UGI agrees to less in rate hike settlement

“I believe measures like these ... are necessary and prudent to ensure reasonable access to service.” — Gladys Brown Dutrieuille, PUC chairperson

Lehigh Valley UGI Utilities customers will be paying more for natural gas, but the hike will be less than what the company initially sought.

State regulators voted 4-0 Thursday on a $20 million annual rate hike in two stages for UGI, which serves the Lehigh Valley and adjacent counties, and much of Pennsylvania.

The company had filed for a $74.6 million annual increase Jan. 28, but a settlement was reached recently, and an administrative law judge assigned to the case for the state Public Utility Commission recommended that the PUC approve it.

UGI’s rate hike will come in three parts, according to PUC documents, lifting the bill for a typical residential heating customer nearly 4%, or $3.13 per month. The increases are scheduled to take effect Jan.1, July1and Oct. 1 and will hike the bill to $84.67 a month.

UGI’s request would have increased the same residential customer’s bills by 10.6% a month.

The rate increase is UGI’s second in two years. The company and the PUC reached a settlement in September 2019 on a $30 million rate hike after UGI filed for a $71.1 million hike the previous January.

The settlement also prevents UGI from seeking a new rate increase until Jan. 1, 2022, at the earliest.

“UGI is pleased that we were able to come to a settlement that continues to provide safe and reliable service to our customers,” company spokesman Joseph Swope said. He declined to comment on reasons why the company agreed to one-fourth of the revenue amount it had sought.

The settlement also did not immediately increase the mandatory monthly customer charge. Instead, the PUC approved a temporary, one-year increase from Oct. 1, 2021, through Sept. 30, 2022.

Swope said the Oct. 1, 2021, increase will move the customer charge up from $14.60 to $15.31 a month; it will return to $14.60 the following Oct. 1., he said. The company had sought to raise the charge about 37%, or $5.35 a month, to $19.95.

Swope said the settlement also calls for the company to establish an emergency relief program to assist customers affected by the coronavirus pandemic.

PUC Chairperson Gladys Brown Dutrieuille said during the meeting that UGI has agreed to waive late fees charged to customers and also provide enhanced customer outreach to them as they deal with the economic fallout from COVID-19.

“I believe measures like these, agreed upon by the parties, are necessary and prudent to ensure reasonable access to service,” Dutrieuille said Thursday, as the commission continues to discuss ways to balance utility service and customers’ termination of service during the pandemic.

Various opponents, including the state Office of Consumer Advocate, which represents residential customers in rate cases, and the Coalition for Affordable Utility Service and Energy Efficiency in Pennsylvania, opposed the rate hike. People also had the opportunity to comment during two hearings in June.

UGI has said it needed the increase to recover ongoing costs related to system improvements and operations necessary to maintain safe and reliable natural gas service. Its request noted more than $373 million in “system investments” that were not included for recovery in current rates.

Headquartered near Denver, Lancaster County, UGI sells natural gas to more than 654,000 customers in 45 counties. It is a subsidiary of Fortune 500 company UGI Corp., which is headquartered in Valley Forge.