Overview
The DCPSC partially approved a rate increase for Washington Gas Light Company (WGL), that went into effect Jan. 16, 2024. The decision, made after careful consideration of several factors, addressed the need for operational expenses necessary to ensure continued reliable and safe natural gas services for customers in the District of Columbia, the need for affordable natural gas service, and the need to ensure compliance with the District’s aggressive climate goals.
The approved rate adjustment reflects the Commission’s commitment to balancing the needs of consumers with the essential requirements of maintaining robust and secure energy infrastructure. The Commission has approved a $24.6 million increase in overall revenue, which includes moving $4.7 million from a PROJECTpipes surcharge to the base rates.
However, the Commission rejected WGL’s proposed decoupling mechanism, the Climate Progress Adjustment, and WGL’s proposed Climate Action Recovery Tariff. The Commission also made several other adjustments to WGL’s proposed rate increase so that the approved rate increase is 54% less than WGL’s original proposal, a substantial savings for customers.
With the new rates in effect, the Commission estimates that the average residential heating customer’s overall bill will increase by approximately $7.63 per month, or 7.9% on a total estimated bill of $104.24.
In an effort to assist low low-income District households with their natural gas bills, the Commission also reduced the total monthly customer charge by 50% during the six non-heating months. This equates to a total annual bill credit of nearly $50 for customers eligible for the Residential Essential Service (RES) credit.
Background
WGL filed an application in April 2022 requesting to increase its existing rates and charges for natural gas service distribution in the District.
The requested rates were designed to collect approximately $226.4 million in total annual revenues, an increase in WGL’s weather-normalized annual revenues of no more than $53 million. This included a transfer of $5.3 million associated with costs from the natural gas system upgrades currently paid by customers through the PROJECTpipes monthly surcharge, resulting in a net increase of $47.7 million in new revenues.
These originally requested revenues would have resulted in an overall increase of approximately 20.4% over and above current bills. WGL contended that the request to increase base rates was because they were operating in the District with negative cash flows from operating activities and with an insufficient return to cover their financing costs.
The DCPSC Public Notice on May 13, 2022, provided a complete breakdown of the originally proposed monthly charges.
Community hearings
The DCPSC hosted community hearings to discuss WGL’s rate increase application on Feb. 7, 8, and 9, 2023, at locations across the District.
Procedural hearing
The DCPSC scheduled oral arguments on Sept. 13, 2023, to allow parties in this case to present arguments before DCPSC Commissioners regarding the issues that the parties believed were fundamental to the Commission’s decisions in this proceeding.