Washington Gas Light Co. is planning "imminently" to seek emergency rate increases in the District despite a recent Public Service commission order authorizing increased rates as of last weekend. WGL President Donald Hein described the latest increases as "too little and too late."
The company is expected to file an "emergency" request to increase revenues to a level already permitted under the PSC's existing profit limits in the hope that a quick decision will be made. The company does not plan to seek any controversial changes in policies or authorized return.
If this initial request is approved, WGL plans to file later a more extensive rate proposal that would require major changes as well as a time-consuming hearing process.
In response to a Washington Gas petition filed in the summer of 1977, the city's regulatory agency approved last Friday a final order to implement an overall rate boost of 8.24 percent, designed to produce additional annual revenues of $7.1 million for the Washington utility.
Washington Gas had sought a 12.56 percent increase to bring in new revenues of $11 million a year.
Discussing the D.C. rate decision in a memorandum to financial community analysts this week, WGL investor relations director Jane Roth said a new rate increase will be filed quickly. Although Roth did not estimate the total amount to be sought, she noted yesterday that the rates now are based on 1977 costs. She detailed about $3 million of differences between what was sought and approved in the recent rate case, as follows:
A major development was the PSCs' action lowering WGL's authorized return on common equity -- the amount of profits permitted on a base of stockholder investment -- to 13 percent from 13.4 percent. In addition, WGL's authorized rate of return on its total investment for D.C. service was left unchanged at 9.25 percent compared with the 9.85 percent level requested. The difference in revenues between the 9.25 percent and 9.85 percent levels is $1.14 million a year.
WGL asked fo ran "attrition allowance," in effect seeking an additional $953,000 a year (including taxes) to make up for the difference between the growth of expenses and revenues in prior years because of inflation. The PSC decided to probe this matter in a separate proceeding.
The commission denied a WGL request to defer $451,000 taxes related to construction overhead expenses. the annual revenues involved are about $1 million.
Although gas sales increased 3 percent in 1978 and 1,494 new customers were added -- the first time in six years that WGL was able to hook up new business -- there was a net loss of meters served due to attrition, to 542,365 from 544,798.
WGL, with a base of primarily residential customers, currently is in an "extremely good position" on natural gas supplies and has asked regulatory agencies in Maryland and Virginia to permit an ongoing program of adding new customers and expanding sales to different types of customers.
Overall, the program would allow about 8,100 new customers in Maryland and 4,000 in Virginia each year. Current allocations for new D.C. customers have not been committed to date. Capital expenditures for this program are estimated at $62 million over the next five years.
During 1979, WGL is planning capital outlays of $30.6 million, according to the company's annual report. Outside financing will be required this year, but there are no plans to sell additional common stock, the firm stated.