The Neighborhood Legal Services Program has filed suit in U.S. District Court alleging that the D.C. government has overcharged more than one-fourth of its public housing tenants since 1977 by failing to adequately reduce monthly rents for those tenants who pay for their own utilities.

Public housing administrator Sidney Glee said yesterday that the lawsuit's allegations were correct.

"We have not adjusted the utility allowance," said Glee. Under federal regulations, the city government is supposed to allow tenants who pay their own gas or electric bills to deduct a certain amount from their monthly rent. But while utility costs have increased over recent years, the allowance given to tenants who pay the bills has not.

Glee said the city has not increased the allowance because it cannot afford to do so and needs a larger federal subsidy to be able to make the adjustment. The federal subsidy currently accounts for more than half the city's $35.7 million public housing budget.

"Residents are entitled to an increase in utility costs, but until we receive additional funds we can't do so," Glee said. He said he could not estimate the total amount of the overcharges, which affected about 3,000 families. The lawsuit claimed it could be as much as $360 per family.

The size of the deduction is based on the number of bedrooms in the housing unit, Glee said. For example, a tenant in a three-bedroom apartment can deduct $15 to $20 a month from the rent if he pays either the gas or electric bill, Glee said.

The suit alleges that since the allowance levels were set in 1976, the cost of natural gas to city residents has increased 125 percent while electricity costs have risen more than 45 percent.

The city's utility bills have nearly doubled in the past six years, the suit says, from $4.2 million to $7.9 million. The city pays most of the public housing utility bills because the majority of buildings have only one meter.

This increase means that the city is paying an average of $25 a month per unit for electricity in public housing. But the average electricity allowance for tenants ranges from about $7 to about $14, the suit says.

Neighborhood Legal Services filed the suit on behalf of all D.C. public housing residents who pay their own utility bills, although just four residents are actually named as plaintiffs.