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Washington Gas rates going down April 9

(Published April 7, 2003)


Staff Writer

Washington Gas officials have announced they will lower rates for their D.C. customers beginning April 9 to comply with an order from the Public Service Commission.

The average residential customerís bill is expected to be reduced by about $18 a year under the new rate schedule, according to a press release issued by the gas company on April 1. The estimate is based on use of about 1,000 therms of natural gas per year

The companyís commercial customers also will see their rates reduced, but an estimate of that reduction was not readily available.

The move comes in response to a final order issued March 28 by the Public Service Commission, which regulates public utilities in the District, in a case brought by the D.C. Office of the Peopleís Counsel that successfully argued the gas company was overcharging its customers.

Washington Gas asked for reconsideration of the commissionís original decision, issued last October, which ordered a $7.5 million annual reduction in the companyís revenue from ratepayers. The final order, acknowledging some miscalculations claimed by the gas company but rejecting others, ordered the company to reduce its rates by a cumulative total of $5.4 million a year.

The commissionís investigation of the "reasonableness" of the gas companyís rates, which examined whether the company was inappropriately passing through to ratepayers some of its costs from unregulated business activities, concluded that Washington Gas was earning more than its annually authorized rate of return from utility customers.

Gas company spokesman Tim Sargeant said the rate reduction will not affect the companyís decision to move forward with a new request for a rate increase, filed Feb. 7 with the commission. A pre-hearing conference in that case is scheduled for April 10, but a final decision on the request is not expected before next winter.

The Public Service Commission rejected the gas companyís request for a $16.3 million rate increase along with ordering the rate reduction last fall. Peopleís Counsel Elizabeth Noel, the city governmentís consumer advocate for utility customers, called the decision a "slam dunk for consumers."

Washington Gas had contended that the commission unfairly restricted the test period it used to determine the companyís rate of return, thereby excluding many legitimate expenses of delivering service to its nearly 150,000 natural gas customers in the District.

"The commissionís authorization of system charges over 12 months rather than nine months will send the proper price signals to customers regarding the ongoing costs of maintaining and supporting the natural gas delivery system," Washington Gas chairman and chief executive officer James H. DeGraffenreidt Jr. said in a written statement issued after the commissionís March 28 decision.

Copyright 2003, The Common Denominator