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PA Bulletin, Doc. No. 08-1308



Extension of the Fuel Cost Recovery Surcharge

[38 Pa.B. 3881]
[Saturday, July 12, 2008]


   Public Meeting held
June 24, 2008

Commissioners Present:  Wendell F. Holland, Chairperson; James H. Cawley, Vice-Chairperson; Tyrone J. Christy; Kim Pizzingrilli

Extension of the Fuel Cost
Recovery Surcharge; S.P. 28209


By the Commission:

   The Pennsylvania Public Utility Commission (Commission) by its Fuel Cost Recovery Surcharge Order at Special Permission Number 28209, ratified June 1, 2006, authorized call or demand, paratransit and airport transfer carriers under the jurisdiction of this Commission to adjust rates and fares to offset significant increases in the cost of fuel. The fuel surcharge became effective on July 1, 2006, and was extended on June 21, 2007. It is currently scheduled to terminate on June 30, 2008.

   In a letter dated May 1, 2008, the Pennsylvania Taxicab and Paratransit Association (PTPA), on behalf of its members, has requested that this Commission extend the fuel cost recovery surcharge for a period of 1 year. PTPA cites the ongoing instability of retail gasoline prices as the reason for this request.

   Initially, all call or demand, paratransit and airport transfer carriers were authorized to collect the surcharge found on the Fuel Surcharge page of the Commission's web site. The average price of fuel was posted on the third Friday of each month, with the effective date of the surcharge being the first day of the subsequent month. The Commission determined the average cost of unleaded regular gasoline based upon gasoline prices in the index of the Energy Information Administration of the United States Department of Energy. The amount of the fuel surcharge was determined by locating the average price of gasoline on a chart, also displayed on that page, and selecting the corresponding fuel surcharge in the column for the respective type of transportation.

   Determination of the amounts to be charged was based on the cost of gasoline per trip. The constants used for calculations were those based upon statistics from the Taxicab, Limousine and Paratransit Association: 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 was 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 as follows.


$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
$4.10--$4.19 $1.30 $2.85
$4.20--$4.29 $1.35 $2.95
$4.30--$4.39 $1.40 $3.05
$4.40--$4.49 $1.45 $3.15
$4.50--$4.59 $1.50 $3.25
$4.60--$4.69 $1.55 $3.35
$4.70--$4.79 $1.60 $3.45
$4.80--$4.89 $1.65 $3.55
$4.90--$4.99 $1.70 $3.65
$5.00--$5.09 $1.75 $3.75
$5.10--$5.19 $1.80 $3.85
$5.20--$5.29 $1.85 $3.95
$5.30--$5.39 $1.90 $4.05
$5.40--$5.49 $1.95 $4.15
$5.50--$5.59 $2.00 $4.25
$5.60--$5.69 $2.05 $4.35
$5.70--$5.79 $2.10 $4.45
$5.80--$5.89 $2.15 $4.55
$5.90--$5.99 $2.20 $4.65
$6.00--$6.09 $2.25 $4.75
$6.10--$6.19 $2.30 $4.85
$6.20--$6.29 $2.35 $4.95
$6.30--$6.39 $2.40 $5.05
$6.40--$6.49 $2.45 $5.15
$6.50--$6.59 $2.50 $5.25
$6.60--$6.69 $2.55 $5.35
$6.70--$6.79 $2.60 $5.45
$6.80--$6.89 $2.65 $5.55
$6.90--$6.99 $2.70 $5.65
$7.00--$7.09 $2.75 $5.75

* The amount is per trip.
** The amount is per paying passenger per trip.

   The Commission's intention was to create flexibility for both the carriers and the Commission. By establishing gasoline prices which would ''trigger'' a change in the surcharge, it would no longer be necessary to monitor the surcharge at different intervals. This flexibility would also aid in eliminating the need for emergency petitions, as was the case following Hurricane Katrina in 2005.

   In the process of considering this request, the Commission has analyzed current information available from the Energy Information Administration of the United States Department of Energy, the American Automobile Association and OPIS Energy Group. Data from these groups indicate that the retail price of gasoline will continue to increase throughout the summer months and even beyond, due to increased demand and the uncertainty of supply.

   Many refineries have failed to return from unplanned outages and maintenance. Should more unplanned outages occur, there will be a significant impact on the future path of prices. Several analysts expect to see refinery maintenance remain relatively high even into June. High import volumes also play a part in keeping supplies adequate. Additionally, there remain many trouble spots across the globe that could affect the crude oil supply, prices and gasoline prices (such as, Venezuela, Nigeria, Iran, and the like). Projections such as this indicate that the cost of gasoline will remain a problem for the transportation industry.

   Based on our review, it appears that an extension of the Fuel Cost Recovery is an appropriate way to address the high costs and instability of gasoline prices at the present time. However, the industry should not continue to rely on this measure as a means of relief. Members of the industry will have the responsibility of taking appropriate measures.

   After due consideration, we have determined that fuel costs are not likely to decrease. Based upon the evidence available, we are of the opinion that the passenger motor carrier industry continues to have a need for the Fuel Cost Recovery Surcharge to permit the recovery of fuel expenditures; Therefore,

   It is Ordered that:

   1.  The Fuel Cost Recovery Surcharge established at Special Permission No. 28209 be and is hereby extended until June 30, 2009, unless changed, cancelled or extended by the Commission.

   2.  On the third Friday of every month, the Commission shall post on its web site at the average cost of unleaded regular gasoline upon which the surcharge will be determined.

   3.  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 a notice in all vehicles, which shall read: ''The PA Public Utility Commission has authorized a fuel surcharge under Special Permission No. 28209. The surcharge has been extended and shall terminate on June 30, 2009. The current surcharge is (insert current charge here) per trip for each paying passenger''

   4.  The Fuel Cost Recovery Surcharge established at Special Permission No. 28209 be continued until midnight, June 30, 2009, at which time it will expire.

   5.  The Secretary of this Commission shall duly certify this order and deposit same with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.

By the Commission


[Pa.B. Doc. No. 08-1308. Filed for public inspection July 11, 2008, 9:00 a.m.]

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