Washington Gas’s five-year gas main replacement irreconcilably behind schedule and exceeding costs, OPC tells Public Service Commission
BALTIMORE – Washington Gas’s work to replace its gas mains is far behind schedule but above budget, the Office of People’s Counsel told the Public Service Commission in a filing today. OPC requested a Commission hearing to consider rescinding the utility’s plan that allows it to accelerate recovery of costs from its customers.
“Washington Gas is overpromising, underdelivering, and trying to evade Public Service Commission oversight of its poor performance,” said People’s Counsel David S. Lapp. “The utility is far behind its own schedule and will never catch up, but it’s on track to recover even greater costs than the costs it put in its approved plan. That means customers aren’t getting what Washington Gas promised, but they are paying even more.”
At issue is Washington Gas’s performance of its Strategic Infrastructure Development and Enhancement (STRIDE) program, a type of cost recovery the General Assembly authorized to allow gas utilities to more quickly bill their customers for gas infrastructure replacement projects. The program costs show up in customer bills under a line item for “STRIDE surcharge.” To use the program, gas utilities must obtain Commission approval of a five-year plan that identifies the amount of gas mains and service lines they plan to replace, along with a budget.
Washington Gas’s first five-year plan—STRIDE 1—covered 2014-2018. Washington Gas completed only 73.5% of the gas main work included in its plan, but it exceeded the plan’s approved budget. In reviewing Washington Gas’s STRIDE 1 performance, the Commission expressed “serious concerns” about the company’s “past failures to complete a significant number of the projects approved by the Commission in prior years.”
Nevertheless, in 2018, Washington Gas filed an even more aggressive five-year plan—STRIDE 2—covering 2019-2023. The Commission approved the utility’s plan to replace 120 miles of gas main pipes for a budget of $350 million, a sharp increase from the overall STRIDE 1 budget of $218 million. Because of Washington Gas’s prior problems, the Commission “emphasize[d] that it will remain vigilant to ensure that WGL’s project completion rate is consistent with WGL’s proposed plan.”
But Washington Gas’s current filings with the Commission show that—once again—the utility is falling far short of its five-year plan. In fact, to meet its plan for 120 miles of main replacements, Washington Gas would need to replace at least 70 miles of main over the last two years of STRIDE 2. Yet, Washington Gas is on pace to spend the entire budget—and then some more—for 120 miles that the Commission approved.
“Washington Gas is spending according to its submitted and Commission-approved STRIDE 2 plan, but it is not delivering the benefits that the plan was supposed to bring customers,” Lapp said. “Washington Gas’s customers are receiving far less in benefits than what Washington Gas advertised. It is time for the Commission to exercise its vigilance.”
OPC is asking the Commission to scrutinize Washington Gas’s performance to determine its consistency with State law and consider using its authority to rescind the utility’s STRIDE plan.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
* * *
|
