In The News

PGW Files Base Rate Request to Boost Safety and Conservation and Stabilize Bills for Customers

The rate request will address the energy burden of those vulnerable to poverty, further safety investments, and meet the City’s carbon reduction goals

(Philadelphia, Pa – February 27, 2025) – Philadelphia Gas Works (PGW) announced today that it has filed a base rate case with the Pennsylvania Public Utility Commission (PUC). PGW has not filed for a rate adjustment in two years. The current filing requests permission to increase rates by $105 million annually to build upon the company’s effectiveness in delivering safe, reliable, sustainable natural gas service; and introduces new, innovative programs to encourage energy efficiency and to support those vulnerable to poverty in a meaningful way.  

In PGW's last rate case in 2023, the PUC approved $468 million in revenue. For 2026, PGW is asking for $523 million in revenue; that $55 million difference compared to 2023 is to cover the rising costs of inflation, wage and health insurance increases and capital improvements over the last two years – which results in a $105 million base rate increase for customers.   

While the cost of delivering service to 500,000 customers has gone up in the near term; the low price of natural gas and PGW’s targeted energy conservation efforts have ushered in significant cost savings for PGW customers over the last ten years.

PGW is the largest municipally owned gas utility in the country serving the highest proportion of Pennsylvania customers whose incomes are below the federal poverty threshold, this current rate proposal seeks to continue supporting the conservation actions of its half a million customers and offering newer pathways to billing stability, enhanced services, and potentially fewer rate increases moving forward. Highlights of the rate filing proposal include:

• A new low-income health and safety program offering contractors $3,000 per project on the installation of health and safety measures within a home.
• New home energy assessments and energy efficiency measures at no cost to residential customers earning up to 250% of the Federal Poverty Level (FPL).
• A new low-income PGW Repair and Renew Program that provides free repairs of hazards on customers’ gas equipment.
• Better alignment of costs for suppliers.
• Completion of system-wide safety enhancements that impact every PGW customer’s home.

Unlike investor-owned utilities, PGW does not make a profit. The company has no shareholders and there is not a rate of return included in PGW’s rates. In preparation for its filing, the company conducted an affordability analysis to assess the extent to which energy bills may pose a challenge for some customers. Some of the conclusions drawn from the analysis by PGW are:

• The annual bill for a typical PGW heating customer has decreased $259, or 18.5% over the last 10 years. Adjusted for inflation, this represents a $662 or 36.7% decrease over the same time period.
• With the proposed rates, this still represents a 7.9% decrease from 2014 that is a 28.5% decrease when adjusted for inflation.
• The average bill-to-income (BTI) ratio for the average PGW customer has decreased from 2.08% to 1.10%, with it being 1.24% under proposed rates.

“PGW’s base rate request is intended to protect the safety and well-being of our customers, their wallets, and Philadelphia’s quality of life. PGW does not make a profit as a city-owned utility. Every dollar collected is directly allocated to ensure the safe and reliable delivery of low-cost energy service to our customers – throughout every ZIP code in Philadelphia,” said Seth Shapiro, PGW’s President & CEO. 

“The reality for customers today is that natural gas remains the most affordable energy option available on the market for Philadelphia’s residential families to heat their homes, do their laundry, and feed their families. We appreciate our customers’ trust in PGW to work responsibly on their behalf in our latest rate filing request.  We care deeply about protecting our customer’s interests.”

If the company’s entire request is approved, the bill for a residential customer using 61 thousand cubic feet (Mcf) of natural gas per year would increase from $92.60 to $104.61 per month, or by 13%.

The trends of PGW’s bill to income (BTI) have steadily decreased over time, with proposed rates still showing lower BTI ratios for both low-income and non-low-income customers (shown below).

PGW’s natural gas rates are made up of two main components: a delivery charge (or base rate) and a commodity charge (gas cost). The base rate reflects the cost of delivering natural gas to the customer’s residence, distribution system maintenance and customer billing costs. The gas cost is what PGW pays for natural gas and is passed on to the customer without markup.

PGW is ranked amongst the best in the industry in helping its customers lower the costs of their energy bills, according to JD Power *. And natural gas remains the most affordable way to heat a home compared to other sources like electric or home heating oil.

In recent years, PGW has launched several initiatives to do more with less, carefully control PGW’s expenses, and manage the costs of rate increases, including:

• PGW applied for and was awarded a total of $125 million Natural Gas Distribution Infrastructure Safety and Modernization grants from the U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA). The project will result in the replacement of 66 miles of cast iron main in historically disadvantaged Philadelphia neighborhoods, and the creation of 120 new skilled jobs, and reduce 412 metric tons of methane emissions.
• PGW launched the free MyPGW mobile app. Customers can now manage their My Account, monitor usage, and make payments through the app.
• PGW has led in reducing emissions for a cleaner, greener future. In 2024, PGW eliminated 7,581 metric tons of carbon dioxide equivalent emissions. 4.5 metric tons were saved by adding electric vehicles to our fleet through a Pennsylvania Department of Environmental Protection grant. And customers saved 3,480 metric tons through PGW’s energy-saving grants, rebates, and educational programs.
• PGW enhanced PGWorks.com to allow customers to access instant language translation in 50+ languages and select ADA options. These upgrades are available on desktop and mobile/smart devices.
• In 2023, PGW consolidated eight of its operational buildings into its North Operations Center, reducing PGW’s carbon emissions from those retiring facilities by 50%. Also, the consolidation will save PGW $100 million over 5 years.
• PGW established the online PGW Marketplace, where customers can receive significant EnergySense discounts on smart thermostats that regulate energy usage and help lower monthly energy bills.
• PGW has implemented a Hardship Fund Pilot program aimed at customers who are Asset Limited, Income Constrained, Employed (ALICE) at 151%-250% FPL. The Pilot program provides a one-time grant of up to $750 for customers who are recertified for CRP but were ineligible due to being above 150% of the FPL but less than 250% or who have a Protection from Abuse Order and are in this income group. This is aimed to provide support for the “benefits cliff” that many lower-income customers experience.
• PGW has continued offering a variety of energy efficiency and demand-side management programs to customers including:
  • EnergySense Kits (ESK) program that provides customers with a free energy efficiency kit.
  • Small Business Assessment (SBA) program which provides free walkthrough energy assessments that recommend energy efficiency upgrades, to encourage small businesses to take advantage of prescriptive rebate programs. 
  • A pilot program offering rebates for variable refrigerant flow (VF) natural gas heat pumps as part of the Commercial Equipment Rebates program. 
  • Additional funding to continue providing free smart thermostats to low-income customers as part of the Low-Income Smart Thermostat (LIST) program.

For questions, individuals and entities can contact the PUC at 1-800-692-7380 and leave their name and address to be notified of any public input hearings that may be scheduled related to this case.

*Source: 2024 Gas Utility Residential Customer Satisfaction Study

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Still Time for PGW Customers to Apply for Up to $1,000 to Pay Heating Costs

A Low-Income Home Energy Assistance Program (LIHEAP) grant could cover a PGW customer’s heating costs for an entire winter

PHILADELPHIA (February 19, 2025) – Philadelphia Gas Works (PGW) is reminding families, students, Philadelphia renters and homeowners that there is still time to apply for the Low-Income Home Energy Assistance Program- LIHEAP to receive up to $1,000 in free money for their PGW natural gas bills. If a customer’s service has been terminated, or is in danger of termination, they could receive up to an additional $1,000 via LIHEAP’s Crisis program.

 LIHEAP grants do not have to be repaid. The LIHEAP application period ends when funds run out or on Friday, April 4, 2025. Since the grant period opened in November, PGW has successfully processed more than 25,000 LIHEAP applications with more than $6 Million awarded to its customers to date.

Here are four easy ways to apply for LIHEAP.  

1. Text the word “CASH” to 77037 to receive an application.
2. Download a LIHEAP application at pgworks.com/liheap.
3. Visit a Neighborhood Energy Center to receive in-person guidance and payment assistance counseling. A list of Neighborhood Energy Centers can be found here.
    
4. Visit the Pennsylvania LIHEAP Assistance Office at 1163. S. Broad St. or online.

Applicants must have a household income at or below 150 percent of the Federal Poverty Level to meet LIHEAP eligibility requirements. Eligibility guidelines are listed below and available here.

“All of our customers deserve access to affordable, safe, and reliable natural gas service without compromising their basic needs.  Many Philadelphians are eligible for this money, that is free – don’t leave money on the table this winter,” said Denise Adamucci, Senior Vice President, Customer and Regulatory Affairs at PGW.  “We are committed to easing the financial energy burden on hardworking Philadelphians. Please share this valuable information with family, friends, and neighbors who may benefit from the LIHEAP grant as we experience the cold of winter,” added Adamucci.

Customers enrolled in PGW’s Customer Responsibility Program (CRP) can also apply for LIHEAP for even more assistance with heating bills.

Prefer to apply in person or learn more about your eligibility for LIHEAP? Customers can visit any Neighborhood Energy Center across Philadelphia for help with applying for LIHEAP or learning about other heating assistance programs.

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PGW Hosts Second Annual Energy Innovation Symposium

Expert panelists from across the Commonwealth and Tri-state region discussed the clean energy future . 

(PHILADELPHIA- January 17, 2025) Philadelphia Gas Works (PGW) hosted the second annual Energy Innovation Symposium at Temple University’s Howard Gittis Student Center on Wednesday, January 15. Leading energy experts discussed what is needed to achieve net zero emissions by 2050, how to equitably share the costs, and what success currently looks like.

“As the largest municipally owned gas utility in the country, Philadelphia Gas Works provides safe, reliable, affordable, and sustainable energy. As the City’s energy experts, we look to convene other energy experts and facilitators each year to discuss the state and future of the energy sector,” said Seth Shapiro, PGW President and Chief Executive Officer. “We believe strongly that new energy solutions require collaboration and partnerships, and our second annual Energy Symposium is vital as players in the energy space look at innovative solutions for the challenges the City of Philadelphia, region, state, and country are facing.”

The panelists on the three symposium panels discussed the impact of state and federal policies, opportunities, partnerships and collaboration in new energy solutions, finding equitable ways to share the cost burden, the need for local, state, and federal funding support, the importance of diverse new energy approaches, and emerging successes with new energy options.

Panel 1: The Roadmap to Net Zero: Opportunities and Realities

Achieving net zero emissions goals by 2050 will require transformational initiatives, monumental expenditures, and large-scale deployment of new technologies, some of which may not yet be commercially available.

The panel, comprised of Stephen DeFrank, Chairman, Pennsylvania Public Utility Commission; Aftab Khan, Executive Vice President, Operations and Planning and Security, PJM; and Sam Robinson, Deputy Chief of Staff, Office of Pennsylvania Governor Josh Shapiro, shared their perspective on the current state of infrastructure in the region. The conversation focused on the reliability of the electric grid, the impact of clean energy projects on the interconnection queue to the grid, and the current concerns from Governor Shapiro’s administration on the grid capacity auction prices that influence rising electricity costs.

Panel 2: Sharing Societal Costs: Who Bears the Burden?

All potential clean energy transition pathways will require trillions of dollars in new investments over the next few generations, from upgrading home heaters to installing new interstate transmission lines. In addition to understanding total costs, we must also collectively and carefully evaluate the best structures for funding these costs. The historical utility ratepayer-funded model may not suffice given the scale and complexity involved.

This panel, comprised of H Gil Peach, President, H. Gil Peach & Associates; Cara Goldenberg, Principal, Rocky Mountain Institute; Derek S. Green, Of Counsel, Obermayer, Rebmann Maxwell & Hippel LLP; and Jamie McClintock, Counsel to Commissioner Kathryn Zerfuss of the Pennsylvania Public Utility Commission, discussed the need for new utility ratepayer models, and the intricacy of balancing utility investment decisions, customer affordability, and sustainability during the energy transition.

Panel 3: What Does Success Look Like in 2025?

While current complexities and obstacles may seem insurmountable, success stories are emerging today, providing hope for solutions that may develop over time. This panel highlighted recent successes, specifically focusing on opportunities with the potential for significant societal emission reductions, including Utility Geothermal Networks, Renewable Natural Gas, Hybrid Electrification, and Carbon Capture.

The final panel was comprised of Tim Ashmore, Director of Geothermal Business Development, CDM Smith; Amy Cradic, Senior Vice President and COO of Non-Utility Business Strategy and External Affairs, New Jersey Resources; Frank King, Director of RNG Business Development, UGI Energy Services, LLC; Aaron Tasin, Vice President Business Development, Sales and Engineering, Northeast-Western Energy Systems USA LLC discussed their current projects. They outlined the importance of testing diverse new energy approaches like electrification, geothermal, and carbon capture, renewable natural gas and hybrid heating systems and investigating ways to leverage existing gas infrastructure to achieve decarbonization.

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