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Rate Case Settlement To Require Reporting On Purchase of Receivables Program, In Light Of "Affordability" Concerns
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A settlement in the natural gas rate case of UGI Utilities, Inc. – Gas Division filed at the Pennsylvania PUC would require reporting concerning the purchase of receivables program in light of "affordability" concerns raised by consumer parties in the case, while also requiring that a collaborative consider developing targeted customer communications to warn customers about "high" retail supplier charges on customers' bills
Settling parties include UGI, the PUC's Bureau of Investigation and Enforcement, the Pennsylvania Office of Consumer Advocate, the Pennsylvania Office of Small Business Advocate, and the Retail Energy Supply Association. The Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania does not oppose the settlement
During the natural gas rate case, the Coalition for Affordable Utility Services and
Energy Efficiency in Pennsylvania had proposed that UGI's purchase of receivables program be limited to products with a rate at or below the default service rate
Rather than adopting such proposal, the settlement includes the following provision:
"Purchase of Receivables. Within 90 days of the approval of the Settlement in this
proceeding, UGI Gas will hold a workshop with interested parties, including the parties to this
proceeding, to develop annual Choice Program reporting components to provide parties with a
better understanding of the function of the Choice program on affordability.
OCA says that this settlement provision requires UGI, "to look at the POR
program and to provide better data to the participating parties to determine if the POR program
can be modified in future base rate cases to better address how the Choice program affects the
affordability of UGI’s bills, especially during a time when UGI’s customers are facing significant
affordability pressures."
Additionally, the settlement would require that a collaborative be instituted to, "discuss the development of
targeted customer communications regarding natural gas shopping[.]"
Among other things, UGI under the collaborative, "will propose additional
and/or more targeted customer communications to assist customers in ensuring affordability for
basic natural gas service due to high natural gas supplier ('NGS') charges that appear on the
customer bill that UGI Gas collects under threat of termination of service."
OCA had during the rate case proposed that UGI shall cease the use of language in choice informational materials that currently states that, "customers may save money by shopping for a supplier".
OCA had also during the proceeding sought to modify UGI's choice education materials to, among other things, "explain that the risk of higher prices [from retail suppliers] is documented".
OCA during the proceeding had presented testimony stating that, from January 2025 through
December 2025, residential transportation (RT) customers paid $17 million more to their retail supplier, compared to the cost under the price to compare.
OCA had also presented testimony stating that 76.7% of such shopping customers paid more than the PTC
Other settlement terms would provide that, in various touchpoints that UGI has with customers (such as service initiation, etc.), UGI would inquire as to whether customers wish to hear information regarding customer
programs that provide reduced rates for income eligible households
Through UGI's standard screening process, customers identified as eligible low-income customers would be offered an opportunity to enroll in UGI's customer assistance program (CAP). At UGI, CAP customers may not shop for a retail supplier, and shopping customers would need to return to default service to enroll in CAP
The settlement also includes various terms addressing issues raised by retail suppliers in the proceeding
Among other things, the settlement provides that UGI Gas will conduct a study to evaluate the feasibility
of, and cost associated with, offering daily imbalance trading, with a report due on or before March 1, 2027
UGI, will, as part of UGI's 2027 purchased gas cost (PGC) proceeding, address such daily imbalance trading study, including a discussion of any cost recovery associated with the implementation of IT upgrades
necessary to facilitate daily imbalance trading.
The settlement would, effective with the new delivery rates to be established under the settlement, reduce the charge under Rate NNS (no notice service) from the current $0.22 per Mcf to instead be $0.20 per Mcf
In a statement in support of the settlement, RESA said that such reduction, "will make a difference to customers purchasing that service and ...
will reduce the subsidy that those customers provide to the PGC which makes the market more
favorable to default service if customers are making that comparison".
In a statement in support of the settlement, RESA further said of NNS, "With UGI’s
draconian penalties, it is less expensive to pay for what is essentially insurance [under NNS], than to pay massive
penalties that can be incurred with just one delivery mismatch. UGI’s witness ... testified
that the cost of the service for NNS, using UGI’s methodology, is $0.17. One reason that the rate
was maintained above-cost was that the advocates were pleased to allow larger customers to be
charged more, because the excess funds are used to subsidize utility default supply for residential
and small commercial customers. As part of the Settlement, UGI and the parties have agreed to
reduce the NNS rate by 2 cents to $ 0.20 per mcf -- a step in the right direction."
The settlement states that UGI will revise its tariff to provide "clarity" regarding the
process and documentation required for acceptance of force majeure declarations by retail suppliers.
RESA said that, under this settlement term, UGI will implement a tariff provision, "setting out specific requirements for
invocation of the protections available for FM [force majeure] events."
RESA said, "Heretofore, there has been no specific
standard, which can leave suppliers and UGI in a no-man’s land when FM events occur."
RESA said, "The proposed FM tariff will provide specific notification requirements, the need to present
documentation to verify that an FM event did occur and did impact the party, and also a
demonstration that the impacted party took all reasonable steps to mitigate the harm. Assuming
the claiming party can substantiate that it faced an impossible situation that did not allow it to
mitigate the problem, that party can be excused from penalties and other fees. This is how FM
provisions are supposed to work and will work on the UGI system after the new tariff provision is
approved."
Docket R-2025-3059523
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Would Require Collaborative To Consider Development Of Targeted Customer Communications Which Would Warn Of "High" Retail Supplier Charges
OCA Says Residential Shopping Customers Paid $17 Million More Than Default Service During 2025
July 8, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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