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The Pennsylvania PUC issued and order in Peoples gas’ rate case.

Peoples originally proposed a base rate change that would have increased its annual natural gas operating revenues by $156 million, or 18.7% over revenues at present rates, based on a Fully Projected Future Test Year (FPFTY) ending September 30, 2025. In this Opinion and Order, we shall approve an annual increase of $93 million in natural gas operating revenues, representing an increase of 11.1% over revenues at present rates, based on the Joint Petition that we will also approve.

Updated POR Discount Rates, Merchant Function Charges:

The actual MFC charges will be based on the application of the MFC percentages to the updated Purchased Gas Cost rates, effective October 1.

For residential Rate RS and Rate GS-T customers, the MFC will be set by multiplying a write-off factor of 2.200% times the gas cost charge, versus the current factor of 2.448%.

For Small, Medium, and Large General Service customers under Rates SGS, MGS, LGS and Rate GS-T, the MFC will be set by multiplying a write-off factor of 0.332% times the gas cost charge, versus the current factor of 0.211%.

The POR write-off discounts have also been updated, and equal the MFC write-off percentages

The new residential POR write-off discount is 2.20%, versus the current 2.49%.

The new non-residential POR write-off discount is 0.332%, versus the current 0.21%.

A POR administrative adder discount of 0.0213% will apply.

“Any shortfall in recovery of the uncollectible expenses and administrative costs of the POR program will not be recovered from sales customers.”

There is no change in the bypassable Gas Procurement Charge (GPC), which remains $0.0865 per Mcf for residential and Small General Service (SGS) customers.

Combined PNG and PG Rates & Tariffs:

The PUC’s order approves the merger of the current Peoples Natural Gas Division (PNGD) and Peoples Gas Division (PGD) rate districts into a single, combined distribution rate tariff.

Under the PUC’s order, AVC capacity charges will now be charged to customers at both PGD and PNGD, as a surcharge which is separate from the PTC.

Also, under the adopted consolidation of the PGD and PNGD rate districts into a single tariff, a new single, combined supplier tariff will apply.

The adopted new combined supplier tariff also changes the gas quality metrics applicable to NGS supplies, while adding explicit language allowing Peoples to reject non-conforming supplies.

Under the new tariff, unless otherwise agreed to by Peoples, NGS supplies shall not contain more than:

1. Seven (7) pounds of water per million cubic feet on an approved dew point apparatus.
2. Four (4) percent by volume total inerts including carbon dioxide, nitrogen, argon, and helium provided that total carbon dioxide content shall not exceed two (2) percent by volume.
3. Thirty hundredths (0.3) grains of hydrogen sulfide per 100 cubic feet.
4. Ten (10) grains of total sulfur per 100 cubic feet.
5. Two tenths (0.2) percent by volume oxygen.
6. No more than (5) percent Hydrogen.

In contrast, the current PNGD supplier tariff provides that NGS supplies shall not contain more than:

1. Seven (7) pounds of water per million cubic feet on an approved dew point apparatus.
2. Two (2) percent by volume of carbon dioxide.
3. Twenty-five hundredths (0.25) grains of hydrogen sulfide per 100 cubic feet.
4. Ten (10) grains of total sulfur per 100 cubic feet.

The new combined supplier tariff adds language stating that, “Nonconformance – If the gas offered for delivery by the NGS shall fail at any time to conform to any of the specifications set forth herein, then the Company shall notify the NGS of such deficiency and may at the Company’s option refuse to accept delivery pending correction by the NGS. Should any substances not in conformity with the quality standards specified herein enter the Company’s facilities and cause damage to gas meters, regulators and/or other equipment, or interruption of service, NGS shall reimburse the Company for the costs to repair such damage and for any related costs which the Company may incur to restore service to, and/or repair facilities, of its Customers, including payments made by the Company to Customers in settlement of claims arising out of interruption of gas service.”

Order rejects OCA’s proposed on-bill comparison of retail supplier costs and shadow-billed default service costs for shopping customers on utility consolidated billing:

Specifically, the PUC order rejects the Office of Consumer Advocate (OCA) proposal that Peoples should be required to provide additional customer “education” about shopping for those customers who are paying a retail supplier rate more than the price to compare, with OCA specifically proposing that Peoples’ utility consolidated bills should include a direct, “side-to-side, apples-to-apples,” comparison.

Peoples opposed OCA’s recommendations on the shopping comparison. While Peoples said that it was open to discussions concerning the provision of additional details to shopping customers to assist customers, “in deciding whether or not to renegotiate with their current supplier, to shop and choose another supplier, or return to default service,” Peoples said that,”the Commission’s policy on advising shopping customers is for the utility to post the price to compare.”

Peoples also suggested that the issue is better addressed in a generic proceeding, not a rate case.

A recommended decision from a Pennsylvania PUC ALJ had recommended denying OCA’s shadow billing proposal, and OCA did not file an exception to this aspect of the recommended decision. Thus, the Commission itself did not specifically address the shadow billing issue in ruling on the recommended decision and adopting the recommended decision.

Opinion And Order  (09/12/2024)
R-2023-3044549 (01/02/2024)