The U.S. Department of Energy will officially oppose Washington Gas Light Co.'s proposed surcharge on customers who significantly cut home gas consumption, arguing that it could discourage conservation and discriminate against who switch to alternative energy sources.
The proposed surcharge "does not assure the customer, the community of the country" freedom to make "choices for conservation," said David Bardin, administrator of the Economic Regulatory Administration, the arm of DOE that oversees national energy allocation and pricing.
The DOE opposition will be in the form of testimony by federal lawyers in public hearings on the proposed surcharge before utility regulatory commissions in Maryland, the District and Virginia. WGL has 545,000 gas customers in the three jurisdictions.
Federal lawyers will file papers before the Maryland commission when hearings are authorized by them. No hearing dates have yet been set.
The federal decision to enter the cases comes after Energy Secretary James R. Schlesinger said in a recent press conference that local authorities should look "rather critically" at the proposed surcharge because it may "cut against the grain of federal [energy conservation] policy."
The proposed surcharge, ranging from $7.80 to $14 a month or more, would affect customers who cut their gas consumption significantly by substituting electric heat pumps, propane or other energy sources for most of their heating needs while still using gas for the rest.
The company's rationale is that these customers continue to cost the company the same amount as ever in fixed capital expenses while cutting company revenues by buying less gas.
Bardin said in a telephone interview yesterday that while a utility's legally authorized requirements for revenues must be met by rate payers, DOE is concerned "that every customer be able to secure gas at a fair price in relation to the cost to the company [of supplying it], and that we not have any penalty or company discretion to penalize the customer who conserves natural gas by insulating his home, lowering his thermostat or by turning to solar energy, a wood stove or any of the many other choices."
A "fair and nondiscriminatory" gas rate structure, Bardin said, "will leave each customer free to make his or her choices for conservation in heating [and] cooking. . ."
"We're going to argue that that these (WGL) proposals don't meet the test of an objective, nondiscriminatory" gas rate structure, he said.