Washington Gas Light Co. has agreed to drastically scale back proposed rate increases for its D.C. consumers, walking away from a yearlong case with next to nothing, under a settlement agreement reached last week with the District government and other parties.
The 8.1 percent rate increase that Washington Gas sought for its residential customers has been slashed to less than 1 percent, according to details of the deal released by the D.C. Public Service Commission, the District’s utility regulator. The proposed 5.1 percent increase for commercial gas clients is now 1.7 percent.
The initial rate increase application filed in November 2006 would have garnered the company $20 million more a year. Now, it’s looking at a token $1.4 million divided among its 151,000 natural-gas customers, minus the $1.3 million it cost to litigate the case.
“The settlement’s about as close to ‘We never should have filed this damn case; now let’s get the hell out of here’ as you can get,” said People’s Counsel Elizabeth Noel, who represents D.C. residents in utility matters.
Washington Gas initially claimed that its existing rates “donot provide … an opportunity to earn a reasonable rate of return in the District of Columbia.” In June, the company signed an outsourcing deal with Accenture that is expected to save the company $170 million during the next 10 years. It also cost more than 150 local customer-service employees their jobs. The rate case was delayed by four months — and Washington Gas was fined $350,000 — when the company refused to turn over documents tied to the Accenture deal.
The settlement was reached Friday between Washington Gas, the D.C. Office of the Attorney General, the Apartment and Office Building Association and the Federal Executive Agencies.
The deal is the subject of a hearing today before the commission. Washington Gas hopes to have the increases in place by Dec. 31. The agreement, the parties state, is “in the public interest and is a just and reasonable accommodation and balancing of the interests of Washington Gas’s shareholders and the ratepayers of the District of Columbia.”
Washington Gas also agreed not to seek another price increase until 2011, and it abandoned plans to implement a performance-based rate system. Company spokesman Eric Grant declined comment.
