Peoples Natural Gas Seeks Base Rate Change for Smart Modernization Plan
PITTSBURGH, Feb. 28, 2012 /PRNewswire/ — Peoples Natural Gas has filed a request with the Pennsylvania Public Utility Commission (PUC) for a base rate increase of $28.4 million, a 7.5% increase in annual revenues, to fund its Smart Modernization Plan. This plan began in 2011 to replace all cast iron pipes through the Peoples Natural Gas system. The base rate increase request also provides for the recovery of the Company’s ongoing business costs such as labor and benefit expenses, taxes, debt costs and a reasonable return on investment. The request requires investigation and approval by the PUC. The proposed effective date for the rate change is April 28, 2012.
“This request will help Peoples Natural Gas continue to invest in modernizing our pipeline infrastructure,” said Morgan O’Brien, CEO of Peoples Natural Gas. “In the last year, we have invested more than $100 million to improve our system infrastructure and modernize our pipelines. This not only means improved service to our customers, but new jobs for our region. And, this investment ensures the future safety for our customers and our communities.”
In February 2010, SteelRiver Infrastructure Fund North America LP acquired Peoples from Virginia-based Dominion Resources Inc. and re-established it as an independent natural gas company serving approximately 360,000 homes and business throughout 16 western Pennsylvania counties. Since then, Peoples Natural Gas has brought more than 200 jobs back to the Western Pennsylvania region. More than 90 new pipeline workers will be hired as part of the Smart Modernization Plan.
If the PUC approves the entire request, the total bill for an average residential customer would increase from $79.60 per month to $86.74 per month, an increase of $7.14 per month or 9.0%. The monthly bill for the average commercial customer would increase from $195.47 to $212.97 per month, an increase of $17.50 per month or 9%; and the monthly bill for the average industrial customer would increase from $2,308.04 to $2,339.66, an increase of $31.62 per month or 1.4%. Customers can contact Peoples Natural Gas with questions regarding the base rate filing at 1-800-764-0111. Additional details on the rate request are also available at www.peoples-gas.com.
Even with the proposed increase, the average residential bill for Peoples Natural Gas will remain less than the average bills charged by other natural gas companies in the region and will remain among the lowest in the state.
In addition to the base rate request described above, Peoples Natural Gas will file its annual required purchased gas cost filing on April 2nd. This filing recovers the cost of the natural gas commodity itself. The Company is not permitted to earn a profit on the natural gas commodity. The Company is required to periodically pass along those costs, up or down, to the customers. The pass-through cost for the natural gas comprises approximately 50 percent of the customer’s bill. Peoples projects that the April 2nd filing will result in a decrease in purchased gas cost rates effective October 1, 2012. This decrease will partially offset the impact of the base rate change request.
SOURCE Peoples Natural Gas