The Washington Gas Light Co. is having difficulty setting up the computer that would catch customers who drastically cut gas consumption by installing electric heat pumps, a WGL officer testified here today.
The company wants to catch these customers so it can charge them more under a new rate schedule for which it has applied. The surcharge is under consideration by the Public Service Commission here and by utility regulatory agencies in Virginia and the District of Columbia.
It is not easy to program a computer to do this, according to WGL vice president Edmund W. Smallwood's testimony in the case here today. He said the computer may not be able to detect heat pump use by checking the monthly meter reading.
WGL's proposed surcharge has been attacked by consumer groups, the heat pump industry the Potomac Electric Power Company and the U.S. Department of Energy. DOE's position is that the surcharge would discourage conservation and discriminate against customers who experiment with energy saving.
An electric heat pump is essentially an air-conditioner that can also work in reverse -- squeezing heat out of the outside air even during cold weather and pumping it into the house. Below 30 degrees Fahrenheit, however, the heat pump does not work effeciently.
The proposed surcharge is aimed at people who want to use heat pumps when they are efficient, at temperatures above 30 degrees, then switch to gas at colder temperatures.
Smallwood said WGL's computer needs frequent readings to trace the unique patterns of use created when customers use heat pumps in conjunction with gas.
Since the company reads meters only every other month at most, the bills are "smoothed out" and tend not to show the unique pattern.
Today's testimony was the company's first in its efforts to impose the surcharge. WGL must "catch" customers who install a dual system of heat pump plus gas because it is not expected that they will report themselves to the company and incur the higher rate.
WGL argues that this "standby" use of gas represents no overall energy saving although it may result in a cost saving to consumers because of the way gas rates are structured.
The surcharge applies only to space heating. It does not affect the use of gas for cooking or hot water heating.
It is not known how many -- if any -- customers already have installed such dual systems, Smallwood testified.
It is the threat of a large scale changeover to dual systems that worries WGL, Smallwood said during a break in the hearing.
Smallwood complained that the media has failed to accurately report the company's position, which he said seeks to protect all customers by imposing the surcharge only on those who switch to dual systems and thus increase the company's costs.
Dual systems increase costs because it is more expensive to provide gas at temperatures under 30 degrees, Smallwood said. The way rates now are structured, customers pay these high expenses for cold weather gas over the entire year, a little bit each month.
Thus, rates are "smoothed out" and customers are spared huge winter bills, Smallwood said.
If someone is allowed to use the cold weather gas at the low winter rates without using gas all year, when the costs of the cold weather gas are being recovered, that would be unfair to regular customers, Smallwood said.
He said that more affluent customers are more likely to switch to dual systems because of the high initial cost. "The poor people end up subsidizing the well-to-do" he said.
Smallwood said the heat pump industry had planned to sell at least 75,000 heat pumps a year in the Washington area. He said that if half of them were installed in tandem with gas, it would cost the company $3.5 million annually in lost revenue -- a cost that WGL would have to pass on to its customers at about $6.50 a year per customer.
The proposed surcharge would be $8 a month for a residential customer in Maryland and about twice that for a commercial customer. The surcharges proposed for Virginia and the District of Columbia are of similar amounts.