UGI Utilities Proposes Significant Natural Gas Rate Increase to Fund Infrastructure Improvements

UGI Utilities, Inc. has formally requested a $110.4 million annual increase in natural gas base rates from the Pennsylvania Public Utility Commission (PUC), a move aimed at financing extensive infrastructure improvements and ensuring the continued safety and reliability of natural gas services. This proposed adjustment could see residential heating customers' monthly bills rise by 10.8%, commercial customers by 8.6%, and industrial customers by 7.5%, depending on their usage levels.

The rate hike is part of a broader $786 million investment plan by UGI to upgrade its natural gas distribution system, including the replacement of outdated pipelines with modern materials to enhance system reliability and safety. Notably, the increase would apply solely to the delivery charge component of customer bills, which funds the utility's operational, maintenance, and emergency response services.

While UGI has proposed an effective date of March 28, 2025, for the new rates, the PUC's standard review process, involving investigations and public hearings, is expected to extend the timeline, potentially delaying implementation until October 2025. This proposal underscores UGI's dedication to modernizing its infrastructure across its 46-county service area in Pennsylvania, serving over 700,000 customers.

The impact of the rate adjustment will vary for customers who source their natural gas from alternate suppliers, with the final rates subject to PUC approval. This development highlights the balancing act between necessary infrastructure investments and their financial implications for consumers, a critical consideration for business and technology leaders monitoring energy sector trends.