WILKES-BARRE — The Pennsylvania Public Utility Commission (PUC) on Thursday approved a settlement that substantially reduces rate changes sought by UGI Utilities Inc. – Gas Division (UGI), cutting UGI’s initial request by nearly 35%, while enhancing customer service, expanding programs for income-qualified residents, and advancing new gas safety measures.
The Commission voted 3-1 to adopt the recommended decision of PUC Administrative Law Judges F. Joseph Brady and Alphonso Arnold III, who recommended the approval, without modification, of a Joint Petition for Approval of Settlement filed by the PUC’s independent Bureau of Investigation & Enforcement, UGI, the Office of Consumer Advocate, the Office of Small Business Advocate, and the Retail Energy Suppliers Association.
Additionally, the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania (CAUSE-PA) filed a letter indicating that it does not oppose the settlement.
UGI provides natural gas distribution services to approximately 706,000 residents and businesses in 46 counties throughout Pennsylvania.
In early spring, the PUC conducted a total of 12 public input hearings in the UGI rate case proceeding.
Revenues and rates
As approved, the settlement provides for an additional $65 million (5.3%) in annual operating revenues for UGI, compared to the company’s initial request for an additional $99.368 million (8.05%). The $65 million rate adjustment will be “phased in” — spread out over two phases to mitigate its potential impact on UGI customers:
• $40 million, effective Oct. 1, 2026
• $25 million, effective Oct. 1, 2027
Under this framework, the average monthly bill for a residential customer using 68.8 Ccf per month will increase by a total of $6.45 (5.7%) with a similar two-step phase-in — from $113.76 to $117.69, effective Oct. 1, 2026; and then from $117.69 to $120.21, effective Oct. 1, 2027.
In its filing, the company had initially proposed a one-time increase of $9.91 (8.7%) for the same residential customer — from $113.76 to $123.55 (8.7%).
UGI also proposed an increase in its residential customer charge, from the current $16.25 to $23 per month. The settlement allows for a smaller, incremental increase in the residential customer charge from $16.25 to $20 per month — with the customer charge set at $19, effective Oct. 1, 2026, and then $20, effective Oct. 1, 2027.
Additionally, the settlement contains a “stay-out” provision in which UGI agrees not to file another base rate increase until at least January 15, 2029.
Customer assistance
UGI’s low-income customers can benefit from several customer assistance measures included in the settlement, highlighted by:
• Automatic enrollment and recertification for the UGI’s Customer Assistance Programs (CAPs) — ensuring UGI customers eligible for assistance through the federal Low Income Home Energy Assistance Program (LIHEAP) can be enrolled or recertified.
• Additional contribution to “Operation Share” — a one-time, additional contribution of $250,000 by UGI to its Hardship Fund, along with a company commitment to maintain $1.5 million in total annual contributions.
• Expanded Arrearage Forgiveness Pilot Program — on April 1, 2027, UGI will implement an expanded program that gives income-qualified customers the option of a 24-month payment plan on 50% of their current arrears.
• Low-Income Customer Assessment and Outreach Pilot — regular progress updates on this pilot primarily focused on identifying and assisting low-income customers eligible for energy efficiency and assistance services but have not yet enrolled.
• Victims of domestic violence — updating protections for victims of domestic violence to also accept a written certification from a domestic violence counselor/advocate.
• Security deposit refunds — a company monthly review to ensure security deposits are not being collected from customers who are confirmed to be income eligible for CAP.
• Low income screening — a renewed effort to increase awareness among new and moving customers, non-emergency callers, and customers identified as low income through regular screening processes on their eligibility to participate in customer assistance programs.
• Targeted customer communications — convening a collaborative with interested stakeholders to discuss targeted customer communications regarding natural gas shopping.
Weather normalization pilot
UGI will conduct a new pilot with respect to its Weather Normalization Adjustment (WNA). Under this Second WNA Pilot — which will begin on Nov. 1, 2027, and continue through the company’s next base rate proceeding — the WNA will not apply to customers enrolled in UGI’s CAPs and a 5% deadband will apply.
Gas safety
UGI will continue reporting to the PUC’s Pipeline Safety Division (Pipeline Safety) on pipeline restoration costs and on its ten most expensive restoration projects per year over the past three years.
Additionally, UGI will provide a copy of any analysis produced at the conclusion of the Gas Technology Institute (“GTI”) pilot program investigating the use of Smart Remote Methane Detectors (“SRMDs”) to Pipeline Safety.
Furthermore, the company also agrees to host a technical conference open to parties, Commission personnel, and other natural gas distribution companies to review the results of the GTI pilot and to discuss policy and operational considerations regarding further deployment of Remote Methane Detectors and SRMDs.
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Reach Bill O’Boyle at 570-991-6118 or on Twitter @TLBillOBoyle.