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UGI to Increase Natural Gas Rates

16 May 2007

Reading, PA (May 16, 2007) – UGI Utilities, Inc. – Gas Division (UGI) 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 3.9%.

On June 1, UGI 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 3% from the rates implemented in June.

Wholesale natural gas prices dropped in 2006 and UGI lowered its gas cost rates five times last year. The increase this June will mark UGI’s first purchased gas cost increase since December 2005. According to Vicki O. Ebner, Vice President of Marketing & Gas Supply, “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 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’s proposed rates are approved, the bill for a typical residential retail heating customer who uses about 85 ccf (hundred cubic feet) of natural gas per month will increase from $ 128.37 per month to $133.37 on June 1 and then to $137.42 on December 1. The bill for a typical commercial retail customer using 393 ccf per month will increase from $586.32 per month to $609.26 on June 1 and then to $628.03 on December 1. The bill for a typical industrial retail customer using 1,006 ccf per month will increase from $1,474.69 per month to $1533.35 on June 1 and then to $1,581.35 on
December 1.

Customers may call UGI at 1-800-276-2722 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. All customers are encouraged to sign up for UGI’s free budget billing program, which spreads bills out over a 12-month period. Customers with a limited or fixed income should call UGI at 1-800-UGI-WARM 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’s Gas Division is headquartered in Reading, PA and serves 315,000 customers in 15 southeastern Pennsylvania counties. Additional information about UGI Gas Division is available at www.ugi.com.

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