Washington Gas Light Co. asked the D.C. Public Service Commission yesterday to allow it to increase by 13.23 percent--or $26 million annually--its Washington customers' bills.
"We don't like to ask for a 13.2 percent increase in rates, but we feel we have to do it," said Richard Vierbuchen, executive vice president of WGL. Gas company officials said higher interest and labor expenses and increased competition for investors forced it to seek the large increase.
The proposed increase would add $12.39 to the average monthly bill of $77.09 for a D.C. heating customer using 1,376 therms of gas annually. For a residential customer who does not heat with gas, the increase would average $6.92.
Around the area, new rate increase requests have followed closely on the heels of rate increases recently granted in a pattern of rapid escalation in utility costs. WGL was awarded an $8.1 million (5.1 percent) increase two months ago, and Pepco, which was granted a $23.3 million increase in D.C. at the end of December, filed less than three months later for $81.1 million more.
Utility officials say that their increases generally have lagged behind the rise in the rate of inflation and portray themselves as playing an endless game of catch-up. The recently granted rate increase for WGL in D.C. came more than nine months after the request was made, and action on the two previous requests took 14 and 19 months, Vierbuchen said.
The most recent increase "was based on a 1980 test period, but the rates didn't go into effect till 1982," he said. By the time rates go into effect, they are outdated, he maintained. One reason for the size of the new request is to cover anticipated costs in 1983, when the company expects it to go into effect, he said.
D.C. People's Counsel Brian Lederer disagrees with that assertion. "Nobody sets rates on figures not representative of the future," he said. The last request "was tried knowing the rates would be in effect in 1982," and the amount granted includes allowances for current costs, he said. "These are not stale rates."
Instead, Lederer said, "They're putting out arguments to cover what is a fundamentally unsound construction program." According to Lederer, the gas company's construction budget is $65 million a year--or approximately 16 percent of the company's total capitalization, compared with gross sales, that he said amount to less than 6 percent of the capitalization.
"Management of this company is relying on a policy of deficit financing through rate increases," he said. Lederer said that the company should emphasize incorporating conservation rather than construction into its planning and should give more recognition to the contributions of its nonutility subsidiaries such as its oil and gas exploration subsidiaries.
WGL management said earlier this week that the compnay will ask for increases in Maryland and Virginia as well as in the District. Pepco has a $95.5 million rate request pending in Maryland, where a decision is expected this month, and a $3.2 million request pending in Virginia, as well as the $81 million request in the District. Vepco last month asked for a $96 million increase in Virginia, which is expected to go into effect on May 1.