Reading, PA (November 30, 2005) – UGI Utilities announced that it will raise its purchased gas cost rates, effective December 1, to reflect the higher cost of purchasing natural gas in the wholesale market following Hurricanes Katrina and Rita. As a result, the bill for a typical residential heating customer will increase approximately 14.4%, from $131.53 to $150.49 per month.
According to Vicki O. Ebner, UGI’s vice president of marketing & gas supply, “Today’s higher natural gas prices directly reflect the tight balance between supply and demand and the effects of a devastating hurricane season.” Even before the hurricanes, natural gas prices had risen steadily throughout the past year because supplies of natural gas have not grown as quickly as the demand for the clean burning fuel, which is increasingly used to generate electricity. Ebner explained that Katrina and Rita seriously disrupted natural gas production in the Gulf of Mexico, the source of much of the gas used in this region. While production is slowly being restored to pre-hurricane levels, the effects of the hurricanes are still being felt on natural gas production and prices.
As a result of rising gas prices, the U.S. Energy Information Administration estimates that U.S. households heating primarily with natural gas will spend, on average, 41% more for fuel this winter than last winter. Following the December rate increase, UGI’s rates will be approximately 32% higher than they were in December of 2004.
By law, utilities purchase natural gas from wholesalers and resell it to customers at the same price, without any mark up. These “purchased gas cost” rates may be adjusted quarterly to reflect the utility’s actual costs. Utilities earn their income through “distribution” or delivery rates, which are established through a “base rate” proceeding with the Pennsylvania Public Utility Commission (PUC). The last time UGI filed for a general base rate increase was 1995.
Even though temperatures have been generally mild to date, for the past several months UGI and the PUC have been urging customers to begin to budget and “Prepare Now” for higher winter heating bills. According to UGI’s Ebner, “We recognize that higher gas prices can place a serious burden on customers and we are committed to helping them manage their energy bills.” Ebner says customers should:
UGI has been conducting extensive outreach to educate customers on the availability of energy assistance. Customers can call 1-800-UGI-WARM to learn more about cash grants and special programs such as reduced rates and free home efficiency improvements, which are available to low-income customers. In addition, UGI recently announced that it was doubling its corporate contribution to its Operation Share Fuel Fund and had requested permission from the PUC to double enrollment in the Company’s Low Income Self Help Program, a step supported by Governor Rendell as cited in his “Stay Warm PA” campaign.
Finally, any customer who is unable to pay their UGI gas bills should contact UGI at 1-800-276-2722 as soon as possible to discuss their bill payment options. UGI will work closely with customers who are making a sincere effort to pay their utility bills and avoid service termination.
UGI Utilities’ headquarters is located in Reading, Pennsylvania. The utility serves 300,000 customers in 14 southeastern Pennsylvania counties. Additional information about UGI is available at www.ugi.com.