RICHMOND — The State Corporation Commission (SCC) has approved a reduced rate increase request by Washington Gas Light (WGL). The SCC’s final order means customers will be receiving refunds, with interest.
WGL customers have been paying higher natural gas rates since February 13, 2007. That is when the requested increase was allowed to go into effect on as interim basis pending an SCC decision.
The SCC’s final order issued on September 19, 2007, allows WGL to collect an additional $3.9 million in annual operating revenue. The company originally sought a revenue increase of $23 million, and later lowered the request to $17.2 million.
WGL was directed to recalculate all bills issued since February 13. In cases where the application of the new rates results in a reduced bill for a customer, the company will refund the difference with interest. Refunds appear as a credit on a future monthly bill.
In addition to the revenue increase, the SCC authorized a new rate plan for the company. The rates charged to WGL customers for delivery service will be frozen for four years. The non-gas component represents approximately 35 percent of an average customer bill. The rest of the bill represents the cost of natural gas used by the consumer, which typically is adjusted quarterly to track wholesale gas prices.
The rate settlement allows WGL to implement a weather normalization adjustment mechanism and a performance-based rate plan that includes a sharing of any annual earnings that exceed an established target so that Virginia customers receive 75 percent of such earnings and the company retains 25 percent.
In its final order, the Commission directed WGL to work with the SCC staff to develop service quality standards to measure the company’s progress in continuing to maintain a safe and reliable gas distribution system, while striving to control operating costs. Among other things, these standards will include measurements designed to monitor the company’s outsourcing of several business processes.
###
Case Number PUE-2006-00059