The Pennsylvania Public Utility Commission approved the energy-efficiency plans for PPL Electric Utilities Corp., Duquesne Light Co. and FirstEnergy’s affiliates, rejecting an effort by UGI Utilities Inc. to modify the plans to boost natural gas use.

The PUC required Duquesne, PPL and FirstEnergy operating companies Metropolitan Edison Co., Pennsylvania Electric Co., Pennsylvania Power Co. and West Penn Power Co. to modify their tariffs for recovering the costs of their “Phase II” efficiency programs.

The energy-efficiency requirements are a result of a 2008 law that required electric distribution companies with at least 100,000 customers to reduce electric consumption by at least 3% percent of expected consumption by May 31, 2013 (Phase I). The PUC’s Phase II implementation order, issued in August, requires EDCs to reduce consumption by between 1.6% (West Penn Power) and 2.9% (PECO Energy).

FirstEnergy estimated the programs will save about 1.1 million MWh (2% of expected load) by 2016 at a cost of about $234 million. PPL estimated it will spend $184.5 million to meet its savings target of 821,072 MWh (2.1%). Duquesne projects costs of $58.6 million and savings of 332,066 MWh (2.4%)

The FirstEnergy plans were the result of a settlement with the Pennsylvania Consumer Advocate, industrial and commercial consumers and several civic groups that had intervened in the case. The only intervenor that did not sign the settlement was UGI, which proposed fuel switching alternatives that it said would increase electricity savings by 17%.

UGI asked the PUC to prohibit incentives that encouraged switching from natural gas to electricity and to include incentives for efficient gas-fired water heaters and furnaces. FirstEnergy said UGI’s projected 17% savings were not credible and that the company’s intervention was an attempt to boost its own gas sales. FE said only 6% to 28% of its customers have access to natural gas.

The PUC ruled that “UGI’s testimony exaggerated the savings potential” of its proposals and that it failed to support its claim that the companies’ plans will increase electric load at the expense of natural gas. Regulators also rejected UGI’s attempt to modify PPL’s plans.

The PUC ordered FirstEnergy to revise its proposed tariff within 60 days to change the reconciliation dates and add details on how it plans to allocate program costs among customer classes. The regulators gave the intervenors five days to withdraw from the settlement if they object to the ruling. Acting Consumer Advocate Tanya McCloskey told PJM Insider that there was nothing in the order to make her office withdraw from the settlement.

PPL and Duquesne also were required to file modified tariffs. PPL also was required to modify its plans for low-income customers.

Commissioner James H. Cawley expressed concern in a statement that FirstEnergy might miss its targets because its plans rely more heavily than other EDCs on free energy kits including compact fluorescent bulbs that consumers may not use. “On a policy level, giving away entirely free products, or relying heavily on short term behavioral measures, may not be the most optimal means of promoting a sustainable energy efficiency economy,” Cawley said.