UGI Utilities — Gas Division residential customers could eventually see a 10.6% hike in their natural gas rates.

The company filed a request filed Tuesday with the Pennsylvania Public Utility Commission to increase its base rates for residential, commercial and industrial customers by $74.6 million annually.

Joe Swope, media relations manager, explained the reason for the request.

“UGI is making a significant capital investment in our system driven primarily by both upgrading our infrastructure in the ground, and replacing our noncontemporary mains with new mains made with contemporary materials,” Swope said.

“In addition, we are upgrading our system in other ways as well through significant investments in our information technology systems to provide safe and reliable natural gas service to our customers for many years to come.”

“This rate increase will support ongoing distribution system improvements and technology system upgrades,” Christopher Brown, UGI vice president and general manager for rates and supply, said.

The company’s filing includes over $373 million in budgeted system investments for system infrastructure, facilities and information technology investments which are not yet included for recovery in current rates.

“A significant part of our investment is an aggressive infrastructure betterment initiative designed to replace all noncontemporary pipelines with those made of contemporary materials,” Brown said.

The UGI rate increase request will impact the delivery charge portion of a customer’s bill. The delivery charge provides a utility with the funds needed to own, operate and maintain the gas distribution system and provide customer service and emergency response services.

Assuming the full amount of the proposed rate increase is granted, UGI customers would see the following rate impact:

The total bill for a typical residential heating customer using 73.5 ccf per month would increase from $81.54 to $90.22 per month, or by 10.6%; the total bill for a typical commercial heating customer using 28.7 mcf per month would increase from $251.83 to $273.05 per month or by 8.4% for customers in the former North rate district, and for all other commercial heating customers, the total bill would increase from $262.21 to $273.05 per month or by 4.1%.

The total bill for a typical industrial customer using 93.0 mcf per month would increase from $762.99 to $817.18 per month or by 7.1% for customers in the former North rate district. For all other industrial customers, the total bill would increase from $796.61 to $817.18 per month or by 2.6%.

UGI is requesting that the new gas rates take effect March 28. However, the PUC typically suspends the effective date for general base rate proceedings to allow for investigation and public hearings. The PUC proceeding is expected to last about nine months, which would delay implementation of the new rates until late October.

Customers and interested parties may view UGI’s base rate filing materials at www.ugi.com and clicking on the “rate filing” tab on the home page. Customers with questions may also call UGI toll-free at 1-800-276-2722 for information on the proposed rate increase or to find out what actions they make take.

UGI Utilities Inc. Gas Division serves more than 654,000 customers in 45 counties across Pennsylvania There are 2,500 customers in Carbon County.