PHILADELPHIA, PA — A coalition of environmental, consumer, health, and faith organizations has filed expert testimony opposing Philadelphia Gas Works’ (PGW) proposed $105 million rate hike and its plan to guarantee annual revenue. The coalition, including PennEnvironment, PennPIRG, and partners such as POWER Interfaith and Sierra Club Pennsylvania, argues that the municipally owned gas utility is doubling down on costly fossil fuel infrastructure while failing to address a declining customer base and reduced gas consumption.
“Thanks to improvements in energy efficiency and competition from electric appliances like heat pumps, PGW is selling less gas to fewer customers,” said Flora Cardoni, Deputy Director of PennEnvironment. “Rather than adjusting responsibly to this new reality, PGW is proposing to double down on expensive and unnecessary fossil fuel infrastructure. We’re calling on utility regulators to rein in PGW’s proposed rate hike and initiate an investigation into the company’s path forward.”
The proposed rate hike, which represents a 16% increase, would raise average annual residential bills by $173. PGW cites its need to replace nearly half of its aging pipeline system as justification for the increase. However, critics argue that PGW lacks a comprehensive plan to mitigate risks posed by its at-risk iron pipes and point to federal data showing that similar pipe replacement programs have not significantly reduced leaks or improved safety elsewhere.
Between 2005 and 2024, residential gas consumption by PGW customers declined by 34%, with further reductions of 11% forecasted by 2028. Additionally, the percentage of Philadelphia households connected to PGW dropped from 79% in 2010 to 67% in 2024. These trends have intensified concerns about the utility’s financial viability amid declining demand.
The coalition also took aim at PGW’s proposal to guarantee annual revenue, which would allow the utility to charge customers for any revenue shortfalls. “Unless PGW takes steps to lower costs, Philadelphians will face ongoing and increasingly severe rate hikes, especially as customers use less gas or leave the gas system altogether,” said Abe Scarr, Energy and Utilities Program Director at PennPIRG. “Sadly, instead of planning for a future with declining demand or finding ways to lower costs, PGW is proposing to guarantee its revenue, forcing customers to pay more for its poor decision-making. Utility regulators should reject PGW’s proposed revenue guarantee.”
Experts representing the coalition filed testimony recommending the Pennsylvania Public Utilities Commission (PUC) reject both the rate hike and the guaranteed revenue proposal. They also urged the PUC to consider alternative strategies seen in other states, such as targeted repairs or electrification, which have been more effective in addressing safety risks and reducing costs.
The coalition’s concerns have been echoed by other groups in the case, including the PUC’s Bureau of Investigation and Enforcement, the Pennsylvania Office of Consumer Advocate, and the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania.
The five-member Public Utilities Commission is expected to make a final decision on PGW’s rate case by the end of November 2025. The outcome will have significant implications for the future of Philadelphia’s gas utility and its ability to adapt to a shifting energy landscape.
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