Pennsylvania approves UGI gas rate hike: +$6.45 a month

Pennsylvania regulators on October 1 approved a $65 million base-rate increase for UGI’s gas division, about a third less than the company requested. The typical residential bill will rise by $6.45 a month (5.7%) in two steps, the first of which took effect the same day.

Key takeaways

The Pennsylvania Public Utility Commission (PUC) voted 3-1 for a settlement that gives UGI $65 million (5.3%) in new annual revenue, down from the $99.4 million (8.05%) it sought.
The average home bill goes from $113.76 to $117.69 a month now, and to $120.21 on October 1, 2027.
Most of the first-year increase comes from a higher fixed monthly customer charge, which rises from $16.25 to $19 now and to $20 next year.

What happened

UGI Utilities’ gas division serves about 706,000 homes and businesses across 46 Pennsylvania counties. It asked the PUC for a $99.368 million increase in base rates, the part of the bill that pays for pipes, meters, maintenance and the utility’s return on investment. That request would have raised the average residential bill by $9.91 a month, or 8.7%.

Instead, the commission approved a negotiated settlement worth $65 million, phased in as $40 million on October 1, 2026 and $25 million on October 1, 2027. The deal was reached by UGI, the PUC’s Bureau of Investigation and Enforcement, the state Office of Consumer Advocate, the Office of Small Business Advocate and a retail energy suppliers’ group, and two administrative law judges recommended approving it. The case is docket R-2025-3059523.

The settlement also includes several consumer provisions:

Rate stay-out: UGI cannot file for another base-rate increase before January 15, 2029.
Help for low-income customers: automatic enrollment and recertification in UGI’s Customer Assistance Program for customers eligible for federal LIHEAP heating aid, an extra $250,000 for the Operation Share hardship fund, and, from April 1, 2027, a 24-month payment plan covering 50% of current arrears.
Weather normalization pilot: starting November 1, 2027, a pilot adjustment will apply when weather differs from normal by more than a 5% “deadband.” Customers in the assistance program are excluded.

What it means for your bill

The PUC’s figures are for an “average” residential customer. Here is the math, using those numbers:

Phase 1 (now): $117.69 − $113.76 = $3.93 more per month, about 3.5%. Over 12 months that is $3.93 × 12 = $47.16 a year.
Phase 2 (October 2027): $120.21 − $117.69 = $2.52 more per month, about 2.1%.
Full effect: $6.45 × 12 = $77.40 a year more than before the case, compared with $9.91 × 12 = $118.92 under UGI’s original proposal. The settlement saves the average household about $41.50 a year versus the request.

Look closely at the fixed charge. It rises $2.75 a month now ($19 − $16.25), which is $2.75 ÷ $3.93, or roughly 70% of the first-year increase. By 2027 the fixed charge will be $3.75 higher in total, more than half of the full $6.45. That matters because a fixed charge is paid every month whether you use a lot of gas or almost none, so turning down the thermostat cannot offset it.

Two caveats. First, your actual change depends on how much gas you use: a large, older house heated with gas will see a bigger dollar increase in January than in July. Second, this decision covers delivery (base) rates only. The cost of the gas itself is passed through separately and adjusted periodically, so your total bill this winter will also depend on wholesale gas prices.

What you can do

Check the supply side. Pennsylvania lets customers buy their gas from competing suppliers. The PUC’s PAGasSwitch.com site lists offers next to UGI’s own “price to compare.” Read the contract terms, especially variable rates and early-termination fees, before switching.
Ask about assistance early. If money is tight, ask UGI about its Customer Assistance Program and the Operation Share fund, and apply for LIHEAP when the season opens. Getting into a payment plan before arrears build up gives you more options.
Cut the part you control. The fixed charge cannot be avoided, but the usage-based portion can. Sealing drafts and setting back the thermostat at night are low-cost steps; see our guide to saving on heating this winter and our weatherstripping guide.
Consider budget billing. Spreading winter costs evenly over the year will not lower your total, but it can make January bills easier to plan for.

Sources

Written by The Daily Economy editorial team with AI assistance and checked against the sources above. Read our editorial policy.

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