Opinion ID: 2284798
Heading Depth: 2
Heading Rank: 2

Heading: The Commission's Action in the Case Before Us

Text: The Commission maintained the two-part rate structure in the instant case, keeping intact the commodity charge, and merely renaming the system charge, which is now the customer charge. Order 6051, at 81. Rate schedules, however, were reevaluated and revised. The commodity charge was increased from 21 cents per therm to 32.55 cents per therm. Order 6060, at 5. Customer charges for different classes of customers were modified as follows: CUSTOMER CLASS FORMAL CASE 647 FORMAL CASE 686 -------------------------------------------------------- (1976) (1979) Residential $72/year ($8/month; $45/year ($5/month; heating 9 months/year 9 months/year) Residential $45/year ($3.75/ $30/year ($2.50/ non-heating month; 12 months/ month; 12 months/ year) year) Small $148.50/year ($16.50/ $58.50/year ($6.50/ commercial month; 9 months/ month; 9 months/ & industrial year) year) heating (under 3,000 Cef) (Ccf = 100 cubic feet) Large $148.50/year ($16.50/ $148.50/year ($16.50/ commercial month; 9 months/ month; 9 months/ & industrial year) year) heating (3,000 Ccf and up) Non-heating $84/year ($7/month; $84/year ($7/month; commercial 12 months/year) 12 months/year) & industrial Watergate & $.19/therm $.30/therm Interruptible See Order 6060, Charts A and B; In re Washington Gas Light Co., supra at 287; Order 6051, at 90-100.

The Commission explicitly adopted the recommendation of WGL that the monthly charge to residential heating and cooling customers be reduced from $8 to $5, to soften the adverse impact that a fixed charge each month has on small volume customers. Order 6051, at 95 (quoting WGL Exh. J, at 19-20 (testimony of Edmund W. Smallwood)). Whereas the WGL proposal sought a reduction only for customers who consumed below 100 Ccf per year, however, the Commission remarked that WGL concedes that there is no real difference in the customer costs based on annual consumption [between customers who consume above and below 100 Ccf per year], Order 6051, at 96, and therefore applied the $5 charge uniformly to all residential heating and cooling customers.
Residential non-heating and non-cooling customers use gas solely for cooking and/or heating water. The Commission remarked upon the low revenues WGL receives from this class, but also noted that under the two-part rate this class of customers pays the highest unit price for service of any class. Id. WGL, the Commission found, had in the past promoted gas usage among these low-volume gas users who are in no position to respond to more cost-based rates. Id. at 97. The Commission, in the face of this conflict between cost causation and historic rate patterns and social considerations, id., reduced the customer charge for the residential non-heating, non-cooling customer class by approximately the same proportion as it reduced the residential heating and cooling class, from $3.75 per month to $2.50 per month.

When two-part rates were first employed, all commercial and industrial heating and cooling customers were treated alike. In this case WGL proposed segregating these customers into three categories according to their levels of usage, and varying customer charges accordingly. Customers consuming less than 1,000 Ccf per year (the store front commercial customer) would pay a $5 monthly customer charge; those consuming 1,000 to 3,000 Ccf per year would pay an $8 monthly charge; and those using in excess of 3,000 Ccf yearly would, under the WGL plan, pay a $25 monthly customer charge. WGL Exh. J, at 22.
The Commission accepted WGL's dichotomy between those commercial and industrial heating and cooling customers who consume more than 3,000 Ccf per year and those who consume less than this amount, but the Commission found no basis for distinguishing between small usage customers (less than 1,000 Ccf yearly) and medium usage customers (1,000 to 3,000 Ccf yearly). A $6.50 monthly customer charge was imposed on all customers who use less than 3,000 Ccf per year. The Commission also rejected WGL's proposal that large commercial heating and cooling customers pay a $25 monthly customer charge. First, the Commission found the previous customer charge of $16.50 for this group effectively comprehended the greater costs accompanying these customers' comparatively greater sizes. Second, the Commission stated that [c]ustomer costs for all customer classes exceed the respective customer charges, but we can find no reason for increasing the charge for only one sub-class, large volume commercial. Id. at 98-99. Rates for non-heating, non-cooling industrial and commercial customers were left unchanged at $7 per month.
In Formal Case 647 the rate for interruptible customers was set at nineteen cents per therm, two cents below the flat firm commodity charge. The Commission concluded that that rate covered fixed and commodity costs, was fair to consumers, and was competitive with other sources of supply. In re Washington Gas Light Co., supra at 282. In the instant case the Commission adopted the WGL proposal that the interruptible rate be increased to thirty cents per therm, to reflect increases in commodity, fixed, and capital costs; the Commission found too that the thirty cents per therm rate was still competitive with other fuel sources. Order 6051, at 99-100.