Washington Gas Light Co. announced yesterday that it is seeking permission to impose new charges ranging from $7.80 to $14 a month or more on its District, Virginia and Maryland customers who cut their gas consumption significantly by substituting electricity or some other form of energy of gas.
If permission is granted by the regulatory commissions, WGL would use its computers to detect customers whose gas usages goes down drastically. If further investigation discloses that the customer is using an electric heat pump, electric heating panels, propane or even a wood stove for most of his heating - while still using gas for the rest - then the new "standby service" charge would be imposed.
The reasoning behind the proposed charge is simple: if people begin changing the energy mix in their homes and workplaces to use gas only when the weather becomes extremely cold - a time when gas is dependable and cheap for consumers while other energy sources tend to become expensive and inefficient - then the company's revenues will drop and it will fail to earn the return expected on its fixed costs for equipment.
Critics of the proposed charge say the company is seeking to preempt the marketplace that might otherwise be available to alternative energy sources such as heat pumps. They also say the proposed charge seems to penalize consumers for conserving gas - a scarce resorce.
"We believe that full use of gas is still the most efficient and economical," said Edmund Smallwood, WGL's vice president for rates and regulatory affairs. "Others are touting other [energy] combinations and we're simply saying to our customers that we'll give you the opportunity to consider combinations of energy sources, but we don't want you to impose an undue burden on other customers when you do this."
The "undue burden," Smallwood said, would be placed on regular full use gas customers who would have to begin paying some of the fixed costs for those customers whose gas use - and therefore payments to the company - would be drastically reduced.
The company does not know how many of its 413,000 residential heating customers and 55,000 nonresidential customers - the groups that would be affected by the proposed charge - may already have changed their energy mixes in ways that would subject them to the charge, a spokesman said. The computer has not yet been set up to flag these customers, he said.
The new charge would not apply, however, if solar energy is used as a primary energy source with gas on standby.
"We don't have the [solar] as a problem yet," said Smallwood. "That's still about five years away."
The proposed charge would not affect 77,000 residential customers of WGL who use gas in small quantities for stoves and water heating but not for heating their homes. Their demand for gas is steady if small, and because they use no gas for heating, their demand will not increase dramatically in especially cold weather, according to the company.
It is a dramatic increase in demand for gas in expecially cold weather from those who use gas on a standby basis that creates problems for the company. It must have large supplies of gas available for these "peak periods," and the equipment available to deliver it.
Under the proposal, residential standby service customers in the District of Columbia and Virginia would pay a system charge of $22 a month from September through May - an increase of $14 in the District and $12.60 in Virginia.
Maryland residential customers on standby service would pay a system charge of $16 every month of the year - an increse of $7.80.
Nonresidential customers, including industrial, commercial and group-metered apartments, would pay an additional $14 in the District, $8 in Maryland and $12.60 in Virginia for each 100,000 BTUs of hourly rated input of their gas furnaces, plus the normal systems charge of $12 or more a month, depending on the jurisdiction and type of customer.
"I'm not sure what they're driving at here other than another device to impose anticonservation rates on people," said Brian Lederer, the D.C. people's counsel who represents consumers in utility cases. "They don't seem to have gotten the message that people don't like the system charge, that it discourages conservation."
"It certainly doesn't let the marketplace work, does it?" said Don Gilchrist, vice president of marketing and sales for TVI Corp. of Kensington, which is selling Energy-Kote radiant heating systems that work on electricity and that Gilchrist said are competitive with gas.
A spokesman for Potomac Electric Power Co. said that the company understands that "it's important to recover costs," but that utility rates "must not impose charges which are going to be anticompetititve in their effect on the residential space heating market."