PGW residential customers will see monthly bills jump by about $6 on average starting in December

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Philadelphia Gas Works’ residential customers will pay about $6 dollars more a month, on average, starting Monday, Dec. 1. The rate hikes, which the Pennsylvania Public Utility Commission approved unanimously in October, includes an increase to the price of natural gas, as well as a $1 increase to the monthly residential customer charge.

The utility’s revenue will increase by $62 million, or a jump of about 9.3%, which is $43 million less than what PGW originally requested. The average customer bills are expected to rise from $92.60 to $98.70 a month, according to the PUC.

The rate hike comes six months after city residents endured an increase in electricity prices as PECO customers began paying on average $8 more each month starting in June.

A PGW spokesman said the Dec. 1 rate increase will not impact low-income residential customers enrolled in the utility’s Customer Responsibility Program. That program bills customers based on their income rather than usage. It can lower gas bills by up to 50% and can lead to forgiveness of past-due bills. The utility also offers payment assistance to those facing temporary hardships like unemployment or medical emergencies through its Customer Assistance Referral Evaluation Program, or Cares program.

To qualify for the Customer Responsibility Program, households have to earn less than $23,475 a year for an individual, or $48,225 for a family of four, which is based on 150% of the federal poverty level.

“It should be 200% or 250% of the federal poverty level,” said Pennsylvania’s Consumer Advocate Darryl Lawrence, who represents ratepayers in the case. “Even people at 300% of the federal poverty level are living on the edge of affordability.”

In November, struggling Pennsylvanians were not able to tap into the separate federal Low Income Home Energy Assistance Program, or LIHEAP, due to the government shutdown. PGW said it would not shut off gas to low-income customers during this period. The annual moratorium on winter shutoffs for low-income ratepayers among all utilities runs from December through March.

“The biggest problem is when customers who could qualify for those benefit programs aren’t aware of them, don’t apply for them, or face obstacles to participating in them based on documentation requirements,” said Rob Ballenger, senior attorney for Community Legal Services, which represents the Tenant Union Representative Network and the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania, both of which joined the legal process to argue against the proposed rate hikes.

Ballenger said those groups negotiated to have PGW use customer data from other state programs like LIHEAP to proactively enroll low-income customers in its affordability initiatives.

“That’s the kind of thing that we are pursuing to try to make sure that those rate increases don’t cause the lowest income households in Philadelphia to face unaffordable bills which ultimately, of course, would lead to a potential shutoff of their service,” Ballenger said.

Ballenger said the best thing a customer can do if they are struggling to pay their bill is to call PGW. Customers can also visit their neighborhood energy centers for help.

In a first, PGW will have to address climate change and surcharges

The Public Utility Commission allowed PGW to continue utilizing a surcharge known as “weather normalization,” but now requires the utility to review how it calculates the charge to be more in line with a warming climate by determining how it defines “normal” weather.

When winters are warmer than expected, which is increasingly the case due to climate change, customers often use less gas to heat their homes and buildings. The utility can make up for the loss through the added “weather normalization” charge. PGW also credits funds to customers when the winters are colder than expected. In 2022, during a particularly warm winter, weather normalization charges made headlines after customers received shockingly high bills that the utility later refunded after the outcry.

For the winter of 2023 to 2024, temperatures were 12.2% warmer than “normal,” resulting in less gas usage and an increased charges to customers totalling $25.6 million, according to PGW’s 2023-2024 financial report. Results of the study will be published the next time PGW seeks a rate hike.

For the first time, the PUC also approved a public engagement process to plan for Philadelphia’s long-term climate goal of zeroing out its greenhouse gas emissions by 2050. Environmental groups, which argue the utility should transition away from fossil fuels as a way to cut costs to the ratepayers and tackle climate change, pushed for the public engagement process.

Speaking at a rally in August, Patrick Houston, with Here for Climate Justice, praised PGW’s commitment in the settlement agreement to budget $9 million to improve insulation and weatherize low-income customers’ homes in 2026.

“This proposed settlement represents an important step towards a clean energy future for Philadelphia, and it provides critical protections for Philadelphians against increasing energy costs,” Houston said.