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Utility Withdraws Proposal To Unbundle Certain Costs From Base Rates, Move To Supply Rate
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As part of a settlement in its annual gas supply cost proceeding, UGI Utilities, Inc. – Gas Division has withdrawn, without prejudice, its proposal to recover, in the purchased gas cost (PGC) rates, costs related to participation in pipeline proceedings at FERC
UGI had, in its original annual 1307(f) PGC filing, noted that its activity before FERC, in various pipeline matters, has increased in recent years, and noted that its FERC activity is designed to, among other things, minimize gas costs
As such, UGI proposed to recover costs relating to participation in FERC pipeline cases, including costs for outside counsel and witnesses, through the PGC
These FERC participation costs are currently recovered through distribution rates
As part of the unbundling, UGI also proposed to include such FERC participation costs in the Weighted Average Cost of Demand (WACOD) applicable to Choice and transportation customers, "because these customers also rely on capacity
obtained by UGI Gas, the costs of which are impacted in FERC proceedings where UGI
Gas represents its customers’ interests."
The Office of Consumer Advocate opposed UGI's proposal, calling UGI's argument "mistaken reasoning" that could lead to, "costs associated with any activity that assisted UGI in minimizing its purchased gas costs [being] eligible for recovery through PGC rates."
Under a settlement among UGI, Pa. PUC Investigative Staff, and the Office of Consumer Advocate, UGI agreed to withdraw its proposal to move FERC participation costs to the PGC
In doing so, UGI reserved the right to make such or similar proposals in future gas supply cost or delivery rate cases, including proposals, "regarding unbundling these [FERC] costs from base rates and moving them into PGC rates[.]"
The settlement is unopposed by any major party to the proceeding, and no customer submitting a complaint under the 1307(f) proceeding has filed opposition to the settlement
An ALJ has recommended adopting the settlement without modification
R-2024-3048828
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September 6, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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