Activists victorious in Philly over a seldom achieved triumph in their struggle to revamp PGW, regarding climate concerns
Philadelphia Gas Works (PGW) has proposed a settlement that is being celebrated by climate activists and residents alike. The proposed agreement, if approved, would result in a significant reduction of planned rate hikes by over 40%, reducing the average residential customer's monthly bill from $92.60 to approximately $60.
The settlement, which is currently under review by the Pennsylvania Public Utility Commission (PUC), provides critical protections for Philadelphia residents against increasing energy costs. It also creates a public engagement process to plan for Philadelphia's long-term climate goal of zeroing out greenhouse gas emissions by 2050.
Patrick Houston, with the group Here for Climate Justice, praised the settlement as an important step towards a clean energy future for Philadelphia. He stated, "This settlement is a significant move in the right direction for our city's climate future."
The proposed settlement requires two public hearings, but it does not require the utility to act on the results. However, PGW has agreed to review its "weather normalization" surcharge to make it more aligned with a warming climate. This is a positive step towards addressing climate concerns, as PGW had been criticized in the past for high weather normalization charges during warmer periods.
The settlement also improves PGW programs that are crucial for low-income residents, such as the customer responsibility program. It includes a commitment by PGW to budget $9 million to improve insulation and weatherize low-income customers' homes in 2026.
State Rep. Chris Rabb supports PGW transitioning to carbon-free technologies like networked geothermal. He referred to PGW as "Philadelphia Geothermal Works" during a press conference with environmental groups. Rabb expressed his hope that the settlement would mark a turning point for PGW's transition to a cleaner, more sustainable energy future.
In the past, climate advocates had been frustrated by PGW's lack of public engagement on climate issues. However, the proposed settlement creates a public engagement process, which is a positive step towards addressing these concerns. It remains unclear how PGW will act on any future public testimony about climate impacts.
The settlement reduces PGW's planned rate hike for fiscal year 2026 by more than 40%. This comes after PGW dropped its proposal for "revenue normalization," a potential surcharge to a customer's bill should the weather normalization charge not be adequate.
The proposed settlement will have to be reviewed and approved by an administrative law judge, before being passed on for approval by the Pennsylvania Public Utility Commission. A decision is expected in November.
In 2022, PGW made headlines for high weather normalization charges during a particularly warm winter, which were later refunded after an outcry. This settlement marks a significant change in PGW's approach to rate hikes and climate issues, and it is being welcomed by many as a step in the right direction for Philadelphia's energy future.
