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Pennsylvania PUC Approves UGI's Infrastructure, Distribution Plans

The Pennsylvania Public Utility Commission (PUC) voted unanimously to approve two UGI Corp. subsidiaries' long-term infrastructure improvement plans (LTIIP), as well as plans to implement distribution system improvement charges (DSIC).

On Thursday, the commission approved, by a 5-0 vote, the LTIIPs and DSICs submitted by UGI Penn Natural Gas Inc. (UGI-PNG) and UGI Central Penn Gas Inc. (UGI-CPG).

According to the regulators, the LTIIP filed by UGI-PNG is a five-year plan to replace an average of 17 miles of pipeline per year, with the subsidiary spending nearly $23 million per year on pipeline replacements, service line improvements and safety device installations over the course of the entire five-year period.

UGI-CPG filed an LTIIP that also calls for replacing an average of 17 miles of pipeline per year, with the company spending nearly $14 million per year on the same items, also over a five-year period.

The PUC said both companies can implement DSICs once tariffs are filed, but some issues related to DSICs at both companies were referred back to the PUC's Office of Administrative Law Judge for further hearings.

After a 2011 natural gas explosion in Allentown, PA, that killed five people, UGI agreed to invest capital in an infrastructure replacement program as part of a 2012 settlement with the PUC (see Daily GPIFeb. 11, 2011). The PUC said Thursday that neither company can recover money through the DSICs until April 1, 2015.

UGI-PNG provides natural gas service to about 160,800 customers in 13 counties in northeastern Pennsylvania, while UGI-CPG serves about 76,500 customers in 33 counties across the state.

Last July, the PUC unanimously approved plans by a third subsidiary, UGI Utilities' Gas Division, to replace its cast iron mains within 14 years and its bare steel mains within 30 years (see Daily GPIJuly 10). At the time, UGI said it expects to pay $51.2 million each year of the LTIIP from 2014 through 2018 to cover cast iron and bare steel main replacement and service line replacements.

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