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MAY 2, 2003
Contact: Media Relations (610) 774-5997
Higher Natural Gas Prices Cause PPL Affiliate to Request Increase in Gas-Cost Portion of Bills

Because of higher prices charged by natural gas producers, PPL Corporation’s natural gas affiliate has asked the Pennsylvania Public Utility Commission to approve an increase in the gas-cost portion of customers’ bills effective Dec. 1.

The preliminary request filed Thursday (5/1) by PPL Gas Utilities, which provides natural gas delivery service to 75,000 customers through its PFG Gas and North Penn Gas subsidiaries, would increase the charge for natural gas by 41 cents a dekatherm. A dekatherm is a measure of the heat energy in natural gas.

The effect on customers would vary by rate class and gas use. For a residential customer using 8 dekatherms a month, the request would result in an increase of 3.6 percent on their total gas bill, from $92.26 to $95.57 a month.

Natural gas bills have two main parts: the cost of the gas itself and the cost of delivering gas to customers through pipelines. The cost of natural gas is a pass-through charge, explained Robert M. Geneczko, president of PPL Gas Utilities.

"The gas-cost portion of customers’ bills reflect the prices natural gas producers charge us. We do not make a profit on the gas we buy for customers," he said.

"The responsibility to buy gas at the lowest cost for our customers is one we take very seriously," Geneczko noted. "In recent months, we have felt the effects of a weak economy, a cold winter and a slowdown in gas production nationwide. The combination of those events has caused gas prices to rise significantly."

PPL Gas Utilities adjusts the Purchased Gas Cost Rate component of customers’ bills each year on Dec. 1. On a quarterly basis it may adjust the gas-cost charge based on short-term changes in the price of natural gas charged by producers.

"We know that higher gas prices are an added burden on our customers," Geneczko said. "We offer programs and services to help customers, especially those with limited incomes."

The total bill of typical commercial and industrial customers would increase by 4.3 percent and 4.8 percent respectively.

The PUC is expected to rule on the request in November.