Washington Gas Requests Rate Increase in Virginia to Support Safety and System Enhancements and to Address Service Costs
Ongoing aging infrastructure replacement, system upgrades and growing
cost of service are among key factors
Proposed rate increase does not include any costs associated with the
AltaGas merger
Washington Gas, a WGL Company, filed an application with the
Commonwealth of Virginia’s State Corporation Commission (VSCC) on July
31, 2018, to increase its base rates for natural gas service.
The filing addresses rate relief necessary for Washington Gas to recover
the costs of providing safe and reliable natural gas service across the
Company’s Virginia territory and earn its allowed rate of return. The
proposed base rates and charges, which are estimated to generate $37.6
million in additional annual revenue, reflect the following:
-
a reduction in tax expense of $16.3 million due to the Tax Cuts and
Jobs Act of 2017;
-
a transfer of $14.7 million currently recovered from The SAVE Plan
Rider, which is designed to recover all accelerated infrastructure
replacement costs related to the VSCC-approved SAVE Plan, or Steps to
Advance Virginia’s Energy;
-
increases to operations and maintenance, as well as plant in service
since the Company’s last base rate proceeding.
The base rate increase represents approximately $22.9 million in new
revenue not currently paid by customers through The SAVE Plan Rider. As
a result of the net rate increase, the typical residential customer will
pay about $2.10 more per month, approximately a 3 percent increase on
their total gas bill.
“For 170 years, Washington Gas has been committed to providing clean
natural gas safely and reliably to our customers in Virginia and across
the Washington, D.C. region,” said Adrian Chapman, President and Chief
Executive Officer of Washington Gas. “Our proposal to the Commission
reinforces our dedication to deliver natural gas services with
operational efficiency, to improve customer service and upgrade our
system with a focus on integrity and quality.”
The Company expects that the new rates will become effective in the
January 2019 billing cycle, subject to refund, if a final order has not
been issued by the Commission. The VSCC approved the last rate increase
by Washington Gas in Virginia on September 25, 2017.
Merger with AltaGas Will Not Impact the Rates of Customers
The VSCC approved the merger of WGL and AltaGas on October 20, 2017, and
the transaction closed on July 6, 2018. The rate case that Washington
Gas has filed with the Commission does not include any costs related to
the merger with AltaGas. The combination enables Washington Gas to
deliver more value for customers in Virginia, continue providing
exceptional service at affordable rates, and promises additional
investment in energy infrastructure and clean energy throughout the
Commonwealth and Washington, D.C. region.
“We want to emphasize that costs related to our merger with AltaGas are
not reflected in the rate case filed with the VSCC,” added Chapman. “In
fact, as a combined company, Washington Gas is in an even stronger
position to deliver the benefits of natural gas service to the
Commonwealth, increase our investments in the state, and maintain an
accelerated pace to improve our infrastructure. We look forward to
continuing our long tradition of providing safe, reliable and affordable
natural gas to our Virginia customers well into the future.”
About WGL and Washington Gas
The WGL family of companies—Washington Gas, WGL Energy, WGL Midstream
and Hampshire Gas—are now indirect, wholly-owned subsidiaries of AltaGas
Ltd [TSX:ALA]. WGL is headquartered in Washington, D.C., and is a
leading source for clean, efficient and diverse energy solutions. With
activities and assets across the U.S., WGL provides options for natural
gas, electricity, green power and energy services, including generation,
storage, transportation, distribution, supply and efficiency. Our
calling as a company is to make energy surprisingly easy for our
employees, our community and all our customers. Whether you are a
homeowner or renter, small business or multinational corporation, state
and local or federal agency, WGL is here to provide Energy Answers. Ask
Us. For more information, visit us at wgl.com
and @wglanswers.
WGL’s regulated natural gas utility, Washington Gas, provides safe,
reliable natural gas service to more than 1.1 million customers in the
District of Columbia, Maryland and Virginia. The company has been
providing energy to residential, commercial and industrial customers for
170 years. Visit us at www.washingtongas.com
and follow us on Twitter @washingtongas.
Forward-Looking Statements
This news release and other statements by us include forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 with respect to the merger with AltaGas and other
expectations. Forward-looking statements are typically identified by
words such as, but are not limited to, "estimates," "expects,"
"anticipates," "intends," "believes," "plans," and similar expressions,
or future or conditional verbs such as "will," "should," "would," and
"could." Although we believe such forward-looking statements are based
on reasonable assumptions, we cannot give assurance that every objective
will be achieved. Forward-looking statements speak only as of the date
of this release, and we assume no duty to update them. Factors that
could cause actual results to differ materially from those expressed or
implied include, but are not limited to, the outcome of pending rate
cases, general economic conditions, litigation related to the merger
with AltaGas, the potential loss of customers, employees or business
partners as a result of the merger and the factors discussed under the
"Risk Factors" heading in our most recent annual report on Form 10-K and
quarterly reports on Form 10-Q and other documents that we have filed
with, or furnished to, the U.S. Securities and Exchange Commission.
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