Have You Opened Your PGW Bill This Month?

Did you have to sit down after opening your PGW bill? It may be hard to believe, but this has been one of the warmest winters on record, and yet so many people are getting very high bills.

It’s unclear if PGW could have done anything or if there is anything PGW can do now to help PGW consumers with the rest of the winter’s bills. Here is what is going on:

A PGW bill has several parts. The major components are the cost of natural gas and the cost of getting the gas to our homes and reading the meters. The “fixed costs,” the costs of operating the system (base rates), except for a “weatherization charge, which is supposed to help equalize bills, are set.

The Pennsylvania Public Utility Commission (PUC) sets those rates after PGW files a request for a change in its “base rates.” The last base rate increase was approved in 2020 and raised rates in Jan 2021 by 1.5%, July 2021 by 1.5%, and January 2022 by 2.2%. Since then, there have been no base rate increases.

The cost of natural gas is driving the higher rates, even though January has been much warmer than usual. As PGW’s web page says: “The Gas Cost Recovery rate can change monthly and is the largest portion of a typical heating bill. The GCR factor is evaluated quarterly to reflect the cost we expect to pay our suppliers. Once actual gas supply costs are booked, any cost adjustments over or under are factored into the GCR factor – resulting in no profit to PGW. By law, the GCR factor is passed on to customers without any profit or markup. Customers pay what we pay for natural gas. The Pennsylvania Public Utility Commission reviews and approves the price we charge for gas.”

What PGW pays for natural gas sets our rates. If it does a good job, our bills are lower. If the new executives of PGW do a better job, the rates will be lower. On the spot market, natural gas prices have both spiked and crashed. During the early fall, natural gas prices were $ 9.00 per 1000 cubic feet; two weeks ago, the price was $ 3.64.

Did PGW do a good job of buying gas for us this year? Is there anything they can do now to lower prices for the rest of the winter?

Turn on Hall Monitor this Wednesday at 6 pm to hear the rest of the story.

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