PennEnvironment testimony on the proposed gas rate increase by Philadelphia Gas Works (PGW)

Flora Cardoni, PennEnvironment Deputy Director

May 6, 2025

Testimony on the proposed gas rate increase by Philadelphia Gas Works (PGW)

PennEnvironment Deputy Director testifies at the Pennsylvania Public Utility Commission public input hearing for proposed rate changes by Philadelphia Gas Works on May 6, 2025 in PhiladelphiaPhoto by Jess Benjamin for Earthjustice | Used by permission

Hello. My name is Flora Cardoni and I am the Deputy Director with PennEnvironment, the statewide, citizen-based, environmental advocacy nonprofit. I am also a PGW customer who lives in West Philly. Thank you for the opportunity to testify today both for myself and on behalf of PennEnvironment’s citizen members across Philadelphia.

I am here today, because I am concerned about PGW’s proposal to require Philadelphians to pay more on their utility bills in order to build out wasteful gas infrastructure, instead of investing in a cleaner and greener future. 

In particular, I am concerned about PGW’s long term pipe replacement program. This program is too expensive, wasteful, and is incompatible with Philadelphia’s climate goals.

Philadelphia officials have made a commitment to be carbon neutral by 2050. That is in line with what scientists agree must be done in order to stop the worst impacts of climate change. And in order to meet that goal, we need to move away from burning fossil fuels like gas. 

As such, it is absurd that PWD is proposing to spend 6-8 billion dollars on new fossil fuel infrastructure in the form of new pipes, with the expectation that Philadelphia ratepayers will be paying for them over 40 to 60 years. This multi-decade investment to continue our reliance on harmful fossil fuels pushes us far beyond the deadline by which the scientific community said we must stop burning gas and fossil fuels and the city’s 2050 deadline for carbon neutrality. 

At the same time, PGW’s customer base is shrinking, and remaining customers are using less and less gas. So PGW’s proposal for new pipes risks becoming stranded assets paid for by their customers or Philadelphia taxpayers. Especially when PGW’s cost per mile of pipe replaced has steadily increased, costing ratepayers more and more. 

Rather than perpetuating the status quo by defaulting to always replacing risky pipes with all new pipes and forcing ratepayers to float the bill, PGW should consider more technologically effective and more cost effective alternatives like more targeted pipe replacement programs. This would mean smaller bill increases, while still keeping us safe. 

Of course, protecting public safety is important. Especially given that gas is inherently unsafe. In fact, according to a report from the US Public Interest Research Group, a gas pipeline incident occurs somewhere in the U.S. approximately every 40 hours. This hit home when in 2019, two people died when a leak from a gas main caused an explosion in South Philly. And it is true that PGW has “at risk” pipes. According to federal data, at the end of 2023, PGW had over 1,700 miles of at-risk leak prone pipes remaining in its system. But again, the answer to that problem is not building out an expensive network of all new pipes. PGW should instead do more targeted repairs that cost less.

In addition, I am also concerned about PGW’s Revenue Normalization Adjustment program. This proposal would guarantee PGW’s revenue–even when it makes shortsighted and bad business decisions.

PGW claims it needs guaranteed revenues because sales volumes are declining for a variety of reasons, including customers replacing gas appliances with electric. It’s inappropriate to respond to decreasing gas usage by guaranteeing PGW’s income and forcing ratepayers to foot the bill. A better path forward to respond to declining demand would be to lower the overall costs of the PGW system by limiting unnecessary investments, and to continue encouraging energy efficiency and building electrification. 

PGW should do longer-term planning for the future on how they can bring down capital costs while protecting our environment, climate, and ratepayers. It is time to stop sticking customers with higher bills so PGW can operate business as usual. PGW must also stop investing in just one declining energy source that is not only contributing to climate change, but also can’t compete in the market today. Instead, PGW must find new and cleaner alternatives, and diversify the sources of energy they supply so that they can actually be cost effective and successful in the 21st century.

To me, this is like if it were 2015 when Blockbuster video stores were being shuttered all over the city and nation, as Netflix grew in popularity. And instead of disinvesting from Blockbuster videos and getting into the product everyone wants, Blockbuster forced all of their customers to pay more so they could spend billions on real estate for more brick and mortar Blockbuster stores. It wouldn’t make sense, and their customers wouldn’t want to pay for it. PGW is in that same boat in today’s energy market.

Finally, I am troubled by the fact that PGW is only offering to create programs that would help low and moderate income customers–including a health and safety program, a full home energy efficiency program, and a program to repair or replace unsafe heating equipment–in exchange for guaranteed revenue, but if and only if PGW gets its guaranteed revenue. These programs are good ones that PGW should run regardless of any revenue guarantee. It’s disappointing PGW is attempting to use programs that would conserve energy, lower utility bills, clean up our air, and lower climate pollution as leverage to win guaranteed revenue, when they could just be implementing them today.

Ultimately, given the city’s climate pollution reduction goals and the need for a long term transition off gas for our health and climate, PGW should not be building out the gas system or making ratepayers pay more to guarantee gas revenue. Instead, PGW should be lowering system costs through energy efficiency, electrification, and more targeted repairs. PGW should also be planning for the long term in a way that protects ratepayers’ wallets and safety and protects our climate at the same time. Thank you.