The state Public Utility Commission on Wednesday approved a long-term infrastructure improvement plan proposed by part of UGI Utilities.
But the plan from UGI’s Gas Division, which serves most UGI customers in Lancaster County, will not trigger a base rate hike anytime soon.
PUC Chairman Robert F. Powelson said the plan was deemed adequate largely because it will accelerate the replacement of aging infrastructure.
A speedier pace is a requirement of such long-term plans under Act 11, which Gov. Tom Corbett signed in February 2012.
The PUC commissioners voted 5-0 to approve the plan.
Under the new program, UGI’s Gas Division will spend $51.2 million annually for five years to replace cast-iron and bare-steel mains.
The division’s previous annual investment in main replacements was not immediately available.
But with the greater spending, the division now expects to replace all of its cast-iron mains by 2027 and all of its bare-steel mains by 2041.
Before this plan was approved, the division was expecting to complete the replacement project in 2051, said UGI spokesman Joe Swope.
UGI’s Gas Division also will replace service lines as it replaces the mains they connect to.
In addition, the division will install excess flow valves, replace and relocate meters, and replace risers, meter bars, regulator stations and service regulators.
The cost of this work can be recovered by instituting a distribution system improvement charge.
But under the law, a DSIC can be sought only if a utility has had a base rate increase in the past five years.
The Gas Division has not had a base rate increase since 1995.
So for the division to get a DSIC, it would first need to obtain approval for a base rate increase.
“At this point, there’s no timetable for a base rate increase,” said Swope.
The division has had rate increases lately, but those were rooted in its purchased-gas cost - the price it pays to obtain gas on the wholesale market.
Under state law, gas utilities are allowed to pass this cost through to customers entirely, but without markup.
UGI’s residential rates rose 4.0 percent June 1 because of a spike in demand last winter that pushed up those wholesale prices.
The typical residential heating customer using 8,500 cubic feet of gas a month saw his bill grow by $3.47, to $89.85 from $86.38.
UGI has about 67,000 customers in Lancaster County.
In total, the Reading-based division serves 391,000 customers in 15 southeastern Pennsylvania counties.
First Published: July 11, 2014, 2:49 p.m.