The weather was warm last month. So why did many Philly gas customers get hit with ‘outrageous’ heating bills?

The Philadelphia Gas Works bill that arrived this month took Elise Ridley’s breath away. PGW said she owed $235.82 for gas service for the previous month at her Point Breeze studio apartment, three times more than she had ever been billed before, even during the coldest winter months. A year ago, the same bill for her apartment was about $27.

“I immediately thought, ‘Oh, my goodness, I did something wrong,’” said Ridley, an implementation manager for a software company. She worried that something went awry with her PGW account when she changed addresses at the beginning of June.

But it wasn’t just Ridley. In South Philadelphia, Michael R. Sullivan was stunned this month by a PGW bill for $155.38. It was greater than his bill in January, the coldest month of the winter, when he used nearly five times more natural gas at his two-story rowhouse on South Rosewood Street.

Courtney DeMuth, who lives in the Wissahickon neighborhood, got hit with a $233.39 bill this month, more than quadruple the previous month’s bill. “It’s beyond unaffordable and frankly terrifying, given that I’m living paycheck-to-paycheck,” she said.

Across Philadelphia, many PGW customers are reporting staggering gas bills at a time of the year when heating costs typically go into a long summer snooze. Many fear that the soaring cost of energy, which has impacted everything from gasoline to heating oil, is to blame.

But it’s not the rising cost of natural gas that has inflated some PGW bills. Nor was there a cold snap in May that caused a big surge in gas usage.

In fact, it was the opposite — the weather in May was abnormally warm.

The culprit is a single bill charge called the “weather normalization adjustment” (WNA), which allows PGW to adjust its bills up or down between October and May when the actual weather departs significantly from normal weather patterns. PGW says the warm weather in May was responsible for the charge, which allows the utility to make up for the money it otherwise would have lost.

It is telling customers who complain that they have no recourse other than to apply for a payment plan.

“What in the world is going on?” asked Nicole Boose, who helps manage her mother’s finances from out of town. She was alarmed when she saw a $238 PGW bill for her mother’s house in the Mayfair section of Northeast Philadelphia, which included a $171 weather normalization adjustment. The month before, the total bill was less than $60.

“This seems totally outrageous,” said Jeannine Baldomero who got a $130 bill this month for her Spring Garden apartment, including a $93 weather normalization charge. She said the WNA alone was bigger than any previous bill she had received. “In all the years I’ve been a PGW customer, I have never seen anything like this.”

In a typical month, the WNA attracts little attention. It accounts for a few cents or dollars on a bill, either a charge or a credit, depending upon PGW’s calculation of each customer’s expected heating usage and how much the weather deviated from normal.

But something seems off with the latest round of PGW bills. Many customers — it’s unclear how many — were billed gargantuan weather normalization charges that far exceed what they might expect to pay had the weather been “normal.” Ridley’s bill included a $200 weather charge, or 85% of her total $235 bill. Her studio apartment is 450 square feet.

Miriam Lipschutz’s $160 bill for her East Passyunk home included a $113 weather charge.

“The fact that they are doing this now, when everyone is feeling the weight of inflation, and a quarter of Philadelphians live below the poverty line, it’s downright criminal,” Lipschutz said.

Emma Stenger, a Roxborough resident, said she puzzled over her $116 bill for half an hour, trying to comprehend how her modest usage could account for such a big amount. Then she came across a $60.50 weather normalization charge on the third page of the bill.

“‘No, that’s not right,’” she said to herself. She reviewed her bills for the last three years and found nothing remotely similar.

Robert Ballenger, a Community Legal Services lawyer and consumer advocate for PGW, at first thought the charge might be related to a big boost in PGW’s “supply charge” that went into effect on June 1, reflecting the rising cost of fuel. Then he was shown several residential bills with runaway WNAs.

“That’s crazy,” he said. “I have no idea what’s going on.”

PGW does not acknowledge that there is a problem with its current calculation of the weather normalization charge, and sticks to a response that the WNA was approved by state regulators.

“We certainly understand the impact this charge may have on our customers, so we are continuing to monitor the issue and investigating what options we may have if we encounter these similar circumstances again in the future,” Richard G. Barnes, a PGW spokesman, said in an e-mail response to questions. “Again, we encourage customers to contact us for a payment arrangement if they need assistance.”

Only after PGW customers posted a crescendo of complaints on social media during the last week did PGW post a notice Wednesday on its website acknowledging some “higher-than-usual” WNA charges. But the utility does not admit that any charges are incorrect, and it makes no mention about disputing the charge, which customers may do.

Customers should first reach out to the utility if they have a problem with their bill. But if they are unsatisfied with the response, they can file a complaint with the Pennsylvania Public Utility Commission, which regulates PGW, said Nils Hagen-Frederiksen, the commission’s spokesman.

The PUC has permitted PGW to include a weather normalization charge on its bills since 2002. Only one other utility in the state, Columbia Gas of Pennsylvania, which is based outside Pittsburgh, has gotten PUC approval for a similar charge.

The WNA is an important financial tool for a nonprofit municipal utility such as PGW. It stabilizes the utility’s cash flow and assures lenders that PGW can still pay its bills even when the weather is unusually warm or cold.

The weather normalization charge can also protect consumers because the utility credits bills during very cold months when gas usage is greater than expected. During the very cold winter of 2014-2015, PGW credited customers with $12.3 million. But the following winter of 2015-16, which was very warm, the WNA generated $41.5 million in additional revenue, or 7.2% of total PGW revenue.

The weather normalization adjustment applies to the bills of about half of PGW’s 509,000 customers, including those on budget plans. It doesn’t apply to non-heating customers, because the use of gas stoves, water heaters or driers should not be impacted by weather. Nor does the WNA apply to households enrolled in the customer assistance program for low-income families.

But not all PGW customers eligible for the weather normalization adjustment seem to have received ultra-high bills.

Of about a dozen customer bills examined by The Inquirer, the high charges seem to apply only to customers with billing dates of June 11 or later. For those customers, their billing cycles covered the last 20 days of May when the weather was unusually warm, according to a tally of daily National Weather Service data.

Still, even if the weather were normal last month, a typical household’s heating load would not be great because May is typically mild, some customers reckon.

“Winter was probably warmer than normal this year, but it wasn’t ridiculously warm,” said Chris Garrity, a Roxborough insurance broker, who got a $108 bill this month that included a $64 weather normalization charge. His household’s gas usage this year was slightly greater than it was a year ago for the same period. But last year’s bill for about $34 included a weather normalization credit of 16 cents.

Some commenters on social media erroneously suggest that PGW customers can avoid the WNA by switching to a competitive energy supplier. But the weather adjustment is based upon PGW’s distribution charge, not its energy charge. The WNA applies to all customers regardless of who supplies their gas. Jameelah Bent, an Overbrook customer served by a competitive supplier, said her $178 bill included a $147 weather charge.

“It would be nice to know how it is calculated,” said Bent. “My friends in Wynnefield Heights were charged only $40.”

PGW’s lack of advanced warning about the charge did not help matters. And many customers who spoke with a PGW customer service representative said they received conflicting and confusing information.

“I was told that there are no limits on how much PGW can charge for WNA and no limit on how often they can do it, so I’m wondering if this will keep happening month after month,” Sullivan said. “Customer service told me that anything is possible.”

When Ridley called PGW, the customer service representative assured her that the bill was accurate and did not contain any incorrect charges related to her change of address. “She basically told me there’s not really much I can do,” she said. “She said I didn’t have a choice but to pay it. Everyone has to pay it.”

Baldomero said the customer service representative recited from a script. “The woman said, ‘I don’t even understand that. So I’m just going to read it directly to you.’ And then, of course, I didn’t understand it, either.” Baldomero filed a dispute with the utility over the charge.

Baldomero said she would have felt better if PGW had assured her that they would look into what seemed to be a gross error. “There was something about the way they answered me that made me feel like they’re up to something, that this doesn’t feel right,” she said. She also filed an informal complaint with the PUC.

City Councilmember Derek S. Green, who chairs the city’s gas commission, said he learned about the complaints only late Wednesday from another councilmember. He has been involved with oversight of PGW for many years, and said the weather normalization adjustment is rarely a matter of controversy.

“We are deeply concerned about this issue, especially in a time when costs are going up for everybody,” he said. “So definitely this is troubling.”

Green said he suspects there may be a glitch with the formula that PGW uses to calculate the weather normalization adjustment, which he noted had been approved in 2017 by state regulators.

The complicated formula is buried deep in PGW’s 157-page tariff, the formal document that details how gas rates are assessed. The WNA is calculated for each customer and changes with each billing cycle, depending upon PGW’s calculation of each customer’s expected heating usage and how much the weather deviated from normal.

It’s almost impossible for a customer to cross-check the numbers, because PGW does not disclose its calculations for a customer’s “base load,” which is the gas used for non-heating appliances, such as a stove or a water heater. The company did not respond to a question about how it determines “base load” estimates.

The WNA kicks in only when the temperature deviates from a 20-year historical average during any customer’s billing cycle. “Normal” is determined by adding up “heating degree days,” which measure the average daily temperature below 65 degrees. Heating degree days quantify how much heat is needed to keep a house at 65 degrees — the bigger the number, the more heat required.

PGW’s 20-year historic average is 4,320 heating degree days, according to the National Weather Service. Philadelphia is on pace this year to hit 3,853 heating degree days, 11% warmer than normal. That would be tied for third warmest winter in the last decade.

May’s weather was particularly curious because it was cool early in the month, when customers would have required heat. But there were zero heating degree days recorded in Philadelphia after May 11, as summer arrived early and residential furnaces took a break. Unbeknownst to many customers, the PGW weather normalization formula apparently boosted their bills as though winter had not ended.