Submitted by Cute_Platypus_5989 t3_11axypk in Pennsylvania
Cute_Platypus_5989 OP t1_j9uzj2d wrote
Reply to comment by hypotenoos in is there a reason why the citizens of Pennsylvania allow utilities to be so high? by Cute_Platypus_5989
Natural gas rates are 7% above national average. Even though Pennsylvania produces the 2nd most natural gas in the USA only Texas produces more. Corporation's are the ones who "lobby" to have governments spend a certain way.
pa_bourbon t1_j9w9j0r wrote
By PUC regulation the distribution utility makes no money on the gas they distribute. They pass it through at cost. The other charges on the bill are based on convincing the PUC that the improvements they are making are necessary for continued safe operation.
Unfortunately we have a lot of old pipes in the ground that need updated. That costs money.
ronreadingpa t1_j9y5s48 wrote
Utility isn't supposed to profit on supply, but insiders and other companies associated with possibly could. I suspect that's the situation with PPL. Something that should be investigated.
Very odd with how PPL default supply rate went from middle of the pack to the highest so rapidly this past June followed by another sizeable increase again in December.
As for utility infrastructure, much needs repair, but adding surcharges is shady verses simply raising the distribution rate directly. Maybe surcharging is a legitimate approach, but have my doubts. PUC should do more to protect both utilities and consumers.
pa_bourbon t1_j9ytdo0 wrote
I’m in western PA. Our Penn Power rates have had similar increases in the last year or so. It’s all tied to the price of natural gas since we generate a lot of electricity with natural gas.
The war in Ukraine created a spike in global gas prices. That flowed through to your utility bills. Both electric and gas. Gas has cratered lately due to the relatively warm winter. Downward adjustments are coming.
Surcharges and weather normalization factors are all allowable and still regulated by the PUC. Utilities are switching to these since usage is dropping due to gains in efficiency. All of the infrastructure still needs to be paid for and charges that are based on consumption are too variable. So they switch to surcharges and normalization factors to try to stabilize revenue.
The US has some of the lowest fixed monthly customer charges in the world. Places in Europe charge $20-$30 a month or more as a base charge because of this same issue.
Nationally we are shutting down the cheapest most reliable source of generation in nuclear. That isn’t helping costs either.
Cute_Platypus_5989 OP t1_j9wa76b wrote
I'm confused how does the company survive if they make no money?
pa_bourbon t1_j9wb6qd wrote
I said they sell the gas at cost. I didn’t say they made no money.
Utilities operate on an allowable rate of return on invested capital on the allowable rate base. Invested capital to a gas utility is made up of pipes, pumping stations, valves, storage facilities, buildings and vehicles, computer systems, etc.
In a complex calculation, these assets depreciate a little of their value each year throughout their useful life. The role of the PUC is to set the allowable return on that asset base, then the utility needs to manage rates to that return in consultation with the PUC on a periodic basis.
But the gas is straight pass through at cost. They make their money on the fixed fee charged monthly and other charges on the bill (distribution charges, special riders as agreed by the PUC, etc).
Natural Gas prices have plunged recently. The commodity charges get adjusted by the PUC quarterly to make sure there is no profit on the gas. A downward adjustment is coming soon depending on your utility’s schedule.
hypotenoos t1_j9uzrxn wrote
Really because a huge chunk of the DOT funds goes to pay for pensions for state employees.
That’s not a corporation.
Also do you think those natural gas rates are higher because of democratic or Republican actions in PA?
The cheapest natural gas isn’t found in blue states, that’s for sure.
ktxhopem3276 t1_j9vibld wrote
> Really because a huge chunk of the DOT funds goes to pay for pensions for state employees.
What is the actual percentage? Other reasons might be because we have an elderly population that doesn’t pay much income tax.
> Also do you think those natural gas rates are higher because of democratic or Republican actions in PA?
democrats have a crazy philosophy of not destroying land and ecosystems in the name of exporting cheap energy out of state
https://commodity.com/blog/natural-gas-states/
>. The cheapest natural gas isn’t found in blue states, that’s for sure.
New Mexico? Colorado?
hypotenoos t1_j9vjko4 wrote
Have you been living under a rock?
The big debate over charging municipalities without police for state police coverage is all premised on being able to pay for state police without dipping into the fuel tax revenues as they have for years now.
Maybe try a couple states that are a bit bluer and not a thousand miles away. New York? Massachusetts? PA is cheaper than both.
ktxhopem3276 t1_j9vkce2 wrote
>. Have you been living under a rock?
Yes that’s where all the gas is.
> The big debate over charging municipalities without police for state police coverage is all premised on being able to pay for state police without filling into the fuel tax revenues as they have for years now.
What does that have to do with pensions?
> Maybe try a couple states that are a bit bluer and not a thousand miles away. New York? Massachusetts? PA is cheaper than both.
I was listing states that have locally sourced cheap gas, and are more blue than PA. You listed blue states that have no local geological deposits of gas so I’m not sure what your trying to prove.
hypotenoos t1_j9vkms7 wrote
State Police collect pensions. Lots of pensions.
ktxhopem3276 t1_j9vlxmh wrote
State police are around ten percent of pendot budget. Demcorats have tried to get rural republicans to pay their fair share of state police funding but conservatives only believe in self sufficiency for other people and not themselves. If the state had a higher income tax or more working age people, this would be less of an issue. Pa also has three times as many miles of state road as New York. We even have twice as many as ohio.
melranaway t1_j9z5rdm wrote
I think the outrage belongs to the legendary gas tax installed by the Corbett era (republican) and increased two more times during the Wolfe (democrat) era. It’s the added tax to the gas pump. It was touted as a tax to fix our roads and bridges when they passed it… instead 4.3 billion went to the pensions of the state police. 4.3 billion.
ktxhopem3276 t1_j9z8nxf wrote
>I think the outrage belongs to the legendary gas tax installed by the Corbett era (republican) and increased two more times during the Wolfe (democrat) era.
Wolfe didn’t increase the gas tax. Those were automatic increases from the Corbett law
> It’s the added tax to the gas pump. It was touted as a tax to fix our roads and bridges when they passed it… instead 4.3 billion went to the pensions of the state police. 4.3 billion.
That’s not entirely accurate. The $4.3b is the entire state police budget over several years. Democrats proposed changing the law to charge rural areas state police user fees. Regardless, that 4.3b is only ten percent of the entire pendot budget so it isn’t the only factor affecting pendot budget issues. Some issues are
decades of lower taxes and deferred maintenance has created a massive backlog
more state miles of roads per capita than almost every other state in the country
located in climate zone that has some of the most frequent freeze thaw cycles leading to defrosting roads
State is especially susceptible to landslides that destroy road
Anemic population growth but same amount of roads
Elderly population doesn’t pay income tax.
melranaway t1_j9z9egn wrote
I know Wolfe didn’t increase it bc it was set to increase the two times during his tenure bc of Corbett. Wolfe also could’ve put a stop to it.
ktxhopem3276 t1_j9z9qvd wrote
Wolfe can’t rewrite the law. If the automatic increases are written into the law by the legislature and the law is signed by a previous governor, he has no authority to stop the increase without breaking the law.
melranaway t1_j9z9l87 wrote
Also 4.3 billion went to pensions and not the roads/bridges.
ktxhopem3276 t1_j9zaad5 wrote
That $4.3 billion was for operations of state police and not just retirees pensions. It was over ten years and amounted to only ten percent of pendot s budget over that time period
melranaway t1_j9zay85 wrote
You have proof about the budget? When they did the audit a few years back that’s when they discovered the 4.3 billion went to pensions. That was in the papers, radio, and news. It was a pretty big story that upset a lot. As for Wolfe re writing laws. Understand that. He could’ve brought it out more into a public focus and put the lime light on his fellow Republican lawmakers who chose to make such a crappy tax.
melranaway t1_j9zbdi5 wrote
So the issue is if you promote something. Say it’s going for one thing. Let’s say for example the roads. Then you turn around and use it for another thing… wouldn’t that fall under a false tense? A type of fraud to the public?
ktxhopem3276 t1_j9zczq8 wrote
I never said it wasnt fraudulent. I’m just pointing out it was only one small part of a giant mess
melranaway t1_j9zb58e wrote
How come Vermont has stellar roads? Shoot just driving over the border on route 29 you can feel the massive difference. I think they might get a little bit more extreme weather then we do in Pa?
ktxhopem3276 t1_j9zcubt wrote
PA has more freeze thaw cycles than Vermont. Places that stay below freezing most of winter actually have less road damage than places that fluctuate constantly near the freezing point.
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