The D.C. Public Service Commission halved the natural gas rate increase sought by Washington Gas Light Co. yesterday and authorized the company to raise its rates by slightly less than 6 percent rather than the 11 percent it had asked for.
Instead of the $16.9 million increase the gas company wanted, D.C. customers will have to pay only $8.8 million more, the commission decided.
Gas bills probably will go up substantially more than that this year, however, because the gradual lifting of federal controls on natural gas prices is steadily pushing up the wholesale price of the fuel, which is passed on automatically to customers.
Last year, the gas company got a 9.3 percent rate increase, but actual gas bills jumped 18 percent because of decontrol.
The Reagan administration is considering speeding up the decontrol timetable. If that happens, gas bills could soar.
The 47 percent cut in the Washington Gas Light request was the biggest slice the commission has ever taken out of the rate increase sought by any utility, said Elizabeth Noel, deputy D.C. people's counsel.
The consumer advocate called the ruling "a victory for consumers and a warning to all the utilities not to impose unnecessary rate increases on District of Columbia rate payers."
Just how the PSC decision will affect monthly gas bills was unclear.
The Public Service Commission calculated that the decision would mean a $74-a-year increase in the average bill for residential customers with gas heating and a $26-a-year rise for customers who use gas only for cooking and heating water.
But WGL spokesman Paul Young said the increase would not be that big. The way the gas company figures it, residential heating customers who now pay an average of $870 a year will pay about $48 more; nonheating customers, whose bills average $308 a year, will pay $21 more.
Young said it appeared the PSC had based its estimates on what customers were paying at the time the rate request was submitted last April. Since then, gas bills have gone up because of increases in wholesale gas prices that are passed on automatically. As a result, the increase over what customers have paid in the past 12 months will be smaller than the PSC calculated, he said.
Washington Gas Light President Donald Heim acknowleged the gas company was surprised that its rate request was cut almost in half. "We may appeal the decision, we may ask for reconsideration," he said.
Heim and other WGL executives attending the PSC hearing at which the decision was announced said it was unclear to them why the commission had cut the rate request so much.
"We thought we would be getting $11 million or $12 million," one company official said.
During the 10-month PSC review of the gas company's request, the Office of People's Counsel argued that the increase ought to be cut because Washington Gas is beginning to earn large profits from gas wells it has drilled in Oklahoma.
The company contends the success of the wildcat wells should have no effect on local bills because the wells were financed by stockholders, not by local gas customers.
Deputy People's Counsel Noel said the commission had in effect told Washington Gas, "You are a financially healthy company; do not ask us for unnecessary rate increases."
Washington Gas customers will pay record bills for the month of January because the severe weather pushed gas consumption to new highs, Young said. Total gas consumption for the month and how much it will cost customers is not yet known.
On extremely cold days, WGL customers burn more gas than the company's regular sources can supply. To meet the peak demand, the company must buy gas from other suppliers at much higher prices.
Despite yesterday's slash in the Washington Gas rate increase request, D.C. gas bills will continue to increase, Young said. Wholesale gas prices have been going up at a rate of about 4 percent a year plus the cost of inflation. Last year's 10.3 percent inflation rate would mean a 14 percent rise in wholesale gas prices this year.