Pennsylvania Communities Organizing for Change, Inc., d/b/a ACTION United, Carol Collington, and Nettie Pelton, Petitioners
Pennsylvania Public Utility Commission, Respondent
Argued March 12, 2014
Appealed from No. R-2010-2215623. State Agency: Pennsylvania Public Utility Commission.
Patrick M. Cicero, Harrisburg, for petitioners.
Louise G. Fink Smith, Assistant Counsel, Harrisburg, for respondent.
Michael W. Hassell, Harrisburg, for intervenor Columbia Gas of Pennsylvania, Inc.
Candis A. Tunilo, Assistant Consumer Advocate, Harrisburg, for intervenor office of Consumer Advocate.
BEFORE: HONORABLE DAN PELLEGRINI, President Judge, HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE RENÉ E COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE MARY HANNAH LEAVITT, Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE ANNE E. COVEY, Judge.
DAN PELLEGRINI, President Judge
Pennsylvania Communities Organizing for Change, Inc., d/b/a ACTION United, Carol Collington, and Nettie Pelton (collectively, ACTION) petitions for review of the order of the Pennsylvania Public Utility Commission (Commission) denying its exceptions and adopting the Administrative Law Judge's (ALJ) Recommended Decision, as modified, dismissing ACTION's challenge to how certain energy assistance funds were allocated. For the reasons that follow, we affirm.
Columbia Gas of Pennsylvania, Inc. (Columbia) provides natural gas service to residential, commercial, industrial, resale and transportation customers in parts of western and central Pennsylvania. Columbia provides a customer assistance plan (CAP) which reduces the amount its residential customers with incomes at or below 150% of the Federal Poverty Level (FPL) have to pay for their natural gas service. These reduced rates are authorized under the Natural Gas Choice and Competition Act, 66 Pa. C.S. § § 2201-2212, and the Commission's regulations, 52 Pa. Code § § 69.261-69.267. The reduced amount is referred to as the " asked-to-pay" amount. The remainder of the CAP customer's bill, referred to as the " CAP Shortfall" or the " CAP credit," which is paid by a surcharge on all other residential non-CAP customers collected by Columbia, is referred to as the Universal System Plan (USP) Rider. The Commission reviews Columbia's CAP every three years through its Universal Service and Energy Conservation Plan filing and through general base rate proceedings.
The Low-Income Home Energy Assistance Program (LIHEAP) is a federal block grant program administered by the Pennsylvania Department of Public Welfare (Department) pursuant to an annual State Plan that provides assistance to low-income customers in meeting their home heating needs. LIHEAP has three components:
cash, crisis and weatherization; a cash grant for an individual household is determined by a number of factors under Section 601.4(1) of the Department's regulations, 55 Pa. Code § 601.4(1). The component at issue here is the cash grant paid directly to Columbia as a LIHEAP provider through a vendor agreement.
Prior to 2009, Columbia and other providers applied the cash grant to a CAP customer's bill. See 52 Pa. Code § 69.265(9)(iii). This Commission regulation directed that the LIHEAP cash grant be applied to the portion of the CAP customer's bill that the CAP customer did not pay, i.e., the CAP Shortfall or CAP Credit. In 2010, the Department directed the utilities to apply the LIHEAP cash grant to the CAP customer's asked-to-pay amount rather than the CAP Shortfall. The net result was that subsidized customers paid more of their natural gas bill because the asked-to-pay amount was directly offset by the LIHEAP cash grant and the cash grant was no longer applied to the customer's CAP Shortfall.
Columbia then developed a new plan called the CAP-Plus program, under which the LIHEAP cash grant is directly applied to a CAP customer's asked-to-pay amount, but the asked-to-pay amount was now determined through a two-step process: first, one of four options is selected for the customer to form a base amount; 
and second, a " plus" amount is added to each CAP customer's monthly bill determined by using the aggregate LIHEAP cash grant received by Columbia in the prior year divided by the number of CAP customers divided by 12 to cover the CAP Shortfall that was formerly offset by LIHEAP funds under Section 69.265(9)(iii). (R.R. at 74a-75a). The " plus" amount is added to every CAP customer's bill whether or not they participate in LIHEAP and ...