Three Utilities With Retail Choice To Merge

UGI has sought approval at the Pennsylvania PUC to consolidate its three natural gas utilities (UGI Utilities - Gas Division, UGI Central Penn Gas, and UGI Penn Natural Gas) into a single utility

Under the application, UGI would retain three distinct rate zones and tariffs, reflecting each of the legacy operating companies, after the consolidation. Under the application, there would be no impact to rates or tariff provisions governing natural gas choice (including the presence or absence of POR, as applicable, at the legacy companies)

However, UGI in its application indicates it may potentially seek consolidation of the initially established distinct rate zones in the future.

Under the application, the following rate zones would be established from the existing tariffs:

• Penn Natural Gas Would become UGI North

• Central Penn Gas Would become UGI Central

• UGI Utilities - Gas Division would become UGI South

Under the application, UGI Utilities will continue to provide natural gas distribution service and supplier coordination services to existing and new customers and natural gas suppliers within the former service territories of UGI Gas, PNG, and CPG through the application of the then-existing tariffs, which UGI Utilities shall adopt and apply within the corresponding rate districts.

Following the closing of the merger, UGI Utilities will, "pending the Commission’s approval of further consolidation in future proceedings," maintain and, as appropriate, separately file the following for the UGI South, UGI North, and UGI Central service and rate districts, such as:

• Purchased gas cost portfolios and rates

• Lost and Unaccounted For studies and reports

• Purchase of Receivable Program (UGI South)

• Choice program rules and requirements

• State Tax Adjustment Surcharge rates

"The Proposed Transaction will not result in anti-competitive or discriminatory conduct in the retail market for natural gas in Pennsylvania, nor will it have any adverse effect on the retail natural gas market in Pennsylvania As discussed above, all rates, terms and conditions that have an impact on retail competition in the service territories will remain unchanged in the initial tariffs through the implementation of the separate service and rate districts," UGI said

In its application, UGI said that the proposed merger is the "first step" to eliminate the need for multiple filings and reports to the Commission as part of various efficiencies to be realized by the merger