Washington Gas officials hope to convince state regulators to approve their plan to charge customers an extra fee to pay for improvements to the utility’s old and leaking gas lines.
Washington Gas’ proposal to the Maryland Public Service Commission calls for households to pay about 29 cents more per month in the first year of a five-year plan geared to generate about $200 million in revenue for the company to use for replacing obsolete and aging lines. Four days of hearings are slated to end Feb. 7, followed by legal briefs, a preliminary order from the commission by March 21 and an order detailing the commission’s decision by May 6.
In its application, Washington Gas proposes to spend $200 million in five years as part of a 22-year plan to spend $863 million on replacing 633 miles of main and 75,200 customer lines and connections.
Washington Gas says it will target bare or unprotected steel as well as some copper, “pre-1975 plastic,” cast iron and obsolete mechanical couplings that are part of its infrastructure.
Washington Gas provides service through about 449,000 active meters in Montgomery, Prince George’s, Charles, Calvert, St. Mary’s and Frederick counties and another 656,000 meters in Virginia and Washington, D.C., according to its application filed Nov. 7.
A law enacted last year authorizes the commission to let gas utilities charge a special fee to accelerate reasonable improvements in its infrastructure that would increase safety and reliability.
The law limits the surcharge to five years, and requires that any surcharge be assessed to residential and commercial customers in a ratio proportionate to each customer class’ use.
The law requires the surcharge to be capped and sets the limit at $2 per month for households. Washington Gas’ proposal calls for the surcharge to increase, based on “actual capital expenditures” over the five-year period, until the $2 cap is reached, Washington Gas vice president Douglas A. Staebler told the PSC in testimony filed with the commission.
“We were hoping to find a way to give them a little more money [to improve their infrastructure],” Del. Charles E. Barkley (D-Dist. 39) of Germantown said.
Last week, the commission gave Baltimore Gas and Electric conditional approval to add a surcharge to its gas customers’ bills and turned down Columbia Gas of Maryland’s surcharge request, urging them to amend it and refile.
Barkley said he believes Washington Gas’ response in repairing its aging delivery system has been sufficient so far, but that by authorizing the commission to allow a surcharge “we hoped to get ahead of the problem.”
A Washington Gas spokesman declined to discuss why the company needs the surcharge and whether they expect their request to face challenges.
“…we do not comment on pending cases,” Washington Gas vice president Eric C. Grant replied in an email.
Imani Kazana said she has been asking Washington Gas to fix leaks in her Avonridge neighborhood between Hyattsville and Mount Rainier for 10 years.
“My neighborhood sits at the center of a major intersection of regional gas lines and we have had leaks and gas smells on a regular basis” for more than 20 years, Kazana said.
Washington Gas’ proposal gives them too much flexibility on what they will do and where they will do it, she said.
Kazana said state officials have told her that the utility doesn’t plan to make improvements in her community during the five years they want to bill the surcharge even though engineers have said pipes and valves there are obsolete.
Sen. Victor R. Ramirez (D-Dist. 47) of Cheverly said he thinks a meeting will be set soon for Washington Gas to talk with Kazana and other residents about their concerns.
“Why are they not required to fully maintain the system with their money?” Kazana said. “I don’t think we customers should be charged additional for it.”
The Apartment and Office Building Association of Metropolitan Washington also objects to Washington Gas’ surcharge plan.
Bruce R. Oliver, an economist who specializes in utility rates and regulation, said in testimony filed with the service commission on behalf of the apartment and office building association wrote that Washington Gas’ surcharge application does not provide enough detail tying project work and timelines to cost recovery. Oliver also estimated that Washington Gas’ replacement plan would not keep pace with the infrastructure’s projected lifespan.
The Washington Post reported last month that a team of university researchers found nearly 5,900 gas leaks when they conducted a survey along Washington, D.C., streets,
According to the report, researchers said they found concentrations in 12 manholes that could have set the stage for explosions. They said they notified Washington Gas, but found similar concentrations at eight of those locations four months later.
Gas dispersed at other leaks and posed no direct threat, but such leaks trap heat and can contribute to climate warming, the report said.
Under a commission order issued last week, BGE will be allowed to bill households a monthly surcharge of 32 cents in 2014, 97 cents in 2015, $1.70 in 2016 and $2 in 2017 and 2018, but will not be allowed to add the charge to bills until BGE files a detailed list of projects and the PSC approves the list.
The PSC also ordered BGE to undergo an annual performance and cost audit of the projects and to adjust the surcharge as needed to make sure it is only recovering costs.
In rejecting Columbia Gas of Maryland’s proposal to add $1.92 monthly surcharge to pay for improvements to its gas infrastructure, the service commission said Columbia Gas’ plan would not accelerate improvements. The commission urged the utility to submit a plan within 60 days that would maintain or surpass the infrastructure improvement rate it has already set.
Most Columbia Gas customers are clustered around Hagerstown and Cumberland.