Pennsylvania commercial gas: PGW and NGDCs

Six distribution companies, and which one delivers to you

Pennsylvania's gas distribution does not follow its electric map. UGI Utilities serves the Wilkes-Barre, Reading and Lehigh Valley areas and the counties around them; Columbia Gas of Pennsylvania covers the south-west; National Fuel Gas Distribution covers the north-west; PECO serves the suburban south-east; Peoples Natural Gas covers the Pittsburgh region; and Philadelphia Gas Works serves the City of Philadelphia itself. Because the footprints are assigned street by street, two plants in the same industrial park can sit with different delivery companies. The electric comparison is worth making explicitly, because it catches people out: a business that receives electricity from PPL or PECO is not necessarily on that company's gas system, and inside the city of Philadelphia the gas delivery utility is PGW rather than PECO. The meter settles both questions.

• UGI Utilities: Wilkes-Barre, Reading and the Lehigh Valley, with the surrounding counties.
• Columbia Gas of Pennsylvania: south-western Pennsylvania.
• National Fuel Gas Distribution: north-western Pennsylvania.
• PECO: gas distribution in the suburban south-east, not in the city itself.
• Peoples Natural Gas: the Pittsburgh region. PGW: the City of Philadelphia.
• Delivery territories are street-level; confirm from the meter before quoting anything.

What the Choice Act separated, and what it left alone

Pennsylvania's retail gas market runs on the Natural Gas Choice and Competition Act at 66 Pa.C.S. Chapter 22, which separates the supply of the commodity from its delivery. The distribution company keeps the pipes, the meter, the leak response and a regulated delivery tariff, and the customer may buy the gas itself from a licensed supplier. The Act also recognises city natural gas distribution operations as a category of their own, which is why Philadelphia's system is governed differently from the five investor-owned utilities. One mechanism in that chapter matters most to large users: a distribution company that holds firm transportation or storage capacity may release, assign or transfer that capacity — or supply associated with it — to licensed suppliers or to large commercial and industrial customers on its system, within the terms of its tariff and the Commission's rules. That is the arrangement that lets a large Pennsylvania site buy gas upstream and still have it moved to the plant.

• Supply is competitive; delivery remains a regulated utility tariff.
• The Act is at 66 Pa.C.S. Chapter 22 and treats city systems as a separate category.
• Capacity release lets firm transportation or storage rights move to suppliers or large users.
• The distribution company's tariff governs how that release works in practice.
• Consumption is billed in therms; capacity is the other half of the same contract.

PUC licensing: what stands behind a supplier's name

No company may enrol a Pennsylvania customer for gas supply without a licence from the Public Utility Commission, and the conditions of that licence are set out in the Commission's rules at 52 Pa. Code Chapter 62, restated in the licensing rulemaking published at 44 Pa.B. 3551. The process is closer to an authorisation than a registration: an applicant is assessed on financial and technical fitness, must give the Commission a Pennsylvania address for service of process, and must maintain security for its financial responsibility. Transfers of a licence need prior approval, and the Commission can refuse, suspend or revoke one. The practical value of this for a buyer is that the Commission publishes the list of suppliers it has licensed, so the first check on any offer — particularly one that arrived by phone — is whether the seller appears on it.

• A PUC licence is a precondition of enrolling customers, not an optional credential.
• Licensing rules sit at 52 Pa. Code Chapter 62, restated in the 2014 rulemaking.
• Fitness review covers financial and technical capability, plus a bond or other security.
• The Commission publishes the licensed supplier list — check the seller against it.
• Licence transfers require prior approval, so a renamed brand is worth a second look.

The default supply rate has a name, and a reset date

Every Pennsylvania distribution company sells a default commodity — the gas a customer buys when it has not chosen a supplier — and almost none of them calls it a price. PGW names it a Gas Cost Rate, recalculated for twelve monthly billing periods beginning in September, with the tariff permitting an interim revision if a material over- or under-collection is expected. PECO carries gas sales through a commodity charge alongside a gas-cost-adjustment charge and a gas-procurement charge. The other companies file a Purchased Gas Cost or a Gas Cost Rate that is commonly set annually and adjusted in between. The name matters because these are pass-through cost recovery rather than a retail margin: they move as the wholesale gas price moves and as the company's own hedging and storage decisions work through. The consequence for comparison is direct. The default rate and the index a supplier's variable product follows are both tied to the same underlying market, so an index-tracking offer is not automatically cheaper than the utility's filed rate — it is a different instrument on the same commodity.

• PGW's default rate is a Gas Cost Rate, set for twelve monthly billing periods from September, subject to interim revision.
• PECO bills gas sales through a commodity charge plus a gas-cost-adjustment and a gas-procurement charge.
• Other companies file a Purchased Gas Cost or a Gas Cost Rate, commonly annual with interim adjustments.
• Default rates are pass-through cost recovery, not a retail margin — they move with the market.
• A supplier's indexed product tracks the same commodity, so it is not automatically cheaper.

The rate class, not the company, decides what a site pays

Pennsylvania sets no single commercial threshold; each distribution company's tariff draws its own class lines by annual usage, and those lines decide which schedule a site is on and whether transportation is even available to it. Peoples' tariff material, for example, separates a small general service transportation schedule covering up to 499 Mcf a year from a medium general service schedule at 1,000 to 2,499 Mcf a year, with the bands above that set by the company's own filing rather than by a state rule. The arithmetic repays knowing: a therm is 100,000 Btu and an Mcf is roughly 1,000 cubic feet of gas at about 1,000 Btu per cubic foot, so an Mcf is about ten therms. Five hundred Mcf a year is about 5,000 therms, and 2,500 Mcf is about 25,000 therms. A site that reads its bill in therms and its contract in Mcf can misread its own class, so convert to one unit before deciding which schedule applies.

• Class lines are utility-specific, drawn in each company's own tariff rather than set by a state threshold.
• Peoples' small general service transportation schedule runs up to 499 Mcf a year; medium general service at 1,000 to 2,499 Mcf.
• An Mcf is roughly ten therms (1,000 cubic feet at about 1,000 Btu per cubic foot).
• 500 Mcf a year is about 5,000 therms; 2,500 Mcf is about 25,000 therms.
• Read the bill and the contract in the same unit before deciding which class applies.

Firm transportation is a separate eligibility, not a discount

Buying gas from a supplier rather than the utility is not a matter of electing a cheaper rate; it is a change of service category. To take supply from a marketer, a site must generally qualify for the distribution company's firm transportation service, in which the customer or its supplier arranges the gas and the company moves it. PGW states plainly that its Gas Cost Rate does not apply to customers transporting gas through a qualified supplier — the default supply charge falls away precisely because the customer is now buying the commodity itself. Eligibility for transportation is set by the tariff and can turn on annual Mcf, design-day demand, hourly requirements, balancing and nomination obligations, credit, and the supplier's own qualification with the company. That is why the threshold question for a large Pennsylvania site is not which supplier is cheapest but on which transportation schedule the meter qualifies, because the schedule is what a supplier has to price against.

• Choice means moving from sales service to firm transportation, not discounting the utility's rate.
• To buy from a marketer a site must generally qualify for the company's firm transportation service.
• PGW's Gas Cost Rate does not apply to customers transporting through a qualified supplier.
• Eligibility can turn on annual Mcf, design-day demand, balancing, credit and supplier qualification.
• Ask which transportation schedule the meter qualifies for before comparing supply offers.

PGW: a city system with its own supplier tariff

Philadelphia Gas Works is owned by the City of Philadelphia, and its Gas Choice programme is administered under PGW's own supplier tariff rather than folded into the investor-owned utility regime. Suppliers must be licensed by the PUC to operate in PGW's service territory, and the billing arrangement available to a given account is set by the tariff and by the account's size. PGW offers a rate-ready purchase-of-receivables consolidated billing option for Gs commercial and industrial customers with annual usage of 5,000 Mcf or less, and separately offers dual billing and interruptible transportation options to suppliers. Its own Gas Cost Rate, the default commodity charge, is set for twelve monthly billing periods and does not apply to customers transporting through a qualified supplier. The consequence for a Philadelphia buyer is that the mechanics of the arrangement — who bills what, and whether the site can be interrupted — follow from the account's classification, so they should be established before the supply price is discussed rather than after.

• PGW is city-owned; its Gas Choice programme runs under its own supplier tariff.
• Suppliers must hold a PUC licence to operate in the PGW territory.
• Consolidated rate-ready purchase-of-receivables billing is offered for Gs C&I accounts up to 5,000 Mcf a year.
• The Gas Cost Rate applies for twelve monthly billing periods and excludes transportation customers.
• Dual billing and interruptible transportation are separate options available to suppliers.
• Establish the billing and interruption arrangement before comparing supply offers.

Storage is a cost line, not a product Pennsylvania sells

Unlike a state with a merchant storage market, Pennsylvania does not offer commercial customers a standalone, tariffed storage product to buy. Storage costs are recovered inside the regulated supply and demand charges: PGW describes its demand costs as the fixed costs of transporting and storing gas for firm customers, and the Commission's own gas-cost formula recovers transportation and storage costs through the gas-cost rate. EIA tracks underground storage through a separate operator reporting frame, which is not the same as a distribution company selling storage service. The practical reading for a buyer is that winter security does not come from a line item called storage on a Pennsylvania gas bill. It comes from the firmness of the supply contract and the service priority behind the transportation — whether the withdrawal right is firm, and who is curtailed first when the system tightens.

• Pennsylvania distribution tariffs do not sell standalone storage to commercial customers.
• Storage costs are recovered inside the regulated gas-cost and demand-cost formulas.
• PGW treats demand costs as the fixed cost of transporting and storing gas for firm customers.
• EIA reports storage operators separately; that is not the same as a distribution-company product.
• Winter security comes from firm supply and firm service priority, not from a storage line item.

Where the winter risk sits for a Pennsylvania site

Pennsylvania is a winter-limited gas market: demand in the coldest weeks is met through pipelines and storage whose spare capacity in the region is thin, which is why the National Petroleum Council's December 2025 assessment of gas-electric coordination treats constrained infrastructure as a structural feature of the north-east rather than a one-off. The consequence is contractual. Service priorities decide who keeps flowing when the system tightens: firm transportation is served first, and interruptible service — which carries no capacity reservation — is the category that gets curtailed. Storage helps only to the extent the withdrawal right is firm, since interruptible withdrawals can be unavailable exactly when they are needed. For a Pennsylvania buyer this makes the interruption question a design decision rather than a detail: a site that genuinely can stop using gas has a lever to trade, and a site that cannot is buying a firmness it should be asking about explicitly.

• North-east pipeline and storage capacity is tight in the coldest weeks by structure.
• Firm transportation is served before interruptible service when the system tightens.
• Storage only hedges winter if the withdrawal right is firm, not interruptible.
• Ask what service priority sits behind the supply being offered.
• Match interruption terms to what the site can actually stop doing, and for how long.

Comparing an offer on the basis the PUC sets out

The Commission and the distribution companies publish the same short list of things to establish before signing a supply contract: the current price to compare, the length of the contract, whether the price is fixed or variable, any early-termination fee, the auto-renewal terms, and any added fees or minimum-usage conditions. The PUC's official shopping site for gas is PAGasSwitch, which is separate from PAPowerSwitch for electricity and lists offers by service territory — useful for establishing which suppliers work in your territory, though it is built around residential offers, so a commercial account should treat it as a starting point rather than a commercial price list. Normalise before comparing: put both offers in therms, on the same term, starting in the same month, and confirm whether each covers transportation to the delivery point or leaves it to the buyer.

• Price to compare, term length, fixed or variable, exit terms, renewal terms, added conditions.
• PAGasSwitch lists offers by territory; it is the PUC's own site, not a broker's.
• Compare in therms, on the same term and start month, with transportation treatment stated.
• A lower unit price that excludes transportation is not a lower price.
• Read the auto-renewal clause as carefully as the price — that is where terms go wrong.

What to gather, and how a Pennsylvania gas review runs

Gas is priced per account, so the request needs the account's actual history. Twelve months of therm totals by month, the account and meter numbers, the delivery company as the meter shows it, the current agreement's end date and notice period, and a clear statement of which loads could be interrupted and for how long. Eligibility is specific to the service address, the meter and the utility territory, and a supplier must be PUC-licensed to operate in that territory before it can serve the account at all; city systems and some customer classes have their own arrangements, so those checks precede any commercial discussion.

• Twelve months of therm totals, by month, from the actual bills.
• Account and meter numbers, plus the delivery company named on the bill.
• The current agreement's end date and the notice period written into it.
• Which loads can be interrupted, for how long, and on what notice.
• Whether the account is on a city system with its own tariff and billing rules.
• HighGround may receive provider compensation on completed purchases; disclosed site-wide.
• Sending an inquiry places no order and switches no supplier.

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