Suburbs face 25% hike for gas heat

By Linda Loyd INQUIRER STAFF WRITER Facing a $128 million shortfall because of escalating natural-gas costs, Peco Energy Co. said yesterday that it would raise gas rates for its customers in the Philadelphia suburbs, boosting the average yearly home heating bill by $264.50.

Peco said the increase, the second it has filed with the Pennsylvania Public Utility Commission since Dec. 1, will take effect tomorrow for 425,000 customers in Bucks, Chester, Delaware and Montgomery Counties. The average monthly home heating bill will go up $46, or 25 percent, to $228 during the winter months, November through February.

The increase "will boost the bill pretty substantially," Peco spokesman Michael Wood said. "The only nice thing is we're getting near the end of the heating season." The rate increase does not affect Peco's electric customers.

Peco passed on a comparable natural-gas rate hike to customers on Dec. 1, but that increase "was insufficient to make up the rising costs of gas," Wood said. Gas went up 22 cents per 100 cubic feet on Dec. 1. The latest rate hike is 23 cents per 100 cubic feet, Wood said.

Irwin Popowsky, the state's consumer advocate on utility issues, said the increase "unfortunately is consistent with what's been going on across Pennsylvania and the country."

Wood said Peco's rate increase would cost its customers less than the rate increase recently approved for Philadelphia Gas Works' customers. "Our increase is 29 cents [per 100 cubic feet] less . . . than PGW's," Wood said.

The rate increase will be in effect through November. Next Dec. 1, the rate will be set after an audit and review by the PUC.

"We're hopeful this rate will stay in effect or will decline," Wood said. "Nationwide, the situation for the natural-gas market is improving."

Reed Horting, Peco's vice president of gas supply and transportation, said wholesale prices across the nation rose sharply about a year ago because of a temporary imbalance between supply and demand.

Horting said wholesale prices have already begun to decline on the futures market, but summer prices appear to be about twice what Peco would have anticipated in past years. November and December 2000 were among the coldest on record, and, although the weather in January and February was more moderate, the heating season has been about 11 percent colder than a year ago, he said.

"A gasoline station can adjust its prices at the pump anytime it wishes. We cannot," Wood said. "We must file rate adjustments with the PUC on a quarterly or annual basis. This is a quarterly adjustment."

Wood said that if customers wished to switch to the budget billing plan, or needed help with payment arrangements, they should call Peco as soon as possible at 1-800-494-4000.

http://inq.philly.com/content/inquirer/2001/02/28/business/PECO28.htm?template=aprint.htm

-- Martin Thompson (mthom1927@aol.com), February 28, 2001