NOTICES
PENNSYLVANIA PUBLIC UTILITY COMMISSION
Creation of Fuel Cost Recovery Surcharge; S. P. 28209
[36 Pa.B. 3063]
[Saturday, June 17, 2006]Public Meeting held
June 1, 2006Commissioners Present: Wendell F. Holland, Chairperson; James H. Cawley, Vice Chairperson; Bill Shane; Kim Pizzingrilli; Terrance J. Fitzpatrick
Order By the Commission:
This matter comes before the Commission on a letter filed May 15, 2006 by the Pennsylvania Taxicab and Paratransit Association (PTPA) on behalf of its members, in which PTPA petitioned for the implementation of a new fuel cost recovery surcharge. PTPA expressed the concern of its members that the industry will experience negative economic stress upon expiration of the current fuel cost recovery surcharge at Special Provision 28208 on June 12, 2006.
The Pennsylvania Public Utility Commission (Commission) by its Fuel Cost Recovery Surcharge Order at Special Permission Number 28208, adopted June 10, 2004, authorized call or demand, paratransit and airport transfer carriers under the jurisdiction of this Commission to adjust rates and fares to offset unanticipated fuel expenditures. At its Public Meeting of June 2, 2005 the Commission approved an extension of the temporary fuel surcharge until June 12, 2006. The Commission also required the Bureau of Transportation and Safety to investigate the merits of the fuel surcharge on a quarterly basis.
In its letter, PTPA conveys its members' desire that the Commission continue to provide relief in the form of a surcharge; however, it has recommended a surcharge utilizing a method different to that of the current surcharge. PTPA suggests that the Commission, on the third Friday of every month, determine the average cost of gasoline in Pennsylvania and post that cost on the Commission's website. After the average cost has been determined, the carriers would refer to a chart of surcharge values corresponding with the cost. With PTPA's letter were four charts recommended for use by the Commission. The charts allow for carriers to charge by mileage or by trip and differentiate between trips of less than 10 miles and greater than 10 miles for taxis, and trips less than 15 miles and greater than 15 miles for paratransit and airport transfer.
PTPA's request was reviewed and evaluated by the Staff of the Bureau of Transportation and Safety (BTS) at which time it was determined that the explanation of the methodology used for calculating the values in the charts was minimal and that the explanation of the reason for greater compensation for trips over 15 miles was insufficient. Furthermore, BTS was concerned that all taxicabs utilizing meters would not be able to adjust the meters in increments of less than one cent for the purpose of basing the surcharge on mileage.
In a telephone call on May 17, 2006, Jerry Campolongo, PTPA's president, was informed of the need for additional information. On May 22, 2006, the Commission received a letter dated May 19, 2006 in which the concerns about meters were addressed and an explanation of calculations for the proposed surcharge was provided; however, the subsequent information did not address the concerns of BTS regarding differences between trips over and under 15 miles.
Neither in the initial letter nor in the letter which followed, has PTPA presented substantial evidence for the need of a change in the methodology used to determine a surcharge. However, this will not prevent the Commission from considering the merits of the request.
The Commission recognizes that the cost of gasoline continues to fluctuate dramatically, and that providers of transportation services frequently experience financial difficulties when large increases occur in a relatively short time span. Data supplied by the Energy Information Administration of the Department of Energy indicates that several factors continue to contribute to the instability of gasoline prices. These factors weigh heavily in favor of continuing to grant relief in the form of a surcharge.
Rather than continue the current surcharge at Special Provision 28208, the Commission believes there is some merit in PTPA's suggestions. On the third Friday of each month, the Commission will determine the average cost of unleaded regular gasoline in Pennsylvania which will be posted on the Fuel Surcharge page of its website located at www.puc.state.pa.us/transport/motor/fuel_surcharge. aspx. In addition to the posted price, there will be a chart identical to the one below.
Carriers implementing the fuel surcharge will refer to the chart and locate the appropriate surcharge amount corresponding to the average cost of gasoline which has been posted. For example, if the posted average price of gasoline is $2.85, one would look at the chart and find the ninth line of the chart where the price range is $2.80 to $2.89. One would then go across to the appropriate column for the surcharge, which in this case would be $.65 for taxicabs and $1.50 for paratransit or airport transfer.
By establishing gasoline prices which will ''trigger'' a change in the surcharge, there would no longer be a necessity for us to review the surcharge on a quarterly or monthly basis, as was the case following Hurricane Katrina.
Determination of the amounts to be charged is based on the cost of gasoline per trip. The constants used for calculations are those used in the current surcharge: The average trip length of 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 of 15.04 for call or demand carriers and 13.01 for paratransit and airport transfer carriers; and $1.35 per gallon of unleaded regular gasoline (the average cost in 2002 according to Energy Information Administration of the Department of Energy). The cost per trip is calculated by multiplying the price of gasoline by the ratio of miles per trip to miles per gallon. The cost per trip at $1.35 per gallon would serve as the base line. The results are tabulated in the chart below.
Passenger Carrier Fuel Surcharge Chart
Fuel ($/Gal) Taxicabs* Paratransit/
Airport Transfer*$2.00--$2.09 $.25 $.70 $2.10--$2.19 $.30 $.80 $2.20--$2.29 $.35 $.90 $2.30--$2.39 $.40 $1.00 $2.40--$2.49 $.45 $1.10 $2.50--$2.59 $.50 $1.20 $2.60--$2.69 $.55 $1.30 $2.70--$2.79 $.60 $1.40 $2.80--$2.89 $.65 $1.50 $2.90--$2.99 $.70 $1.60 $3.00--$3.09 $.75 $1.70 $3.10--$3.19 $.80 $1.80 $3.20--$3.29 $.85 $1.95 $3.30--$3.39 $.90 $2.05 $3.40--$3.49 $.95 $2.15 $3.50--$3.59 $1.00 $2.25 $3.60--$3.69 $1.05 $2.35 $3.70--$3.79 $1.10 $2.45 $3.80--$3.89 $1.15 $2.55 $3.90--$3.99 $1.20 $2.65 $4.00--$4.09 $1.25 $2.75 *The amount is per paying passenger per trip. Effective Friday, June 23, 2006, the average price of unleaded regular gasoline will be posted on our website and carriers collecting the surcharge will use the amount corresponding to the above chart effective July 1, 2006. In order to provide relief without interruption, the current surcharge will be extended until midnight of June 30, 2006.
Based on our review, it appears that an extension of the Fuel Cost Recovery is an appropriate way to address the high costs of gasoline prices at the present time. However, the industry should not continue to rely on this measure as a means of relief. Therefore, members of the industry will have the responsibility of taking appropriate measures. Carriers are also advised that should circumstances require an extension of this surcharge, the base price of $1.35 currently being used will be eliminated and a higher base price established which will accurately reflect historic prices.
After due consideration, we have determined that fuel costs will not decrease. Based upon the evidence available, we are of the opinion that the passenger motor carrier industry continues to have a need for a Fuel Cost Recovery Surcharge to permit the recovery of fuel expenditures; Therefore,
It Is Ordered That:
1. Call or demand, paratransit, and airport transfer carriers rendering transportation service under the jurisdiction of the PA Public Utility Commission may establish and charge a fuel surcharge under Special Permission No. 28209.
2. Effective Friday, June 23, 2006, and on the third Friday of every month, the Commission shall post on its website at www.puc.state.pa.us/transport/motor/fuel_ surcharge.aspx the average cost of unleaded regular gasoline upon which the surcharge will be determined.
3. The surcharge shall become effective on July 1, 2006, and shall terminate on June 30, 2007, unless changed, cancelled or extended by the Commission.
4. Call or demand, paratransit, and airport transfer carriers rendering transportation service under the jurisdiction of the PA Public Utility Commission shall notify the public by placing the notice in all vehicles, which shall read: ''The PA Public Utility Commission has authorized a fuel surcharge under Special Permission No. 28209. The surcharge is effective on July 1, 2006, and shall terminate on June 30, 2007. The current surcharge is (insert current charge here) per trip for each paying passenger.''
5. The Fuel Cost Recovery Surcharge established at Special Permission No. 28208 be continued until midnight, June 30, 2006, at which time it will expire.
6. Call or demand carriers rendering transportation service under the jurisdiction of the PA Public Utility Commission may continue to charge $.60 per trip for each paying passenger until midnight, June 30, 2006.
7. Paratransit carriers and airport transfer carriers rendering transportation service under the jurisdiction of the PA Public Utility Commission may continue to charge $1.35 per trip for each paying passenger until midnight, June 30, 2006.
8. The Secretary of this Commission shall duly certify this order and deposit same with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.
JAMES J. MCNULTY,
Secretary
[Pa.B. Doc. No. 06-1146. Filed for public inspection June 16, 2006, 9:00 a.m.]
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