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PGW, Gas Commission back 10‑year extension of Transco storage deal to shield ratepayers
Summary
PGW and the Philadelphia Gas Commission told council that bill 260113 would approve a third amendment extending PGW’s storage service agreement with Transcontinental (Transco) to 2035, preserving ~20% of PGW’s storage capacity; officials estimate the amendment will cost about $1.8 million annually and argued it would be cheaper than replacement options.
Dan Cassidy, vice president of technical operations at Philadelphia Gas Works, and Jamala McClendon, executive director of the Philadelphia Gas Commission, testified that bill 260113 would approve an amendment extending PGW’s storage service agreement with Transcontinental Gas Pipeline Company (Transco) through April 1, 2035.
Cassidy said the contract—PGW’s only open‑access storage agreement—accounts for roughly 20% of the utility’s total storage capacity and that Transco offered PGW options of three, five or 10 years; PGW selected the 10‑year option as the most economically advantageous. Witnesses said the amendment insulates PGW and its ratepayers from market price fluctuations, helps ensure reliability, and could be materially less expensive than attempting to replace equivalent storage capacity in the market.
McClendon supplemented PGW’s testimony with the Gas Commission’s unanimous recommendation to council. Both witnesses asked for a favorable recommendation and for rules to be suspended so the bill can receive first reading. PGW testimony estimated the proposed amendment would cost approximately $1.8 million per year; committee testimony also described a worst‑case estimate of $5.3 million per day in spot‑market costs without storage, as presented by PGW in the hearing record.
Committee members asked about the options considered and whether the amendment had been factored into recent rate adjustments; witnesses said the option was available in three‑, five‑ and 10‑year forms and that the amendment was not yet reflected in the last rate adjustment because it was not in place at that time.
The committee reported bill 260113 with a favorable recommendation and requested suspension of the rules to permit first reading at the next session.
