Aug. 28--The state Public Utility Commission halved a natural gas base rate increase sought by UGI Penn Natural Gas.

Starting today, consumers face a permanent increase in customer charges and distribution rates, even as the price of natural gas continues to fall, promising some reprieve when the heating season comes.

The bill for an average residential customer using 8.9 mcf -- or thousand cubic feet -- of natural gas a month will increase 7.8 percent from $138.91 to $148.99.

The original increase sought by UGI would have propelled the average bill 12.7 percent to $155.94.

The change affects both the monthly customer charge and distribution rates.

Distribution rates, which pay for delivery of natural gas to homes, will increase between 17 and 20 percent. The rate for the first 8 mcf of natural gas, will go from $3.02 each to $3.54. The distribution rate for each mcf thereafter will increase from $2.77 per mcf to $3.34.

The customer charge, a flat rate levied per month will increase 13 percent from $11.75 to $13.25.

The distribution and customer charges cover the cost of operating the natural gas distribution system, billing, meter reading and emergency response.

In its request made in January, UGI sought an additional $38.1 million from its customers, citing expenses in delivering natural gas. After hearing from other parties in the case, the PUC concluded that some of those expenses were not necessary, and approved $19.75 million of additional revenue for the Allentown-based utility. That will increase utility revenue by 5.9 percent.

"We always feel our requests are justified," said UGI spokesman Joseph Swope. "But there are lots of moving parts to how utilities serve customers. After all sides argued and each gave a little, we are still able to delivery natural gas reliably and safely."

Increases paid by consumers will be temporarily offset by the lower price of natural gas. A direct, pass-through cost, natural gas prices hit a seven-year low recently, and UGI officials anticipate that purchased gas cost rates will be adjusted downward 10 percent on Dec. 1.

"One of the only silver linings of the economic recession is the decline in natural gas prices," said state consumer advocate Irwin "Sonny" Popowsky. "Consumers will see significantly lower natural gas costs this heating season."

UGI Penn Natural Gas provides natural gas service to approximately 160,000 customers in 13 counties. It is a unit of Valley Forge-based UGI Corp.

Contact the writer: dfalchek@timesshamrock.com

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