UGI seeks Pennsylvania regulator’s approval for natural gas rate hike

A typical residential heating customer’s monthly natural gas bill would increase by 9.5% under a rate hike requested by UGI Utilities Inc.

The company filed a request Friday with the Pennsylvania Public Utility Commission to increase its base rates for residential, commercial and industrial customers to generate an additional $82.7 million per year.

The requested hike would help UGI pay for system improvements and operations to maintain safe, reliable natural gas service, according to the company.

A residential gas bill has two key parts: the purchase price of gas and the delivery service charge. If the PUC approves UGI’s entire request, a typical residential heating customer will see their total bill rise from about $98.62 to $108.01 per month, with the increase reflected in the delivery service charge.

UGI’s filing includes more than $795 million in investments for system infrastructure, facilities and information technology upgrades that are not yet included in current delivery charge rates, according to a press release.

The request comes a day after an equipment malfunction knocked out natural gas service to about 1,400 UGI customers in the Milford area of Pike County, leaving many without heat amid bitterly cold conditions. The utility had more than half of those customers back on line as of Friday morning, UGI spokesman Joseph Swope said. By Friday evening, UGI had restored service to all but a small number of customers due to a lack of access or other issues, he said.

“That’s an unfortunate incident in Milford and we are working hard to address that, but that’s why we continually invest in infrastructure,” Swope said.

UGI’s purchased gas cost rates increased three times over a six-month period in 2021. Those hikes on June 1, Sept. 1 and Dec. 1 increased the average residential heating customer’s bill by about 2.1%, 6.1% and 9.6%, respectively.

By law, UGI is not allowed to profit from gas and is required to pass the cost of the natural gas it purchases directly through to customers without any markup. Those three increases fell into that category.

UGI is requesting the new rates take effect March 29, but the company noted in its Friday release that 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,” according to UGI.

Even modest increases in utility costs can have a serious impact on people facing financial difficulties and those on fixed incomes, said Jessica Wallo, vice president of programs and services for the nonprofit United Neighborhood Centers of Northeastern Pennsylvania. That’s especially true as the cost of food, household items and other consumer goods continues to climb, she said.

“Even a small increase with the utility is really going to add up at the end of the month and the end of the year,” she said. “So somebody may be without something else that they really need in order to make sure that their utility isn’t going to be shut off.”

Support is available for those who qualify. Call UNC at 570-343-8835 from 9 a.m. to 5 p.m. Monday through Friday for information on utility assistance programs.

UGI also offers several programs that tailor payments based on income and other factors. For more information, call 1-800-844-9276.