A Maryland householder writes: "The Washington Gas Light Co. recently won permission to charge me $8 a month as a 'system charge,' whether or not I use any gas.
"I think this is unfair, inasmuch as I usually spend at least a month in Florida during the winter, and during the summer months use no gas at all because I have an electric range and an electric water heater.
"Now that the warm weather is here, would it not make sense for me to ask them to shut off my gas service temporarily? I could leave it off until the heating season begins later in the year. If I save $8 a month for five months and they charge me $10 to resume service, I'll be money ahead, won't I?"
Not according to a spokesman for the Gas Company. He says the Maryland Public Service Commission has authorized a rate schedule that erases any potential saving. The charge for restoring service after a temporary disconnection is "equal to the system charge times the number of months that service has been temporarily discontinued." In other words, if a Maryland customer saves five $8 montly charges, he pays $40 to have his service restored. So it just isn't possible to beat "the system."
The gas Company's rationale for a system charge is that it covers fixed costs that ought to be shared equally by all who benefit from the "availability" of service, whether or not they make immediate use of it. These fixed costs must be paid by the company (in other words, by its customers), whether the company sells one cubic foot of gas or a billion.
The company says that the only fair way to allocate these fixed overhead costs is to divide them equally among all who benefit from them.
The $8 figure was arrived at after a private management consultant firm was hired to calculate the fixed costs and the PSC revised its figures. The costs covered things like taxes, insurance, installing and maintaining pipes, and maintaining service crews that repair leaks and ruptures.
The total number of dollars for all applicable annual costs was divided by the number of customers in each "class" of service the company provides, and this produced a yearly "system charge" for each customer. This was then divided by 12 to determine the montly system charge. (Note: In the District of Columbia, the PSC limited the system charge to nine months of the year, so presumably the final division for D.C. customers was by 9.)
One irate customer who "hates" the system charge argues that Hecht's and Woodie's and other stores also have fixed overhead charges, and that if they used the same line of reasoning as the Gas Company they would charge us $8 a month even during months we didn't buy anything from them.
However, I think most people will see the vast difference between a public utility that is the sole source of supply for an essential service sold at a regulated price, and free enterprise entrepreneurs who sell at unregulated prices in competition with other free enterprisers.
Inasmuch as the Bell System has long used a system charge without calling it that (the subscriber pays a basic monthly charge for the privilege of having a telephone, whether or not he makes or receives a single call), it appears to me that there is precedent for the concept of a system charge. I do not see it, as some of my readers have described it, as "a new way to rip off the public."
The only question in my mind is whether the amount of the charge has, in each case, been fairly determined. Were the right fixed costs included?
The average householder is in no position to answer that question. He must assume - or at least hope - that the watchdogs (hah!) on his regulatory agency did their jobs properly.
And inasmuch as regulatory agencies vary between being lax and not so lax, there is always a question as to how fair any specific system charge really is.