The Public Utility Commission Thursday approved the long-term infrastructure improvement plans and plans to implement distribution system improvement charges (DSIC) for UGI Penn Natural Gas Inc. and UGI Central Penn Gas Inc.

The Commission voted 5-0 to approve the companies’ LTIIPs and DSICs, which were filed in compliance with Act 11 of 2012.

The UGI-PNG LTIIP is a five-year plan that allows UGI-PNG to replace an average of 17 miles of pipeline per year.  Further, UGI-PNG plans to spend nearly $23 million per year on pipeline replacements, service line improvements, and safety device installations, over the five-year period of the plan.

The company’s DSIC mechanism may be implemented once the company files a tariff. However, some issues related to the DSIC were referred back the PUC’s Office of Administrative Law Judge (OALJ) for further hearings. As a result of the commitments made in a 2012 Settlement Agreement regarding a 2011 fatal natural gas explosion in Allentown, Pa., UGI-PNG cannot recover money through the DSIC until April 1, 2015.

UGI-PNG provides service to approximately 160,800 customers in 13 counties in northeastern Pennsylvania.

The LTIIP will allow UGI-CPG to replace an average of over 17 miles of pipeline per year during the five-year period of the LTIIP.  Further, UGI-CPG plans to spend nearly $14 million per year on pipeline replacements, service line improvements, and safety device installations, over the five-year period of the plan.

The company’s DSIC mechanism may be implemented once the company files a tariff. However, some issues related to the DSIC were referred back the OALJ for further hearings. As a result of the commitments made in a 2012 Settlement Agreement regarding a 2011 fatal natural gas explosion in Allentown, Pa., UGI-PNG cannot recover money through the DSIC until April 1, 2015.

UGI-CPG provides natural gas service to approximately 76,500 customers in 33 counties across Pennsylvania.

Act 11 requires among other things that utilities file LTIIPs as part of any action to establish a DSIC to recover reasonable and prudent costs incurred to repair, improve or replace certain eligible distribution property that is part of a utility’s distribution system.

As of Jan. 1, 2013, public utilities could petition the Commission for approval to establish a DSIC.

The petition must contain the following elements: 1) an initial tariff; 2) testimony and exhibits to demonstrate that the DSIC will ensure the provision of adequate, efficient, safe, reliable and reasonable service; 3) a long-term infrastructure plan; 4) certification that a base rate case has been filed within the past five years; and 5) any other information required by the Commission.  The petition must demonstrate that granting the petition and allowing the DSIC to be charged will accelerate the replacement of infrastructure.

On Feb. 14, 2012, Gov. Corbett signed Act 11 of 2012, which allows jurisdictional water and wastewater utilities, natural gas distribution companies, city natural gas distribution operations, and electric distribution companies to petition the Commission for approval to implement a DSIC.

Under the law, the DSIC must be designed to provide for "the timely recovery of the reasonable and prudent costs incurred to repair, improve or replace eligible property in order to ensure and maintain adequate, efficient, safe, reliable and reasonable service.”

For more information, visit the PUC’s Act 11 DSIC Program webpage.

9/15/2014