Washington Gas Light Co.'s request for a $17.4-million-a-year increase in the District of Columbia should be trimmed to $5.3 million, D.C. People's Counsel Brian Lederer recommended yesterday.
Lederer, who represents the public in utility matters, said Washington Gas is making good profits on natural gas sales in the District and doesn't need much more money.
The company could improve its earnings without raising rates if it tried harder to sell more gas to customers who now use other fuels, the people's counsel said.
Lederer and Washington Gas made their cases for and against raising gas rates in briefs filed yesterday with the Public Service Commission.
The increase requests by the gas company would boost the average monthly bill by about 18 percent. The typical monthly bill for a home heated with gas would increase by $8.74 to $52.59 from the present $43.85, average over the year.
Residential gas customers who use the fuel only for cooking or heating water would pay an average of $4.91 more a month, or $19.02 instead of $15.01.
Washington Gas told the PSC it needs to raise rates because "shareholders lost money on District of Columbia operations in three of the past six years."
The company said unless rates are raised, it will earn a profit amounting to only 2.6 percent of its investment in the District this year. Washington Gas contends it ought to make about a 10.5 percent return on its investment.
The rate increase requested is "modest, if not frugal," considering the company's poor profits, Washington Gas lawyers argued in their briefs.
The company said its credit rating has been downgraded, and because of its "poor financial track record," it has been unable to regain an A rating.
Lederer contended one of Washington Gas' main problems is that it loses money with its outside subsidiaries. The company owns two small gas companies in Winchester, Va., and Frederick, Md., and Davenport Insulation Co. in Washington.
The subsidiaries lost $1.7 million last year, the people's counsel contended and argued that it is "unfair to require D.C. rate payers to subsidize the losing subsidiary operations."
Lederer said Washington Gas' past problems stemmed from shortages of gas which limited the company's potential sales. The gas shortages are over, but Washington Gas hasn't gone after additional business aggressively, he added.
Washington Gas applied for the rate increase last June. The Public Service Commission hasn't set a date for deciding the case.