PSC Opens Investigation of Utility's Default Service, Monthly Purchased Gas Charge

The District of Columbia PSC opened an investigation into Washington Gas Light Company's default natural gas supply service provided to District of Columbia customers through the Purchase Gas Charge (PGC).

"The Commission believes that a more in-depth review of the PGC is warranted to ensure that the rates being charged for natural gas supply service to default customers are just and reasonable. Accordingly, pursuant to D.C. Code § 34-908, the Commission opens this investigation into the PGC," the PSC said.

The PGC reflects the combined calculation of the various costs of natural gas purchases and the cost for transporting the purchased gas through the natural gas pipelines to WGL's city gates for distribution.

PGC costs include the cost for the natural gas that WGL purchases from the various suppliers transported in natural gas pipelines, the cost of natural gas withdrawn from storage, various demand costs charged by various suppliers, and other adjustments allowed by the Commission.

Unlike default electric supply service where the electric supply is acquired through periodic competitive procurements that are conducted by the electric default service provider and monitored by an independent third party, the natural gas supply that is acquired for default service is acquired by the default provider pursuant to a Commission approved tariff. The costs are primarily derived from market prices as dictated by the New York Mercantile Exchange (NYMEX).

The Commission has generally monitored WGL's PGC by reviewing the quarterly PGC filings. These quarterly PGC filings reflect the applicable retail rates based on the latest available actual and forecasted data. While the Commission has stated that these filings are accepted subject to audit, to date no independent audit of the PGC has been conducted.

Formal Case 1129