Washington Gas Requests Rate Increase in DC

by | Mar 8, 2016

Washington Gas – a regulated natural gas utility providing service to more than 1.1 million customers in the District of Columbia, Maryland and Virginia – filed an application (Docket No. FC1137) on February 26 with the Public Service Commission of the District of Columbia (DCPSC) to increase its base rates for natural gas service, generating $17.4 million in additional annual revenue. The typical residential heating customer would see a 9.6 percent gas bill increase or, on average, about $7.94 extra per month.

The revenue increase includes $4.5 million associated with natural gas system upgrades previously approved by the commission and currently being paid by customers through monthly surcharges.

In its filing, Washington Gas cites that “current base rates in the District of Columbia  are inadequate due to a number of factors, including growth in the company’s rate base, general inflation, increases in employee related costs and regulatory requirements, and the transfer of amounts collected through approved surcharges for accelerated pipe replacement programs to base rates.”

The filing also satisfies a settlement agreement approved by the DCPSC in 2015, which provides for the recovery through a surcharge mechanism of costs related to an accelerated pipe replacement program to upgrade the Washington Gas distribution system and enhance safety. This settlement required the company to file a new rate proposal by August 1, 2016.

“For 167 years, Washington Gas has consistently delivered on its commitment to provide natural gas safely and reliably to customers in the District of Columbia,” said Adrian Chapman, CEO of parent company WGL Holdings and Washington Gas. “The proposed rates will allow us to continue meeting this commitment while upgrading the natural gas system.”

Other elements of the application include the following requests:

  • Revenue Normalization Adjustment — Washington Gas has included a request to establish a revenue normalization adjustment (RNA) – also called weather normalization adjustment by some utilities – in its proposed rate structure. The proposed RNA would reduce fluctuations in customers’ bills resulting from extreme weather patterns. Washington Gas operates with similar normalization adjustments in its Maryland and Virginia service territories.
  • Combined Heat and Power Rate Schedule – Washington Gas has proposed a commercial framework for the delivery of natural gas for Combined Heat and Power (CHP) systems. Fueled by natural gas, highly efficient CHP systems capture vented heat during the power generation process and use this heat for space heating and cooling. CHP systems are up to 80 percent energy efficient and require less fuel to produce energy.
  • Multi-Family Development Incentives — Washington Gas has proposed an incentive program for developers of multi-family housing projects in the District of Columbia. These incentives would bring the benefits of natural gas, including lower energy bills and reduced carbon emissions, to more residents in the District of Columbia.

The company anticipates that the new rates will become effective in February 2017.

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