OPC Files Complaint Against Utility for "Unlawful" Compensation Provided to Retail Suppliers

The District of Columbia Office of the People's Counsel has filed a complaint against Washington Gas Light alleging that WGL engaged in, "unauthorized and unlawful cash compensation of Competitive Service Providers (CSP) who over-delivered natural gas supplies to WGL's city gate during the 2008-2009 winter heating season."

OPC alleged that ratepayers overpaid $2.4 million as a result of the cash-out method WGL used to compensate CSPs for over- and under-deliveries in 2009

"It was infelicitous for WGL to ameliorate these over-deliveries using a cash-payout method because it contravened the express terms of WGL's tariff-namely, the Firm Delivery Service Gas Supplier Agreement ('Rate Schedule No. 5') -- which explicitly describes the manner in which WGL must manage any over- or under-deliveries to WGL by third-party gas suppliers or CSPs," OPC said.

OPC said that the tariff requires that over- and under-deliveries must be reconciled through in-kind volumetric adjustments.

If a cash-out were permitted, OPC argued that it should have been based on the average daily spot price at the most commonly used city gate, while OPC alleged that the payments were actually based on the weighted average cost of gas ("WACOG").

According to OPC, the over-deliveries result from an error in the forecasting model WGL used to determine the Daily Required Volumes ("DRVs") for the CSPs, which resulted in over-delivery of natural gas supplies to WGL's city gate over the period January to March 2009.

OPC requested that the PSC calculate the difference between the amount WGL actually paid to CSPs for the over-deliveries in question and the amount it should have paid pursuant to its tariff and order WGL to refund that amount to WGL's ratepayers.

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