Bills for suburban customers could go up 13% as PECO requests natural gas rate hikes

The Pennsylvania Public Utility Commission will consider a proposed natural gas rate increase for PECO’s suburban customers. PECO provides natural gas to about half a million customers in southeastern Pennsylvania. The rate increase would not apply to the cost of natural gas itself, but rather its distribution.

If approved, distribution rates would increase 13%, which would raise the average customer’s monthly bill from $95.31 to $107.70. Distribution costs are distinct from the rising cost of natural gas, which utilities are permitted to pass on to customers without markup. While natural gas prices have trended down since Pennsylvania’s shale gas boom started in earnest in 2008, they began to bounce back in 2021.

When requesting the rate hike in March, PECO pointed to the need to replace aging cast iron pipelines, which would make them safer and help cut carbon emissions. Researchers are increasingly documenting the impact of climate warming methane from natural gas distribution lines. If approved, the increase would generate an additional $82.1 million in annual revenue.

New rates had just taken effect for PECO residential customers on March 1, which lowered typical gas bills by $5.78 per month, or 3.2%.

In a statement, PECO President and CEO Mike Innocenzo acknowledged the additional costs related to rising energy prices nationwide.

“However, the investments included in this filing will support our commitment to provide the critical energy service our customers rely on,” Innocenzo said.

PECO says monthly bills for the average small business customer would be about $30.85, or 7.3%.

The PUC will make its decision by December 30, 2022. If approved the increase would go into effect in January 2023.PUC approves PECO natural gas project for neighborhood business area of Marple Twp.