WHEREAS, The Philadelphia Gas Works (PGW) has filed a petition with the Pennsylvania Public Utility Commission (PUC) to establish a cash receipts reconciliation clause (CRRC) to reconcile PGW's projected and actual cash receipts with billed revenues on an ongoing basis; and
WHEREAS, The establishment of a CRRC would create a non-bypassable charge to all firm transportation or sales customers as part of the distribution rate, which charge would not be separately stated on the customer's bill; and
WHEREAS, The effect of the proposed CRRC would be to pass the cost of uncollected revenues on to PGW's paying customers, thereby removing appropriate incentives for PGW to pursue reasonable and thorough efforts to collect its bills from customers with the ability to pay those bills; and
WHEREAS, Another effect of the proposed CRRC would be to generate funds not otherwise available from PGW's operations to enable PGW to make the annual $18 million payment to the City of Philadelphia required by Section VII.1.b.i. of the Agreement between the City of Philadelphia and the Philadelphia Facilities Management Agreement for the Management and Operation of the Philadelphia Gas Works, provision for which is already made in PGW's approved base rates; and
WHEREAS, PGW's rates are already the highest in the Commonwealth of Pennsylvania, and the annual bill for a typical PGW residential heating customer is already projected to exceed $1,450 for the 2003-2004 fiscal year; and
WHEREAS, The effect of the proposed CRRC would be to increase the typical residential heating customer's annual bill by approximately $80 in the 2004-2005 fiscal year; and
WHEREAS, PGW customers are already struggling to pay for the high cost of gas; and
WHEREAS, PGW customers are already paying rates which include substantial expense in the range of $125 million for uncollectible billings and programs which provide rate discounts to low-income and senior citizen customers; and
WHEREAS, The establishment of a CRRC would serve to exacerbate PGW's already severe cash crisis, perpetuating a downward spiral in which increasing numbers of customers are forced into the ranks of those who cannot afford to pay their gas bills; and
WHEREAS, More productive solutions to the plight of PGW's large customer base of low and moderate income households need to be found, which shift to the federal and the state government greater responsibility for providing for the basic utility and home heating needs of these households; now therefore
RESOLVED, THAT THE COUNCIL OF THE CITY OF PHILADELPHIA hereby affirms its opposition to the Philadelphia Gas Works' (PGW) petition to the Pennsylvania Public Utility Commission (PUC) to establish a cash receipts reconciliation clause (CRRC); and
RESOLVED FURTHER, That, should the PUC approve PGW's CRRC petition despite Council's opposition, Council requests the PUC to require that, in calculating the approved CRRC surcharge amount to be assessed to customers in any fiscal year, the dollar amount of the annual payment to the City by PGW be deducted from the otherwise applicable Total Recovery Amount under the CRRC for that fiscal year; and
FURTHER RESOLVED, That Council hereby authorizes the President to transmit copies of this Resolution to the PUC and to the parties to PGW's CRRC proceeding at the earliest possible date.
End