Peoples TWP wants rate hike of almost 30%
The Peoples TWP natural gas company has proposed a rate change that will cost the average residential customer nearly 30 percent more.
The company has asked the Pennsylvania Utility Commission to allow a base rate increase of $18.7 million. If the request is approved, the average residential customer, who Peoples TWP says uses 84 thousand cubic feet (Mcf) of gas a month, will see their monthly bill go from $79.22 to $101.71, according to spokesman Barry Kukovich.
That's an increase of a 28.4 percent.
By comparison, the Consumer Price Index for the Pittsburgh area rose 2.6 percent from the second half of 2011 to the second half of 2012, the Bureau of Labor Statistics.
Kukovich said an average commercial customer, which uses about 200 Mcf each month, will see their bill go from $208.53 to $219.70 — a 5.4 percent increase.
He also said the bill for the average industrial customer would increase 3.4 percent.
Kukovich attributes the increases to cost of “taking out old pipeline and replacing it with modern pipeline. It's expensive to do that, but it's too important safety-wise not to do it,” he said.
“The pipeline we're going after is unprotected bare steel,” he said. “Most of it was installed in the World War II era. It needs to be replaced.”
Kukovich said the company has to replace about 950 miles of pipeline and plans to replace, at most, 35 miles a year.
“If we'd be replacing pipe in a downtown business area, it takes a lot longer than in a rural area,” Kukovich said. “It all depends when and where we have to replace it.
“This project will most likely take decades.”
Kukovich said he doesn't expect the new rates to start showing up on the 62,000 customers' bills until next January, if they're approved by the state.
However, consumers could start seeing higher bills as early as this summer, according to Joe Gregorini, Peoples TWP vice president of rates and regulatory affairs.
Gregorini said the company could implement a 1 percent to 3 percent increase under a new Pennsylvania law that allows utility companies to start charging customers to recoup expenses for infrastructure improvements, while their rate increase is being considered by the PUC.
“This is the first time utility companies are allowed to ask for ‘cost recovery' for infrastructure replacement,” Gregorini said. “Water companies have had this available to them for years.”
The charge, officially known as Distribution Improvement System Charge, or DISC, can be charged to customers only until a rate hike is approved.
Jennifer Kocher, the press secretary for the PUC, said that companies applying to implement DISC have to meet certain requirements.
“They have to have a long-term improvement plan approved and have to had a rate case in the last five years,” she said.
DISC is audited annually to make certain that money collected goes to the designated projects, Kocher said.
Kocher said she believes many gas companies will revamp their infrastructure in the near future, but it remains to see how they'll pay for it.
“We're going to see a lot of companies (in the state) making an effort to replace that pipeline, because of how old it is,” she said. “But, it depends on how they want to pay for that pipeline. Whether they use the DISC, or a rate increase, or pay for it from within.
“There is an definitely an increased interest on replacing infrastructure in the state.”
R.A. Monti is a freelance writer.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- 1,500 lose power in Alle-Kiski Valley
- Springdale residents meet to combat drugs, suicides
- Work on Puckety Bridge in Murrysville set to begin
- Frazer TIF dealt financial setback
- ATI unions rally to maintain solidarity
- Judge sentences Arnold man already serving time to prison on federal charges
- New Kensington residents furious over road conditions
- New Kensington to consider bake shop
- Vandergrift works on flooding, sewage project issues
- New Ken police arrest cobbler robbery suspects
- Springdale counters despair with ‘HOPE’