Pa. Consumer Advocate says it will investigate excessive PGW weather charges

The Pennsylvania Attorney General’s Office of Consumer Advocate announced Wednesday that it is investigating the “unusually large” weather normalization charges as high as $200 that were imposed on the June bills of some Philadelphia gas customers.

The consumer advocate’s office said it would investigate whether the method that Philadelphia Gas Works uses to calculate the weather normalization adjustment (WNA) is unjust and discriminatory, and it has the authority to file a formal legal complaint with state regulators.

As first reported in The Inquirer, the weather provision allows PGW to increase or decrease a customer’s bill if the weather deviates from normal. PGW has been allowed to add the WNA to bills during winter months for the last 20 years, which usually results in relatively small charges or credits that attract no attention. But many PGW customers complained they got hit with bills this month that included weather charges for May usage that were larger than their biggest bills during the coldest part of winter.

“My office is looking into PGW’s application of the WNA to see whether there was an error in the calculation as well as whether, even in the absence of an error, the WNA should be modified or eliminated because it produces unjust and unreasonable rates” said Consumer Advocate Patrick Cicero, who was appointed to the post last year by Attorney General Josh Shapiro, and confirmed by the Pennsylvania Senate this month.

» READ MORE: What to do if your ‘weather normalized’ PGW bill is not normal

“The simple truth is that no one expects to get a high gas bill in June,” Cicero said. He said it can be especially challenging for households on fixed incomes because state heating assistance programs have already closed for the season and limited help is available.

As The Inquirer reported on Sunday, many PGW customers complained about staggering June gas bills at a time of the year when heating costs are typically very small. The big bills were caused by weather normalization charges, which apply regardless of whether a customer is served by a competitive supplier. The charges are unrelated to rising energy costs.

According to an Inquirer analysis, the biggest weather charges were imposed on bills that were issued after June 11, which coincided with unusually warm weather during the previous 30-day billing cycle. The charge allows the utility to make up for the money it otherwise would have lost. One Point Breeze customer with a studio apartment was billed $235 in June, including a $200 weather charge. Her largest previous bill, for the coldest month in winter, was about $80.

PGW told the Office of Consumer Advocate it is “standing by” the WNA calculation, Cicero said. The city-owned nonprofit utility contends that the fee was applied correctly according to the formula approved by the Pennsylvania Public Utility Commission (PUC).

Richard G. Barnes, a spokesperson for PGW, told The Inquirer in an email on Wednesday, that the company is “currently assessing the weather normalization adjustment situation in light of the impact it had on customers.”

Cicero said the bills his office has examined “just seem so significantly divergent from past practice” that even if the formula were applied correctly, the formula itself needs to be reexamined.

“Our view of this is that PGW should suspend operation of the WNA until we get this figured out to ensure that it doesn’t produce these kinds of unjust, unreasonable and potentially discriminatory rates,” Cicero said in an interview.

The consumer advocate is empowered to file complaints with the PUC, which often result in a negotiated settlement with the utilities. “We want to try to correct the problem and find a remedy if there’s a remedy that can be had,” he said.

Cicero also said his office will examine whether a 2017 change in the way historical “normal weather” is calculated had contributed to the current round of excessive bills. The historical average is the basis upon which PGW judges whether the actual weather experienced during a customer’s most recent billing cycle diverged from the weather in the past.

During a 2017 rate-increase request, PGW warned that it would be facing increasing financial challenges because climate change was causing consumers to use less gas. It asked the PUC to change the basis of the historical weather from a 30-year average temperature in Philadelphia to a 10-year average. The PUC settled on 20-year average after consumer advocates argued that a 10-year average would cause too much volatility in consumer billing.