NOTICES
PENNSYLVANIA PUBLIC UTILITY COMMISSION
Creation of Fuel Cost Recovery Surcharge
[34 Pa.B. 3341] Public Meeting held
June 10, 2004Commissioners Present: Terrance J. Fitzpatrick, Chairperson; Robert K. Bloom, Vice Chairperson; Glen R. Thomas; Kim Pizzingrilli; Wendell F. Holland
Creation of Fuel Cost Recovery Surcharge; S. P. 28208
Order By the Commission:
Over the past several weeks, the Commission has received written and verbal requests from passenger motor carriers, including a petition filed with the Secretary by Lehigh Valley Taxicab Co., Inc., and a written request from the Pennsylvania Taxicab and Paratransit Association (PTPA) on behalf of its 119 members, for the authorization of a fuel surcharge to offset the unanticipated increase in retail gasoline prices. The fuel surcharge would change the current rates for call or demand, paratransit and airport transfer carriers by adding an additional charge per trip for each paying passenger. Generally the requestors, including the PTPA, seek permission to temporarily increase rates, for a period of 1 year, with the possibility for an extension by the Commission.
In support of their proposals for a fuel surcharge, the motor carriers and the PTPA have provided the Commission with comparative information about the increases of retail prices of gasoline. The most comprehensive information was provided by the PTPA. The PTPA compared the average fuel cost of a trip during 2002 with the average fuel cost of a trip in 2004. The PTPA surveyed its members representing over 1,000 vehicles to support its analysis. The PTPA also provided statistics from its National organization: Taxicab, Limousine and Paratransit Association. The average fuel cost of a trip for call or demand carriers was calculated by dividing 6.8 miles (the average trip length for cabs as determined by the survey) by 11.5 (the average miles per gallon per cabas determined by the survey). The results were multiplied by $2 (the average cost of regular gas in 2004 according to the PTPA).
Cost Per Trip Basis--Call and Demand
Average Cost of
Fuel 2002Average Cost of
Fuel 2004Average Cost per
Trip 2002Average Cost
PER Trip 2004Difference in
Cost per Trip$1.40 $2.00 $0.828 $1.183 $0.355
Cost Per Mile Basis--Call and Demand
Average Cost of
Fuel 2002Average Cost of
Fuel 2004Average Cost per
Mile 2002Average Cost
per Mile 2004Difference in
Cost per Mile$1.40 $2.00 $0.122 $0.174 $0.052 The same calculations and analysis were done for paratransit and airport transfer carriers. The average fuel cost of a trip was calculated by dividing 13.61 (the average trip length for paratransit and airport transfer vehicles as determined by the survey) by 10 (the average miles per gallon per paratransit and airport transfer vehicles as determined by the survey). The results were multiplied by $2 (the average cost of regular gas in 2004 according to the PTPA).
Cost Per Trip Basis--Paratransit and Airport Transfer
Average Cost of
Fuel 2002Average Cost of
Fuel 2004Average Cost per
Trip 2002Average Cost per
Trip 2004Difference in Cost
per Trip$1.40 $2.00 $1.905 $2.722 $0.817
Cost Per Mile Basis--Paratransit and Airport Transfer
Average Cost of
Fuel 2002Average Cost of
Fuel 2004Average Cost per
Mile 2002Average Cost per
Mile 2004Difference in Cost
per Mile$1.40 $2.00 $0.14 $0.20 $0.060
Under 66 Pa.C.S. § 1301, the Commission is required to ensure that all rates charged by a public utility are just and reasonable. In the case of common carriers, the Commission has traditionally examined the operating ratio to determine the propriety of a rate increase. We are aware of the recent surge in the retail price of fuel. To prevent financial hardships, it is imperative that call or demand, paratransit and airport transfer carriers under the jurisdiction of this Commission be afforded an opportunity to adjust rates and fares to offset unanticipated fuel expenditures.
While we recognize that the approval of the proposed surcharge may unduly benefit those carriers which have recently received rate increases, we are mindful that cost justification across all segments of the industry is not required to implement a fuel surcharge. We also need to bear in mind our obligation to address an industry-wide problem without creating a chaotic rate structure impossible to manage or police.
Based on our review, it appears that approval of a Fuel Cost Recovery is an appropriate way to address the unanticipated rise in retail gasoline prices. Its implementation will result in just and reasonable rates. We will use the average trip length information from the PTPA's survey of its members (6.8 miles for call or demand carriers and 13.61 miles for paratransit and airport transfer carriers), the average miles per gallon per vehicle provided by the PTPA from its National organization (15.04 for call or demand carriers and 13.01 for paratransit and airport transfer carriers) and the Department of Energy's report of retail on-highway gasoline prices for the Central Atlantic Region from May 31, 2002, to May 31, 2004. We concur with the PTPA's request to use the 2002 date. We note that gas costs began rising in May 2002 and continued to rise thereafter.
Cost Per Trip Basis--Call and Demand
Date Retail Gas Price Average Cost/Trip 2002 $1.35 $0.61 2004 $2.00 $0.90 *The increase in fuel prices has resulted in an increase of $0.29 (from 2002 to 2004) in the average fuel cost per trip.
Cost per Trip Basis--Paratransit/Airport Transfer
Date Retail Gas Cost Average Cost/Trip 2002 $1.35 $1.41 2004 $2.00 $2.09 *The increase in fuel prices has resulted in an increase of $0.68 (from 2002 to 2004) in the average fuel cost per trip.
Under 66 Pa.C.S. § 1308(a), we will permit call or demand, paratransit and airport transfer carriers to recover increased fuel costs. We are hereby authorizing a fuel surcharge of $0.30 per trip for call or demand carriers and a fuel surcharge of $0.70 per trip for paratransit and airport transfer carriers.
This Order requires that the fuel surcharge for call or demand carriers of First Class Cities be mandatory. 66 Pa.C.S. § 2410(b) requires that all call or demand carriers in First Class Cities charge a uniform rate as determined by the Commission. The institution of a fuel surcharge for all other call or demand carriers, paratransit carriers and airport transfer carriers under the Commission's jurisdiction shall be permissive.
We will permit the fuel surcharge to be effective on June 14, 2004. Notice to the public shall be accomplished by posting the notice in Appendix A in each vehicle operated by the carrier. The posting shall also advise that any questions regarding the fuel surcharge be directed to the Bureau of Transportation and Safety's Motor Carrier Services and Enforcement Division.
We have determined that the authorized fuel surcharge is just and reasonable for both the passenger carrier and the paying passenger. Therefore,
It Is Ordered That:
1. Call or demand carriers rendering transportation service under the jurisdiction of the Commission may establish and charge a $0.30 per trip for each paying passenger fuel surcharge under Special Permission No. 28208.
2. Call or demand motor carriers in First Class Cities rendering transportation service under the jurisdiction of the Commission are required to charge a $0.30 fuel surcharge per trip for each paying passenger under Special Permission No. 28208.
3. Paratransit carriers and airport transfer carriers rendering transportation service under the jurisdiction of the Commission may establish and charge a $0.70 per trip for each paying passenger fuel surcharge under Special Permission No. 28208.
4. The surcharge shall become effective on June 14, 2004, and shall terminate on June 12, 2005, unless changed, cancelled or extended by the Commission. The Bureau of Transportation and Safety shall investigate the merits of the fuel surcharge on a quarterly basis, beginning September 30, 2004, or as directed by the Commission.
5. That Call or Demand motor carriers shall notify the public by placing the notice in Appendix A in all vehicles, which shall read: ''The PA Public Utility Commission has authorized a fuel surcharge under Special Permission No. 28208. The surcharge of $.30 per trip for each paying passenger is effective on June 14, 2004, and shall terminate on June 12, 2005.''
6. Paratransit and airport transfer motor carriers shall notify the public by placing the notice in Appendix A in all vehicles, which shall read: ''The PA Public Utility Commission has authorized a fuel surcharge under Special Permission No. 28208. The surcharge of $.70 per trip for each paying passenger is effective on June 14, 2004, and shall terminate on June 12, 2005.''
7. That the Secretary shall duly certify this Order and deposit same with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.
8. A copy of this Order shall be served by the Secretary to each motor carrier holding call or demand authority, paratransit authority and/or airport transfer authority.
9. Copies of this Order shall be served by the Secretary to the Office of Consumer Advocate and Office of Small Business Advocate.
10. The surcharges collected are subject to refund in the event that any formal complaints are filed, within 30 days of the date of publication of this Order, and are successful in challenging the surcharge.
JAMES J. MCNULTY,
Secretary
Appendix A
CALL OR DEMAND CARRIER
FUEL SURCHARGE
$0.30 The PA Public Utility Commission has authorized a fuel surcharge under Special Permission No. 28208. The surcharge of $.30 per trip for each paying passenger is effective on June 14, 2004, and shall terminate on June 12, 2005.
Questions should be referred to the Motor Carrier Services & Enforcement Division at 717-783-5010.
__________
PARATRANSIT CARRIER AND
AIRPORT TRANSFER CARRIER
FUEL SURCHARGE
$0.70 The PA Public Utility Commission has authorized a fuel surcharge under Special Permission No. 28208. The surcharge of $.70 per trip for each paying passenger is effective on June 14, 2004, and shall terminate on June 12, 2005.
Questions should be referred to the Motor Carrier Services & Enforcement Division at 717-783-5010.
[Pa.B. Doc. No. 04-1171. Filed for public inspection June 25, 2004, 9:00 a.m.]
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