PSC Opens "In-Depth" Review of Default Service

The District of Columbia PSC has commenced an "in-depth" review of Washington Gas Light's default service procurement and design of the Purchased Gas Charge, and has sought comment on its proposed review plan

"[T]he Commission believes that it is time to take a more in-depth review of the PGC to ensure that the rates being charged for natural gas supply service to default customers are just and reasonable," the PSC said.

"[T]he Commission has recently received several complaints that have raised questions about various aspects of costs related to the PGC," the PSC noted

The Commission tentatively concludes that Task 1 in the review will be a management audit. Its purpose will be to review WGL's purchasing process and policies for the acquisition of the default natural gas supply to determine:

a. Whether the Company's purchasing policies and processes are sufficient to meet the objectives of the Company's natural gas supply requirements for the default supply program;

b. Whether the procurement planning is sufficient to ensure reliable supply for the default supply program at optimal prices that are fair, just and reasonable;

c. Whether the Company reviews its existing and potential supply plan for improvements and for consistency with its long-term strategic supply plan, and how effective is that review process;

d. How the Company's natural gas purchasing process compares to the best practices of other natural gas distribution companies in this region; and

e. Whether WGL's asset management is reasonable and whether changes are required.

The Commission tentatively concludes that Task 2 will be an attestation engagement (such as an Agreed-Upon Procedures engagement). Its purpose is to determine:

a. Whether all aspects of the PGC are being calculated accurately and applied to the bills of default supply customers correctly;

b. Whether the items that are included in the PGC tariff are consistent with Commission Orders and if not, identifying those items that are not consistent with Commission Orders; and

c. Whether the asset management costs and revenues have been accurately calculated and recorded in the PGC.

The PSC sought comment on its proposed review plan

FC 1129