Washington Gas & Light Reaches New Rate Settlement

In a press release from Washington Gas & Light Co. Monday, it was announced that the company has reached a settlement agreement in its Virginia rate increase proceeding that is currently in progress.

The rate increase, which still needs to be approved by the State Corporation Commission of Virginia, is a rise in price of the company's delivery services and two new rate designs.

The settlement says that rates will increase by $3.9 million annually. The press release states that it is designed to allow investments in system maintenance and improvement projects.

The settlement also says that Washington Gas and Light will freeze its billed delivery rates for the next for years in the Commonwealth. The company will also be implementing a mechanism called the Weather Normalization Adjustment mechanism. Along with this, they will also introduce a Performance Based Rate plan that will share cost savings with customers.

Adrian P. Chapman, Washington Gas's Vice President of Operations, Regulatory Affairs and Energy Acquisition said, "We applaud all of the parties for working cooperatively to reach an agreement that will avoid the costs of an extensive regulatory proceeding and produce sound results for all involved. Under this plan, we will introduce a Weather Normalization Adjustment mechanism, which will benefit Virginia customers by minimizing monthly bill volatility caused by weather fluctuations and associated demand for natural gas. Washington Gas, in turn, has greater leverage to stabilize revenues and support ongoing expenditures necessary for daily operations, maintenance and improvements that support system integrity and reliability. It's a win-win for everyone."

The Weather Normalization Adjustment (WNA) allows Washington Gas and Light to credit customers' accounts when the weather is abnormally cold and more gas is needed. In contrast, customers' bills will have a surcharge added when weather is warmer than normal and gas usage decreases.

The Performance Based Rate Plan allows Virginia customers to benefit when the company has earnings beyond a specific target. 75 percent of exceeded earnings with be shared with customers while 25 percent will be shared with investors.

The settlement also contains provisions to recover from hexane costs from Washington Gas & Light's gas conditioning facilities. According to the press release, it also includes the "recovery of the gas cost portion of uncollectible expense."

Washington Gas & Light Co. is a subsidiary of WGL Holdings Inc. WGL owns a multitude of energy-based companies such as retail energy marketing, commercial hearting, and air conditioning services.

Sources:

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