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Residential customers of UGI Utilities will see their monthly bill drop 6.3% effective Sunday, Dec. 1, the company has announced.

The average home-heating household which uses 89.2 hundred cubic feet of gas annually will see its monthly bill decrease from $84.33 to $78.98, or $5.35.

The rate reduction stems from a change in the way UGI bills its natural gas customers in Pennsylvania.

In the past, UGI devised separate “purchased gas cost” rates for customers in its northern, central and southern districts — the latter including Lancaster County.

(The purchased gas cost rate reflects the amount that UGI pays to obtain gas on the wholesale market for customers who do not buy it from an alternative supplier.)

Having separate rates according to geography was good news for customers in the northern and central districts, because large parts of those areas are located atop the state’s Marcellus Shale formations, a major source of natural gas.

“There are a number of places where UGI received gas in the north and central districts directly from Marcellus Shale wells or through midstream lines without needing transportation from the interstate pipeline system,” explained UGI spokesman Joe Swope.

That led to cheaper rates in those districts than in the southern district.

But earlier this year, UGI consolidated the three districts into one, spreading that geographic benefit across all the customers, not just those in the northern and central district.

This is good news to customers in the southern district, but not so good for customers in the northern district, who face a 1.2% price hike, and the central district, who will get a 4.3% price hike.

The northern district includes Scranton, Wilkes-Barre, Bloomsburg, Berwick and Williamsport. The central district includes Potter, Tioga, Bradford, Clearfield, Northumberland, Venango and Monroe counties.

By law, utilities are required to pass the cost of the natural gas they purchase directly through to customers without any markup. 

UGI serves 76,500 residential customers in Lancaster County, including an estimated 67,000 households which use the fuel for heat (and usually other purposes too, such as cooking).

According to the 2017 American Community Survey, natural gas is the second most common fuel for home heating in Lancaster County.

Electricity is the most popular energy source for home heating, with 35.1% of Lancaster County’s 210,000 housing units heated with that method. Natural gas is second, at 31.8%.