Philly gas customers to see lower bills starting Wednesday

Many Philadelphia Gas Works customers will pay less starting Wednesday, as market prices last week dropped to their lowest level in almost three years.

In the last few days, the city-owned utility has requested permission from the Pennsylvania Utility Commission for a gas cost decrease and a base rate increase. Combined, they could lead to customers paying about $9 less a month.

On Friday, PGW requested a rate decrease for the gas cost portion of customers’ bills. Starting Wednesday, customers will pay an average of nearly $20 less a month for this supply charge, which represents how much PGW pays for the amount of gas a customer uses, without a profit margin.

However, on Monday the company announced that it had also asked to raise base rates for gas customers. If approved, the customer would pay an average of about $12 more a month for that piece of the bill, which accounts for the costs of delivery, system maintenance, and billing.

“We do not take lightly adding any dollars to our rate base,” Seth Shapiro, PGW’s president and CEO, said in a statement, “but we are committed to robust social programs to protect our most vulnerable customers and to doing everything possible to keep our systems operating safe for all Philadelphia residents.”

PGW, which serves about 500,000 customers in the city, said Monday’s base rate increase request — a total of $85.8 million a year — reflects inflated costs of labor, materials, information technology, and construction equipment. The money would also allow PGW to replace its cast-iron infrastructure sooner than originally expected, the company said, improving safety and reducing methane emissions.

If the base rate increase request is approved and combined with the decrease in the gas cost portion of the bill, a customer’s total bill will be about $9 less a month, on average.

Natural gas prices have dropped about 65% over the last two months, hitting pandemic-era lows last week, as the United States built up a rare winter surplus of gas. By and large, temperatures have been unseasonably warm, and heating demand has been low.

Still, some people have seen energy bills continue to jump in recent months, regardless of how they heat their homes, due to inflation, the war in Ukraine, supply-chain issues, and other factors.

In New Jersey, more than five million residential PSE&G customers got good news last week. The company, whose coverage area includes parts of Camden and Burlington Counties, announced its second gas supply rate decrease this winter, with the latest reducing the customers’ monthly bills by an average of about $3 starting Wednesday.

Along with a supply rate reduction that took effect Feb. 1, customers’ monthly bills will be about $18 less than they were two months ago.

The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.