PECO: Gas Supply Favorable for '09 Winter

November 4, 2009 9:21 AM EST

PECO encourages consumers to get ready for winter, too

PHILADELPHIA--(BUSINESS WIRE)-- In a major piece of its winter readiness program, PECO has completed filling its natural gas storage facilities to serve Philadelphia area customers in the coming heating season. The storage capacity covers supplies for the coldest peak demand days, contributes more than one-third of PECO's overall gas portfolio, and hedges against wholesale market price increases during the heating months.

PECO delivered 83.7 billion cubic feet (bcf) of gas last year to its 485,000 customers in the Philadelphia suburban counties. About three-fourths of the utility's typical gas sales occur during the heating months.

"We have sufficient gas supply to reliably meet the needs of our customers this winter and for the year ahead. PECO arranges its gas supply in a number of ways to provide the best available price for our customers," said Carlos Thillet, PECO manager, Gas Supply & Transportation.

PECO encourages its customers to get ready for winter, too. Homeowners should get their house heaters inspected and cleaned regularly, replace the air filter for the heater, and look for ways to weatherize the home. Many simple steps can ensure heater safety and efficient operation, as well as comfort and cost savings. Visit www.peco.com/save for more winter energy saving tips and information on customer assistance programs.

PECO operates a liquefied natural gas storage plant, located in West Conshohocken, Pa., which has a capacity of 1.2 billion cubic feet (bcf) of gas; a propane gas storage plant in Chester, which has a capacity of 1.68 million gallons; and eight contracts for storage of 22.9 bcf of gas along interstate pipelines. The gradual process of refilling the various storage facilities began in April shortly after the last heating season ended.

Carlos Thillet, PECO manager, Gas Supply & Transportation, will speak on the company's winter readiness activities at a meeting with the state Public Utility Commission (PUC) in Harrisburg on Thursday, Nov. 5. Thillet said PECO purchased gas for storage during the non-peak demand months at a significantly lower cost than the gas purchased and stored for last winter.

PECO establishes its gas rate on December 1 of each year based on current and projected supply costs for the next year, under regulations set by the PUC.

While PECO's current gas rate is approximately $1.07 per hundred cubic feet (ccf), or about 10 percent less than last year, it is not yet known what the Dec. 1 gas rate will be. Then, PECO can only adjust its rates on a quarterly basis based on any changes in wholesale market prices, unlike retail dealers for gasoline and oil.

Thillet said about half of PECO's winter gas commodity costs is based on current market rates set by daily, weekly or monthly market indexes at the time the gas flows on the interstate pipelines to the Philadelphia area. The prices of the other half of winter deliveries is based on the non-winter purchases for storage and gas priced in the futures market to protect customers from any volatility in the wholesale market.

In addition to securing ample gas supply, PECO said it invested $11 million on upgrading underground mains and services with larger facilities to meet increased demand in certain areas. The capital investment will ensure improved gas service during winter for 24 communities across the suburbs. The company also spent about $6 million on other gas main replacements for better service reliability, fewer leaks and odors.

Based in Philadelphia, PECO is an electric and natural gas utility subsidiary of Exelon Corporation (NYSE: EXC). PECO serves 1.6 million electric and 485,000 natural gas customers in southeastern Pennsylvania and employs about 2,400 people in the region. PECO delivered 83.7 billion cubic feet of natural gas and 39.4 billion kilowatt-hours of electricity in 2008. Founded in 1881, PECO is one of the Greater Philadelphia Region's most active corporate citizens, providing leadership, volunteer and financial support to numerous arts and culture, education, environmental, economic development and community programs and organizations.

    Source: PECO

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