The Pennsylvania Public Utility Commission (PUC) has voted unanimously to approve a program that would allow Peoples Natural Gas Co. and its affiliates to charge monthly installments for the cost of expanding natural gas service to interested customers in underserved parts of the state.
Peoples Service Expansion Tariff (SET) was the latest to be approved by the commission. A five-year pilot program intended to minimize consumer costs associated with building out distribution networks, similar programs have also recently been approved for UGI Utilities Inc. and Columbia Gas of Pennsylvania.
Under most existing tariffs, customers interested in natural gas service must pay the costs of system extensions in an upfront payment, which can often amount to thousands of dollars, according to the PUC. The program allows eligible residential customers to pay those costs through a monthly fixed fee of $55, for a maximum of 25 years, until the outstanding balance is zero. A customer can also pay a portion of the extension costs upfront in order to bring the financing period down.
Utilities throughout the state have forecast growth due to anticipated fuel-switching as consumers look to save with cheaper, locally sourced natural gas produced in the Marcellus and Utica shales. They have also said sourcing local gas is becoming increasingly important as industry and power generation demand is rising in certain service territories because more customers convert from oil, electricity and propane (see Daily GPI, March 24).
"Pennsylvania sits on top of one of the largest natural gas reserves in the world. As a result, Pennsylvania consumers and businesses should have every reasonable opportunity to take advantage of this efficient and clean-burning natural resource," said PUC Commissioner Pamela Witmer. "We continue to challenge other natural gas utilities operating in underserved or unserved areas of the Commonwealth to begin thinking creatively on how they, too, can bring a homegrown fuel to more Pennsylvania businesses and homeowners."
Peoples provides natural gas service to 700,000 customers in Pennsylvania, West Virginia and Kentucky. The company estimated that 360,000 customers in western Pennsylvania use a fuel other than natural gas to heat their homes. After its SET was approved, it said it was already in negotiations to expand service with one rural community in the region and added that it would be conducting public meetings to gauge interest in the program.