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D.C. Has Second Thoughts About Transition Costs

Fortnightly Magazine - March 15 1995

The District of Columbia Public Service Commission (PSC) will permit Washington Gas Light Co., a natural gas local distribution company (LDC), to continue collecting Order 636 pipeline transition charges through its purchased-gas adjustment clause (PGA), but "questions" whether the costs should become a standard PGA element. The PSC set the matter aside for further review, voicing concern over the "potentially unchecked magnitude" of the costs absent regulatory oversight.

PSC staff favored deferring the charges until the LDC's next rate case and amortizing at least 50 percent of the total transition cost. Staff argued that it would be unfair for current ratepayers to foot the entire bill for an enormous "one-time market shift." The PSC directed its Gas Procurement Working Group to file a report on a reasonable treatment for the costs and an auditing mechanism. Re District of Columbia Natural Gas, a division of Washington Gas Light Co., Formal Case No. 874, Order No. 10516, Jan. 17, 1995 (D.C.P.S.C.).

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