Phila. natural gas bills to drop, but PGW gets relief

Philadelphia natural gas customers will get a break in their bills, at least in coming months, under new rates approved today that also will help Philadelphia Gas Works, state regulators said.

The Pennsylvania Public Utility Commission, meeting in Harrisburg, said it granted PGW's "emergency" request to raise its base rate by $60 million in 2009 only, to help it lower long-term financing costs and improve service.

The increase will offset a decline in PGW's actual cost for natural gas by $107 million, due to falling commodity prices. That means the net bill for customers will drop by about 4.2 percent, the commission said in a statement.

Commissioner Wayne E. Gardner said the commission acted to give PGW some relief from the falling prices, which could affect "the financial health of all of our reglated utilities."

"We are granting this rate relief and taking positive steps, with the assistance of the company, to assure that the rate increase that we are approving today will have the intended impact of moving PGW towards fiscal stability," Gardner said in the statement.

There was no immediate statement from PGW.

Last month, the city-owned utility requested the emergency $60 million increase, starting Jan. 1, because it was worried it will not be able to borrow as it usually does to make it through the winter. At the time, PGW projected that falling commodity prices would lower customers' commodity charge by $85 million.

On a separate issue, PGW agreed to pay $10,000 into a conservation fund and improve staff training to settle a dispute over its handling of a residential heating shut-off in 2006.

Eleven months after PGW shut off heat to the home, a house fire killed the resident. The commission later accused PGW of violating parts of the state Public Utility Code related to the incident.

The commission and PGW, which did not admit any wrongdoing, reached the settlement in August and finalized the settlement yesterday, the commission said.