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Peoples Gas wants to raise rates by 14 to 19 percent to pump $95M into replacing pipelines | TribLIVE.com
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Peoples Gas wants to raise rates by 14 to 19 percent to pump $95M into replacing pipelines

Natasha Lindstrom
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Stephanie Strasburg | Tribune-Review
Peoples Natural Gas Co. fitter/operator Mark Palmire II, 26, of Bloomfield, installs a plastic gas line in Squirrel Hill in 2014. People’s Natural Gas Co. has been working aggressively in recent years to replace their old cast iron and bare steel gas lines, digging up Pittsburgh streets and sidewalks to replace the older metal pipes with plastic ones before they can rupture and cause leaks.

Peoples Natural Gas is seeking permission from state regulators to increase rates for its customers by 14 to 19 percent so the utility can pump $95 million into replacing aging pipelines, officials said Monday.

Typical residential customers would see an increase of about $10 per month, or 14 percent, under the base rate request submitted Monday to the Pennsylvania Public Utility Commission, the oversight body charged with investigating and approving the proposal. Former Equitable Gas customers now serviced by Peoples would see an average increase of about $14 per month, or 19 percent more.

The proposed unified rate would bring the typical residential monthly bill for both sets of customers up to about $85.

If approved, the increase would mark the first rate hike by Peoples Gas in six years.

“We have avoided increases up to now by focusing on achieving efficiencies in the multiple systems that we operate,” Peoples President & CEO Morgan O’Brien said in a statement. “This request will help Peoples invest in modernizing our pipeline infrastructure and continuing our greenhouse gas reduction.”

Peoples told state regulators it would spend an estimated $94.9 million in additional revenue from the increase toward advancing its single largest infrastructure initiative in company history. The increase also would help the company cover business costs such as benefits, taxes and debt service and ensure ratepayers “a reasonable return on investment,” the company said.

Peoples became the largest natural gas utility in Pennsylvania when it acquired competitor Equitable Gas Co. from EQT Corp. in 2013.

Since the acquisition, the company has spent more than $600 million on replacing more than 400 miles of aging pipeline — including 146 miles of pipe last year alone, O’Brien said. Workers are swapping old, bare steel and cast-iron pipe with plastic piping that does not corrode and can better withstand freezing temperatures.

Peoples Gas now serves more than 740,000 homes and businesses in Western Pennsylvania, West Virginia and Kentucky.

The earliest the proposed rate increase could take effect is March 29. The PUC’s approval process, however, could take up to nine months, which means ratepayers likely will not see changes on their bills until “sometime in autumn 2019,” Peoples officials said.

The PUC could deny the request or propose an alternative, lesser rate.

RELATED: State cuts Columbia Gas rate hike in half, company to refund $23.8 million to customers

In December, the PUC reached a settlement with Columbia Gas to implement a 4.52 percent or $26 million revenue increase — substantially less than the 8.16 percent ($46.9 million) increase requested last March by Columbia, which has 426,000 customers across 26 counties. Typical Columbia residential customers will see monthly rates increase by about $4.11, up to $95.74.

Peoples said that customers on fixed or limited incomes with concerns about how an increase might affect their bills can call 800-400-9276 (1-800-WARM) or go to peoples-gas.com/help .

Customers can reach the PUC at 1-800-692-7380 or send a letter or request for a complaint form to Pennsylvania Public Utility Commission, P.O. Box 3265, Harrisburg, PA 17105. Formal complaints regarding the Peoples’ proposed rate increase must be received by April 29.

RELATED: Peoples Gas to be bought for $4.3 billion by Philly-area Aqua America

Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, [email protected] or via Twitter @NewsNatasha.