maintain the gas distribution system and provide customer service and emergency response services.
UGI is requesting that the new gas rates take effect March 29, 2022. 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 2022.
Customers and interested parties may view UGI’s base rate filing materials on the UGI website at (www.ugi.com) by clicking on the “Rate Filing” link on the home page. Customers with questions may also call UGI 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 Utilities, Inc., Gas Division, serves more than 672,000 customers in 45 counties across Pennsylvania.