Washington Gas Passes Expenses To Customers

D.C. gas customers face monthly surcharge

By: Michael Neibauer
Examiner Staff Writer
October 13, 2009

Washington Gas customers in the District face a surcharge on their monthly bills starting in 2011 to pay for a program aimed at preventing degradation of pipes and dangerous leaks. The surcharge amount has not been determined, but the District's share is expected to run more than $6 million a year divided among 151,000 Washington Gas customers -- an average of about $40 per year.

The settlement between Washington Gas and the Office of the People's Counsel, the District's utility ratepayer advocate, is nearly five years in the making. During that period, the utility was accused by experts of playing a "wait and see" game by failing to address segments of pipes vulnerable to leaks.

The deal allows Washington Gas to recover the costs of injecting hexane, an ingredient in liquefied natural gas, into its system. The utility also has agreed to spend as much as $28 million over seven years to replace aging pipes and mechanical couplings -- devices used to connect pipes -- in the District. Those costs would not be included in the surcharge. The fee would kick in each Oct. 1, starting in 2011, when the cap on gas rates expires. The agreement, which People's Counsel Elizabeth Noel said would ensure "safe and reliable service," is now before the D.C. Public Service Commission for approval. Washington Gas introduced hexane in 2004 following a spike in gas leaks, especially in Prince George's County. The utility said its liquid natural gas was losing hydrocarbons as it flowed from Dominion's terminal in Calvert County, which had a "deleterious effect on rubber seals in the mechanical couplings." Hexane stabilized its product.

The price of hexane, like gasoline, is volatile. Washington Gas uses roughly 1 million gallons a year alone at its Gardiner Road plant in Waldorf, which serves Prince George's and the District.

The Hudson River Group, a consultant hired by the Office of the People's Counsel, deemed hexane a questionable temporary fix and an ineffective permanent solution. Washington Gas should identify which couplings are failing and replace them as soon as possible, the group said.

"The safety code ... requires [Washington Gas] to recondition or phase out segments vulnerable to leaks," the group said in testimony. "It has not done so to date."

mneibauer@washingtonexaminer.com

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