District homeowners will pay an extra $3 a month on average to Washington Gas under an increase approved by city utility regulators.
The increase raises the average residential customer charge from $7.95 to $9.90 a month, plus a small jump in distribution charges.
The rate hike — which starts in June — was announced by the Public Service Commission in a news release but has not yet been filed as a formal order.
In the city, Washington Gas has about 127,000 residential and 8,100 commercial customers, the company said.
Washington Gas, which last received a rate increase in 2007, declined to comment on the new rate until it sees the formal order, said spokesman Ruben Rodriguez.
In announcing the decision, the PSC also scolded the company for being sluggish in replacing aging pipelines, saying such work in the District “has slowed to an unacceptable rate in the last three years.” The commission said regulators “expect” the company “to pick up its pace and continue its normal pipeline replacement.”
Yet regulators also rejected for now the details of a proposal by the company to accelerate its pipeline replacement through a program that could have included a surcharge to help cover costs.
The plan Washington Gas presented did not clarify priorities for which pipes would be replaced or have adequate risk assessments, regulators said. But they told the company to update and present the plan within the next three months — a request that leaves open the possibility customers could face a surcharge or other added cost.
The revenue increase in the new rates for Washington Gas is about 29 percent of what the company sought, according to commission statements. The increase includes the costs of getting natural gas to customers, as well as expenses for company pension and other post-retirement benefits and costs tied to the company’s operations center in Springfield.
The Office of the People’s Counsel, which represents consumer interests, declined to comment on the rate decision pending the formal order, its spokesman, Phillip G. Harmon, said.
The rate case grew out of an investigation regulators opened in late 2011 when they saw Washington Gas earnings reports that led the commission to question whether the company was “overearning,” as the commission described it, and whether customers were paying too much.
The question led to a rate review and the increase — not a refund or a price cut.
The investigation gave the utility commission information it lacked, said Rick Herskovitz, an attorney for the commission. Coming into a rate review, he said, “you basically have to bear it all, so we got the good and the bad.”