PUC DENIES PHILADELPHIA GAS WORKS SURCHARGE REQUEST
HARRISBURG, July 8, 2004 – The state Public Utility Commission (PUC) decided today not to allow the Philadelphia Gas Works (PGW) to place a surcharge on the bills of paying customers to make up for money lost on unpaid bills.
In a unanimous ruling, the five-member PUC refused the gas company’s request for a Cash Receipts Reconciliation Clause, which would have increased the monthly bill of every gas customer in the city. State Senator Vincent Fumo (D-Philadelphia) and a group of elected officials had pledged several months ago to fight the surcharge. They filed a brief in the case, arguing against the request.
Submitting the brief along with Fumo were Democratic state senators Michael Stack and Anthony Williams of Philadelphia, District Attorney Lynne Abraham, City Council President Anna C. Verna, and Council members Jim Kenney, Frank DiCicco, Michael Nutter, David Cohen, Joan Krajewski, and Juan Ramos.
They presented a strong case to the PUC, showing that PGW’s financial condition did not warrant such a surcharge, and that the company had not followed proper legal procedures in requesting the surcharge.
"The PUC’s decision is good news for Philadelphians. I want to personally thank the hundreds of residents who joined me in testifying against PGW’s outrageous request," Stack said. "This decision gives PGW the opportunity to pursue improvements to its collections system and get its financial house in order."
PUC chairman Terrance Fitzpatrick said in a written statement that the surcharge was unnecessary because PGW’s collection on its bad debt had improved recently, and that it would be bad public policy to allow the company to pass its debt on to customers because it would remove PGW’s incentive to better its collections.
Intervening in the case, Fumo and the other officials pointed out that PGW had one of the worst collections rates of any utility in the state. They urged the company to take steps to address its own internal problems before asking its customers to absorb more costs.
The PGW requests dates back to March of this year, when it told the PUC it needed additional money to compensate for some customers who were chronic deadbeats.
"We believed all along that there was a better way for management to approach this problem," Fumo said. "Although the company has now improved its collection rate, it still needs to address its long-term financial situation, and do a thorough evaluation of its own management practices."