The three utilities serving the District of Columbia have filed for large rate increases to offset new city taxes scheduled to go into effect July 1.
The rate increases, if approved by the Public Service Commission, will add about $2 a month to the average residential gas bill, $1 to the average telephone bill and $1 to the average electric bill, representatives of the utilities said yesterday.
The filings for higher rates came about as a result of an increase in the District's tax on the receipts of the utility companies. Starting July 1, these companies will have to pay 6.7 percent of their total receipts to the District government, compared with 6 percent now.
The gross receipts tax has been considered a cost of doing business by the Public Service Commission, and in the past, the commission has permitted the utilities to pass along that cost to all customers, including governmental and nonprofit institutions that are exempt from the sales taxes the District also levies on most utility bills.
The higher levy is expected to add about $8 million to the roughly $80 million the District collects each year from the gross receipts tax on utilities.
In addition, because the District has changed the way it collects the tax, the District will collect an additional $5 million or $6 million in fiscal year 1984 (which begins Oct. 1), according to Jeffrey L. Humber, director of the Department of Finance and Revenue. The timing change permits the District to collect 15 months of the utilities tax in fiscal 1984.
At present, the utilities are required to pay most of the tax on their revenue in August, based on their receipts during the year ended the previous June. Under a law signed May 4, the utilities will be required to pay the tax each month, based on the money they collected the previous month.
The change also will permit the District to collect 15 months' worth of the taxes during the 12 month period that begins Oct. 1. Humber said the change in the collection schedule is an attempt to align better the District's revenues with its disbursements.
As a result of the change in the way they must pay the taxes, the utilities will be faced with a one-time double-whammy for the tax year that begins July 1. Not only must they pay a 6 percent tax in August based on their receipts for the year ended June 30, but also they must begin to pay the new 6.7 percent tax that takes effect July 1.
The District has given the utilities a reprieve for the first six months. The 6.7 percent tax they owe for the six months from July through December will not be due until August 1984. But they must begin to pay the city monthly beginning in February 1984, taxed on their revenues for January 1984.
The three utilities have asked for two different rate increases. One will cover the 6 percent payment due in August this year. The other is designed to cover the increase from 6 to 6.7 percent that takes effect July 1, taking into account that the utilities do not have to begin monthly payments immediately.
Potomac Electric Power Co. has asked for a surcharge of about 0.12 cents for each kilowatt hour used to cover the August tax payment and a 0.5748 percent surcharge on electric bills to cover the tax hike. A Pepco spokesman said the company wants to spread the cost of the August payment over five years to reduce the impact on its customers. The Pepco spokesman said the average residential customer uses 6,338 kilowatt hours each year and pays $380.19. The average Pepco customer would pay about $10 a year more under its proposal.
Washington Gas Light Co. said it already has the authority to pass along the increase in the tax rate, but will request an increase of 1.04 cents per therm of gas to cover the one-year double taxation. The effect of the pass-along and the proposed surcharge will add about 2 cents per therm, or roughly $26 a year to the average household's bill, a spokesman said.
A spokesman for the Chesapeake and Potomac Telephone Co. said the company has asked for a surcharge of 7.22 percent on the local portion of the telephone bill, which will add slightly less than $1 to most monthly bills.