Posted on Thu, Sep. 29, 2005
Officials look into PGW's rate request
Consumer advocates and legislators are working to help customers cope with the proposed 19.4 percent increase. Some seek to block the boost entirely.
By Anthony S. Twyman
Inquirer Staff Writer
The Philadelphia Gas Works' request to raise rates by 19.4 percent starting next Friday has sent local and state politicians and consumer advocates scrambling for ways to offset and maybe even stop the hefty increase.
PGW, which has a half million customers in the city, has asked the state Public Utility Commission to approve the rate increase, which PGW says would increase the typical residential customer's heating bill by about $335 a year.
The utility's request is on top of a 4.9 percent rate hike that kicked in on Sept. 1. The commission may act on the request at its Oct. 6 meeting, according to a commission spokeswoman.
Although the commission has the final say on whether the rate increase goes into effect, local and state officials say they will thoroughly examine the utility's request to see if it is justified.
"We're just going to have to take a look at it," said Irwin "Sonny" Popowsky, the state's consumer advocate.
Some have already decided that it is not justified.
"It will be impossible for many PGW customers to afford this rate increase and implausible for the rest," wrote State Sen. Michael Stack and State Rep. Michael McGeehan, both Philadelphia Democrats, in a letter to Thomas Knudsen, PGW's chief executive officer.
The two legislators called on PGW to use the nearly $5 million it has allotted for lobbyists, consultants and lawyers in an effort to bring tankers of liquefied natural gas up the Delaware River to Port Richmond to a proposed import terminal.
But PGW officials say the terminal and its liquefied natural gas would give them a reserve to help meet demand during periods when wholesale prices are high.
"Communities that have liquefied-natural-gas terminals are not reeling from the hurricanes that hit the Gulf [of Mexico]," said Doug Oliver, a PGW spokesman.
Oliver also said the terminal, which would be used as a staging area for tankers bringing liquefied gas up the East Coast, would bring the utility an estimated $25 million annually in fees, which would help offset the rising wholesale costs of natural gas.
"We're spending money with the prospect of bringing that money back in," Oliver said.
Locally, several City Council members said they would take a close look at PGW's request and seek ways to help the poor.
"The question is: How do we deal with those people who can't afford it?" said Councilwoman Marian Tasco, who chairs the Philadelphia Gas Commission.
Councilman Juan F. Ramos, a fellow Gas Commission member, expressed frustration.
"I personally find it very, very difficult in good conscience to accept this, but the Gas Commission does not have the authority to turn this down," Ramos said.
Several state legislators are exploring options to reduce the costs, especially for low-income customers.
State Sens. Vincent Hughes (D., Phila.) and Jay Costa Jr. (D., Allegheny), for example, have asked Gov. Rendell to consider allotting $80 million to the Low Income Home Energy Assistance Program.
While New York has allocated $72 million and New Jersey $84 million, Pennsylvania provides no money to its program.
"We need to act now to head off a catastrophe," the legislators said in a letter to the governor.
Kate Philips, Rendell's spokeswoman, said the governor would soon roll out a number of initiatives designed to help ease the energy crunch and emphasize conservation, but no money has been budgeted for the legislators' proposal.
"There's no question that the energy situation is a top priority of the governor's right now," Philips said.
She said Rendell believes the federal government, not the state, should provide more money to the program.
Consumer groups are alarmed by the high number of low-income customers who have not signed up for PGW's assistance programs.
For instance, while there are 60,000 people enrolled in the utility's customer-responsibility program, which can reduce low-income customers' bills by up to 50 percent, at least twice as many people are eligible, according to PGW officials.
Jonathan Stein, an attorney for Community Legal Services, which provides legal help to the poor, said he believes PGW and other utilities do not do enough to alert low-income customers to the assistance programs.
Too often, Stein said, customer-service representatives for the utilities are more focused on collecting.
"They've been trained to be avid bill collectors," Stein said.
Oliver of PGW disagreed.
"We do a tremendous amount of outreach to our customers," Oliver said. "We encourage them to contact us at every opportunity."
Contact staff writer Anthony S. Twyman at 215-854-2664. Inquirer staff writer Amy Worden contributed to this article.
Return to Philadelphia LNG Terminal Proposal Home
Last modified: 22 October 2005