Continued progress towards the replacement of aging infrastructure,
ongoing network upgrades for improved service, rising cost of service,
among main drivers
Rate increase request reflects no costs associated with pending
merger with AltaGas
AltaGas merger to save customers $800,000 per year
Washington Gas, a WGL Company (NYSE: WGL), filed an application today
with the Maryland Public Service Commission to increase its base rates
and charges for natural gas service. Washington Gas last requested a
rate increase from the Commission five years ago.
The filing addresses rate relief necessary for Washington Gas to recover
its costs of providing safe, reliable natural gas service in its
Maryland service territory while delivering improved service to
customers, and to allow the Company to earn its allowed rate of return.
The proposed rates and charges would generate $41.3 million in
additional annual revenue. The change in revenue includes an increase in
base rates of $56.3 million partially offset by a reduction of $15
million in surcharges currently paid by customers for system upgrades.
Residential heating customers pay $2 per month for this surcharge, which
will be transferred into base rates and thus is not an increase to a
customer's overall monthly bill. The typical residential heating
customer will pay about $5.18 more per month, approximately a 7 percent
increase on their total gas bill.
The $15 million that customers have been paying since 2014 through the
monthly surcharge is associated with Washington Gas' natural gas
infrastructure replacement and environmental improvement initiatives,
previously approved by the Commission under Maryland's Strategic
Infrastructure Development and Enhancement (STRIDE) statute.
Gas Bills Reduced in February
Washington Gas lowered customers' bills earlier this year by passing
along federal corporate income tax savings as a result of the Tax Cuts
and Jobs Act of 2017. Maryland customers received an annual rate
decrease of $14.8 million beginning February 1, 2018, or about $2.16 per
month for each residential heating customer.
"For 170 years, Washington Gas has been committed to adhering to the
highest standards of safety and reliability when delivering high-quality
natural gas service to our customers. In Maryland, we have been
investing to improve the integrity of our system through ongoing
replacement of aging infrastructure under STRIDE to deliver the benefits
of natural gas while enhancing service delivery," said Adrian Chapman,
President and Chief Operating Officer at Washington Gas. "Our proposal
to the Commission reflects this commitment and includes our dedication
to continue operational efficiency when providing clean natural gas to
our 484,000 customers in Maryland."
The Company anticipates that the new rates will become effective in the
December 2018 billing cycle given the statutory timeline for Commission
consideration. The Commission approved Washington Gas' last rate
increase in Maryland on November 22, 2013.
Merger with AltaGas Will Not Impact Customer Rates
The Commission approved the merger of WGL and AltaGas on April 4, 2018,
and the deal is expected to close in mid-2018, pending final approval
from the Public Service Commission of the District of Columbia. As part
of its merger commitments, AltaGas and WGL have pledged that operational
savings resulting from the merger will be passed through to customers.
Maryland residential heating customers also will receive a one-time $50
bill credit once the merger closes.
"It is important to note that no costs related to our pending merger
with AltaGas are reflected in the rate request we are filing with the
Commission," said Chapman. "In fact, we expect that our customers will
see significant benefits as a result of the merger, including $800,000
in operational savings per year for the next five years which are
included in this filing."
About Washington Gas
Washington Gas Light Company is a regulated natural gas utility
providing safe, reliable natural gas service to more than 1.1 million
customers in the District of Columbia, Maryland and Virginia. A
subsidiary of WGL Holdings, Inc. (WGL), the company has been providing
energy to residential, commercial and industrial customers for 170
years. Follow us @washingtongas on Twitter.
WGL (NYSE: WGL), headquartered in Washington, D.C., is a leading source
for clean, efficient and diverse energy solutions. With activities and
assets across the U.S., WGL consists of Washington Gas, WGL Energy, WGL
Midstreamand Hampshire Gas. WGL provides options for natural gas,
electricity, green power and energy services, including generation,
storage, transportation, distribution, supply and efficiency. Our
calling as a company is to make energy surprisingly easy for our
employees, our community and all our customers. Whether you are a
homeowner or renter, small business or multinational corporation, state
and local or federal agency, WGL is here to provide Energy Answers. Ask
Us. For more information, visit us at wgl.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180515006713/en/
Brian Edwards, 202-624-6620
Douglas Bonawitz, 202-624-6129
Source: Washington Gas
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