The Maryland Public Service Commission approved yesterday a $3.6 million rate increase for the Washington Gas Light Co.'s Maryland customers that will raise the bill of the average residential heating customer by 97 cents a month.
The company said the 2.4 percent increase, which will go into effect Sunday will mean that the average customer who heats his home with gas will pay $40.60 a month. The bill of the average customer who does not heat his home with gas will go up 29 cents, from $12.09 to $12.38 a month.
WGL's last Maryland rate increase, of $2.8 million, was granted by the commission about a year ago. The company, which has 228,000 customers in Maryland, has received increases totaling $31.1 million in five rate cases during the past five years.
This increase and the last one were granted under a new "make whole" provision in the law under which the company seeks to earn its authorized rate of return on investment without seeking to raise that percentage of return or to alter any accounting rules.
The authorized rate of return, approved by the commission in 1976, is 9.25 percent. The company is allowed to earn that much money to pay the interest on capital funds it needs and the dividends on its preferred and common stocks.
The commission granted yesterday the full amount the company had requested. By filing under the "make whole" provision, the company avoided the complexities of a major rate increase case, and the commission had only 90 days in which to make a decision.
Edmund Smallwood, WGL's vice president for rates and regulatory affairs, said the increase is needed to pay for "overall inflation. Each year our costs continue to go up, our labor rates go up.... We had an FICA (Social Security) tax increase.... Materials and supplies cost more."
The cost of gas itself, which also is going up, is not included in these inflation calculations because it is automatically passed through to customers in the special "purchased gas adjustment" portion of monthly bills, Smallwood said.
Maryland People's Counsel Jack Keane said, "The evidence in the case was that expenses went up faster than revenues." Keane, who officially represents consumers in utility rate cases, said he was satisfied that the increase was justified because, "The company calculated the thing right."
In October of last year Virginia's State Corporation Commission approved an 8.2 percent increase for WGL's 167,000 customers in the state. The company has a rate increase request of 12.6 percent pending in the District of Columbia, where it has 150,000 customers.