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February 28, 2017

Warmer winters, more-efficient homes prompt PGW to request rate hike

Services Natural Gas
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Needing an additional $70 million annually to cover costs, the Philadelphia Gas Works is seeking to increase service rates on customers for the first time in eight years.

On Monday, PGW filed a request with the Pennsylvania Public Utility Commission for permission to raise prices due to declining sales and rising operating costs. The city-owned natural gas utility previously requested a rate adjustment in 2009.

According to estimates, the average monthly bill for residential customers would increase by $10.59, or 11.3 percent.

Craig White, president and CEO of PGW, blamed rising regulatory, healthcare and equipment costs for making the hike necessary.

“We recognize the pressures on hardworking families and businesses in Philadelphia," White said. "That’s why we’ve worked so hard to reduce our operating costs and identify new sources of revenue since our last rate increase.”

PGW officials also experienced a significant drop in sales volume due to climate change and improved technology in homes. Since 2009, natural gas consumption has decreased by 11 percent. The average residential customer uses 76 thousand cubic feet of natural gas per year.

“Since the last base rate increase, winters have become warmer and appliances and homes are more energy efficient,” said White.

The rate increase will also help PGW improve infrastructure to ensure safety.

The PUC is expected to rule on the request within nine months after conducting an investigation into whether the rates are "just and reasonable." During that time, the commission will hold public hearings and encourages input from residents.