BDC Report: $11 Billion in ‘Big Six’ Gas Pipeline Spending Drives 67% Surge in Pennsylvania Gas Utility Bills

BDC report recommends Pennsylvania reform spending on expensive gas infrastructure and invest in affordable alternatives to lower bills and strengthen its workforce

HARRISBURG, Pa.--(BUSINESS WIRE)--The Building Decarbonization Coalition (BDC) today released a new report, The Cost of Heat: Managing Pennsylvania’s Thermal Transition, finding that Pennsylvania’s largest “Big Six” gas utilities spent $11 billion on Act 11-enabled gas pipeline replacement programs from 2013 to 2025.

The report also finds that this Act 11 spending is a major driver of the 67% average increase Pennsylvanians have seen on their monthly residential gas bills over the past ten years from these Big Six utilities: Peoples Natural Gas, a subsidiary of Essential Utilities Inc. (NYSE: WTRG), Philadelphia Gas Works, National Fuel Gas Co. (NYSE: NFG), UGI Utilities Inc. (NYSE: UGI), Columbia Gas of Pennsylvania, a subsidiary of NiSource Inc. (NYSE: NI), and PECO Energy Co., a subsidiary of Exelon Corp. (NASDAQ: EXC). Act 11, passed by the Pennsylvania Legislature in 2012, allows utilities to ramp up capital spending on their gas distribution systems and accelerate their recovery of these costs through surcharges on customer bills.

“Act 11 is essentially a blank check for accelerated spending by gas utilities,” said Kristin George Bagdanov, Associate Director of Research at the Building Decarbonization Coalition. “If Pennsylvania continues to pour money into its increasingly expensive gas system, households who are already struggling to afford their energy bills will continue to see their utility gas bills rise at a rapid rate. Instead of continuing down this path, there’s a better alternative—Pennsylvania can shift some or all of the billions it plans to spend on gas pipelines towards more cost-effective thermal energy, electric grid, and other investments that will make heating homes more affordable over the long term.”

The report’s other key findings include:

• Per-mile spending on pipeline replacements has more than doubled over the past decade, from $1.2 million to $2.8 million—equating to $40,000 per residential customer for every new mile of main pipeline laid.
• Infrastructure-related delivery charges now make up roughly two-thirds of a typical Pennsylvanian’s residential gas bill, while the gas itself accounts for about only one-third.
• Gas utilities in Pennsylvania typically earn 10% to 15% return on common equity, well above the 8.5% to 9.5% return the state’s own Consumer Advocate argues is appropriate for low-risk, monopoly businesses.

“Pennsylvanians deserve affordable energy, and reforming Act 11 will lower energy bills while strengthening the state’s workforce,” said Brian Jenkins, Associate Director of Mid-Atlantic Policy at the Building Decarbonization Coalition. “Getting this thermal transition right will enable Pennsylvania’s roughly 140,000-person thermal workforce to deliver affordable, reliable heat that the state’s families can count on for decades to come.”

Reduce financial risk, lower energy bills, and strengthen the thermal workforce

BDC’s report advocates for a managed thermal transition to reduce Pennsylvania’s long-term financial risk, lower residents’ energy bills, and strengthen its approximately 140,000-person thermal workforce of drillers, pipefitters, electricians, HVAC technicians, insulators, and other workers involved in the delivery of heating and cooling across fossil and clean energy systems.

The report includes four recommendations for Pennsylvania’s Public Utility Commission, state legislators, and other key energy policymakers:

1. Reform gas planning and oversight: Update Act 11 to prioritize safety-critical infrastructure and require utilities to evaluate cost-effective alternatives before they replace pipelines. Direct the state’s Public Utility Commission to review utilities' financial returns. Require utilities to develop long-term gas system plans, improve their gas system reporting processes, and provide greater transparency in rate cases.
2. Deploy neighborhood-scale clean heat solutions: Coordinate gas and electric system planning to avoid unnecessary and duplicative infrastructure spending. Launch neighborhood-scale electrification and thermal energy network pilots where aging gas infrastructure creates opportunities for retirement.
3. Protect customers and lower energy burdens: Strengthen customer protections and assistance programs as households transition to new heating systems. Prioritize affordability by directing resources, including avoided gas pipeline replacement costs, toward bill relief and clean heat for high-burden households.
4. Build Pennsylvania’s thermal workforce: Expand training and career pathways for heat pump installers, geothermal drillers, energy efficiency professionals, and thermal energy network engineers and designers. Support local implementation of the thermal transition through high-road labor standards, local planning, utility partnerships, and early worker and community engagement.

Media Resources:

• Full Report: Read or download the full The Cost of Heat: Managing Pennsylvania’s Thermal Transition report at https://buildingdecarb.org/the-cost-of-heat-pa.
• Media Kit: Access high-resolution photos and graphs from the report, as well as report fact sheets and other materials at https://show.pics.io/cost-of-heat-media-kit.

ABOUT THE BUILDING DECARBONIZATION COALITION

The Building Decarbonization Coalition (BDC) aligns critical stakeholders on a path to transform the nation’s buildings through clean energy, using policy, research, market development, and public engagement. The BDC and its members are charting the course to eliminate fossil fuels in buildings to improve people’s health, cut climate and air pollution, prioritize high-road jobs, and ensure that our communities are more resilient to the impacts of climate change. Learn more at www.buildingdecarb.org.