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Gas rate reduction delayed

Washington Gas seeks rehearing on refund order

(Published November 18, 2002)

By KATHRYN SINZINGER

Staff Writer

Washington Gas is seeking reconsideration of a D.C. Public Service Commission order that it refund $7.5 million to its customers through a rate reduction.

The gas companyís application for reconsideration was filed with the regulatory agency on Nov. 7, one day before the rate reduction was to go into effect. The action at least temporarily delays any rate decrease for the gas companyís 150,000 residential and commercial customers in the District of Columbia.

A spokesman for the Public Service Commission said a decision on the companyís request for rehearing will likely be made by mid-December. Under D.C. law, Washington Gas would have 60 days after the commission issues its decision on reconsideration to decide whether it will file an appeal of that decision with the D.C. Court of Appeals.

The commissionís Oct. 29 order agreed with D.C. Peopleís Counsel Elizabeth A. Noelís contention that Washington Gas has been earning more than its authorized rate of return as a regulated utility. In addition to ordering a rate reduction, estimated at 7.9 percent for households and 7.4 percent for businesses, the commission denied the gas companyís request for a $16.3 million rate increase.

In a dissenting opinion, commission member Anthony M. Rachal III expressed concern that the three-member commissionís order rejected some "appropriate" charges that should be included in the gas companyís costs of providing service, which get passed along to consumers. However, Rachal said he still favored a rate decrease, even though he disagreed with the method of calculation used in the commissionís majority decision.

In its application for reconsideration, Washington Gas alleges "calculation errors by the Commission that demonstrate the ordered revenue reduction is overstated by at least $1.4 million annually." The company also asserts that the commission failed to recognize "legitimate costs that the company is incurring to provide service to existing customers in the District," and it objects to "the Commissionís undue delay in deciding the case." Washington Gas filed its rate increase application in June 2001, about 16 months before the commission took action to deny the request.

Copyright 2002, The Common Denominator