The Pennsylvania Public Utility Commission (PUC) is responsible for balancing the interests of public utilities and customers. The state agency reviews — and approves, rejects or modifies — requests for rate increases by gas companies, water companies and telecommunication companies. Most people know that the PUC approves rate increases from suppliers of electricity and natural gas, but the agency also is responsible for regulation of taxis, natural gas transmission pipelines, moving companies, rail safety, and Act 13 (Marcellus gas impact fee).

On Tuesday, July 23, the PUC will be holding a public hearing at 6 p.m. in the Butler County Government Center. The purpose of the meeting is to hear public comments regarding the natural gas price increase requested by Peoples TWP, the company that absorbed T.W. Phillips Gas and Oil Company.

Peoples TWP customers received a notice of the rate increase request some weeks ago, but most people pay little attention to letters in a utility bill envelope. But in this case, the letter was worth paying attention to — the company is proposing a 28.4 percent increase for residential customers and a 5.4 percent increase for commercial and industrial customers.

Most people, particularly those living on fixed incomes, will feel the impact of that kind of an increase in their gas bill.

A letter to the editor last month raised questions about the Peoples TWP rate hike request. The letter writer noted that the company increased rates in 2010 and since that time inflation has remained at low levels of 1 or 2 percent a year. The letter asked how can a 28 percent increase be justified?

The company claims the additional money is needed to replace aging steel gas lines. There is little doubt that this part of the country has many miles of old cast iron or steel pipe that should be replaced for safety reasons. Most companies would see that as routine maintenance and build it into pricing and profit models.

The letter writer noted that the company is targeting a return on equity of 11.25 percent while most investors today are happy with half that return.

Another obvious question would focus on the dramatic difference for proposed price increases targeting residential customers versus commercial accounts. Why should homeowners be hit with a 28 percent increase while big businesses see their price for gas go up just 5 percent?

The PUC’s representatives should be able to answer some of these questions, but possibly not all. But it’s the PUC’s responsibility to listen to the public and also to investigate the company’s rate increase request to ensure that it’s warranted. Granted, an accelerated program of replacing old steel pipe might require some additional revenue, but PUC financial analysts should carefully review the company’s financial projections.

Another factor that’s hard to ignore is that Peoples TWP are not the same local gas utilities that come to mind when thinking about Peoples Gas Co. and TW Philips Gas and Oil Co. Both companies are now owned by a national infrastructure investment partnership based in California. SteelRiver Infrastructure Partners invests in natural gas distribution, railroad companies and port operations across the country. As an investment portfolio, it’s possible the pressure for increased profits at Steel River is more intense than it was when the companies were local utility companies serving a regional market that was also home to company owners and managers.

A spokeswoman for the PUC said that Peoples TWP is still a regulated utility subject to the same regulation as all others under PUC review. As a Wall Street-type investment partnership, Steel River’s priority is maximizing shareholder return; the PUC will have to step up to represent the interests of customers.

A good showing Tuesday evening of people questioning the proposed rate increases will send a signal to the PUC that Butler County is paying attention and doesn’t want unwarranted rate increases.