B-64980, APRIL 17, 1947, 26 COMP. GEN. 794

B-64980: Apr 17, 1947

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- UNDER WHICH GAS WILL BE BILLED ON A THERMAL RATHER THAN VOLUMETRIC BASIS. IS NOT TO BE REGARDED AS RESULTING IN A RATE EXCEEDING THAT (70 CENTS PER 1. IT APPEARING THAT THE COST IN TERMS OF HEAT VALUE WILL NOT EXCEED THAT CONTEMPLATED BY SAID ACT ALTHOUGH. 1947: I HAVE YOUR LETTER DATED APRIL 1. FUTURE RATES WILL BE BASED ON A SPECIFIC NUMBER OF CENTS PER THERM. A THERM IS EQUAL TO 100. YOUR ATTENTION IS INVITED TO SECTION 1207 OF TITLE 43 OF THE DISTRICT OF COLUMBIA CODE. THAT IF A CONSUMER OF GAS OTHER THAN THE GOVERNMENT OR THE DISTRICT OF COLUMBIA SHALL NOT PAY MONTHLY ANY GAS BILL WITHIN TEN DAYS AFTER THE SAME SHALL HAVE BEEN PRESENTED. THE GOVERNMENT IS NOT TO BE CHARGED A PRICE IN EXCESS OF 70 CENTS PER 1.

B-64980, APRIL 17, 1947, 26 COMP. GEN. 794

GAS - RATES - STATUTORY LIMITATION - EFFECT OF CONVERSION FROM VOLUMETRIC TO THERMAL BASIS OF COMPUTATION THE CHANGE IN THE METHOD OF BILLING FOR GAS IN THE DISTRICT OF COLUMBIA-- - IN CONNECTION WITH THE CHANGE FROM MIXED TO NATURAL GAS AND AN INCREASE IN THE HEAT VALUE PER UNIT VOLUME--- UNDER WHICH GAS WILL BE BILLED ON A THERMAL RATHER THAN VOLUMETRIC BASIS, IS NOT TO BE REGARDED AS RESULTING IN A RATE EXCEEDING THAT (70 CENTS PER 1,000 CUBIC FEET) PERMITTED BY THE ACT OF SEPTEMBER 1, 1916, IT APPEARING THAT THE COST IN TERMS OF HEAT VALUE WILL NOT EXCEED THAT CONTEMPLATED BY SAID ACT ALTHOUGH, ON A VOLUMETRIC BASIS, THE PERMISSIBLE RATE WOULD BE EXCEEDED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE TREASURY, APRIL 17, 1947:

I HAVE YOUR LETTER DATED APRIL 1, 1947, AS FOLLOWS:

THE PUBLIC UTILITIES COMMISSION OF THE DISTRICT OF COLUMBIA, BY ORDER NO. 3155, DATED MARCH 6, 1947, AUTHORIZED A CHANGE IN THE BASIS OF BILLING BY WASHINGTON GAS LIGHT COMPANY FOR GAS SERVICE FROM A VOLUMETRIC TO A THERMAL BASIS. CONSEQUENTLY, FUTURE RATES WILL BE BASED ON A SPECIFIC NUMBER OF CENTS PER THERM, RATHER THAN ON A SPECIFIC NUMBER OF CENTS PER HUNDRED CUBIC FEET. A THERM IS EQUAL TO 100,000 BRITISH THERMAL UNITS.

YOUR ATTENTION IS INVITED TO SECTION 1207 OF TITLE 43 OF THE DISTRICT OF COLUMBIA CODE, WHICH PROVIDES AS FOLLOWS:

"MAXIMUM RATES FOR GAS; ADDITIONAL CHARGE FOR NONPAYMENT OF BILLS.-- NO PART OF ANY MONEY APPROPRIATED BY ANY ACT SHALL BE USED FOR THE PAYMENT TO THE WASHINGTON GAS LIGHT COMPANY OR THE GEORGETOWN GAS LIGHT COMPANY FOR ANY GAS FURNISHED BY SAID COMPANIES FOR USE IN ANY OF THE PUBLIC BUILDINGS OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA AT A RATE IN EXCESS OF 70 CENTS PER ONE THOUSAND CUBIC FEET.

"THE WASHINGTON GAS LIGHT COMPANY SHALL NOT CHARGE OR COLLECT FOR GAS FURNISHED A PRIVATE CONSUMER IN ANY PART OF THE DISTRICT OF COLUMBIA A RATE IN EXCESS OF 75 CENTS PER ONE THOUSAND CUBIC FEET OF GAS SO FURNISHED: PROVIDED, THAT IF A CONSUMER OF GAS OTHER THAN THE GOVERNMENT OR THE DISTRICT OF COLUMBIA SHALL NOT PAY MONTHLY ANY GAS BILL WITHIN TEN DAYS AFTER THE SAME SHALL HAVE BEEN PRESENTED, SAID GAS COMPANY MAY CHARGE AND COLLECT FROM ANY SUCH CONSUMER SO FAILING TO PAY SAID GAS BILL AS AFORESAID 10 CENTS ADDITIONAL FOR EACH ONE THOUSAND CUBIC FEET OF GAS REPRESENTED BY SAID BILL: AND PROVIDED FURTHER, THAT NOTHING CONTAINED IN THIS SECTION SHALL BE CONSTRUED AS LIMITING OR TAKING AWAY ANY OF THE POWERS VESTED BY LAW IN THE PUBLIC UTILITIES COMMISSION OF THE DISTRICT OF COLUMBIA.

"THE GEORGETOWN GAS LIGHT COMPANY SHALL NOT BE PERMITTED TO CHARGE OR COLLECT MORE THAN 85 CENTS PER ONE THOUSAND CUBIC FEET FOR GAS FOR COOKING, ILLUMINATING, OR OTHER PURPOSES. ( SEPT. 1, 1916, 39 STAT. 716, C. 433, SEC. 6.)"

UNDER THE ABOVE QUOTED SECTION, THE GOVERNMENT IS NOT TO BE CHARGED A PRICE IN EXCESS OF 70 CENTS PER 1,000 CUBIC FEET. IN THE PAST, MIXED GAS CONTAINING 600 BRITISH THERMAL UNITS PER CUBIC FOOT HAS BEEN FURNISHED BY THE WASHINGTON GAS LIGHT COMPANY. HOWEVER, BY VIRTUE OF THE COMMISSION'S HOLDING IN ORDER NO. 3155, THE WASHINGTON GAS LIGHT COMPANY IS NOW PERMITTED TO CHANGE THE HEATING VALUE OF GAS WHICH IT DISTRIBUTES FROM 600 BRITISH THERMAL UNITS PER CUBIC FOOT TO 1100 BRITISH THERMAL UNITS PER CUBIC FOOT. SINCE PAYMENT IS NOW TO BE RENDERED ON A THERM BASIS, AND SINCE THE NUMBER OF THERMS PER CUBIC FEET HAS BEEN INCREASED FROM 600 TO 1100, THE HEATING VALUE PER CUBIC FOOT HAS INCREASED APPROXIMATELY 83%, IF THE FACTS STATED BY THE COMMISSION ARE CORRECT. THEREFORE, THE BILLING FOR NATURAL GAS CONTAINING 1100 BRITISH THERMAL UNITS PER CUBIC FOOT WILL BE APPROXIMATELY 83 PERCENT HIGHER PER CUBIC FOOT THAN FOR THE HAND, THE NUMBER OF CUBIC FEET REQUIRED TO BE USED BY ANY CONSUMER WILL BE PROPORTIONATELY LESSENED, SO THAT ACCORDING TO THE FINDING OF THE COMMISSION, THE NEW RATES DO NOT REFLECT ANY CHANGE IN THE ULTIMATE COST OF GAS SERVICE TO THE CONSUMERS. NEVERTHELESS, IT APPEARS THAT, IN THE FUTURE, CHARGES FOR GAS FURNISHED TO A PUBLIC BUILDING IN THE UNITED STATES WILL BE IN EXCESS OF 70 CENTS PER 1,000 CUBIC FEET, ALTHOUGH, IF STATEMENTS OF THE COMMISSION ARE CORRECT, THERE SHOULD BE NO INCREASE IN PRICE FOR MONTHLY SERVICES RENDERED. FROM A CONSIDERATION OF THE WORDING OF THE INITIAL PORTION OF THE STATUTE, IT APPEARS THAT PAYMENT AT ANY TIME IN EXCESS OF 70 CENTS PER 1,000 CUBIC FEET OF GAS IS PROHIBITED.

A SUBSEQUENT CLAUSE IN THE ABOVE STATUTE STATES THAT NOTHING IN THE STATUTE SHALL BE CONSIDERED AS LIMITING OR TAKING AWAY ANY OF THE POWERS VESTED BY LAW IN THE PUBLIC UTILITIES COMMISSION OF THE DISTRICT OF COLUMBIA. IT IS POSSIBLE THAT THIS CLAUSE IS SUFFICIENT IN ITSELF TO ALLOW THE COMMISSION TO ORDER A CHANGE-OVER FROM A RATE BASIS CALCULATED UPON CUBIC FEET CONSUMED TO ONE CALCULATED UPON THERMS CONSUMED.

THE BUREAU OF FEDERAL SUPPLY, TREASURY DEPARTMENT, RECEIVED A COMMUNICATION FROM THE WASHINGTON GAS LIGHT COMPANY, DATED MARCH 20, 1947, ANALYZING THE FACTS PRESENTED ABOVE AND STATING THAT THE MAXIMUM PRICE PERMITTED BY THE STATUTE WOULD NOW BE FIXED AT 11.66 CENTS PER THERM, RATHER THAN AT 70 CENTS PER THOUSAND CUBIC FEET. MATHEMATICALLY, SUCH A COMPUTATION APPEARS CORRECT ON THE BASIS OF AN INCREASE OF APPROXIMATELY 83 PERCENT IN THE HEATING VALUE OF A CUBIC FOOT OF GAS. THE WASHINGTON GAS LIGHT COMPANY HAS SUGGESTED CERTAIN CHANGES IN THE GENERAL SCHEDULE OF SUPPLIES CONTRACT WITH THAT CONCERN, AS INDICATED IN THE PHOTOSTATS ACCOMPANYING THIS COMMUNICATION. BUT SINCE THE INITIAL PORTION OF THE QUOTED STATUTE INDICATES A DEFINITE MAXIMUM FIGURE TO BE PAID PER THOUSAND CUBIC FEET, AND SINCE SUCH MAXIMUM WILL BE EXCEEDED BY PAYMENT ON THE BASIS NOW AUTHORIZED BY THE COMMISSION, AN ADVANCE RULING BY YOUR OFFICE APPEARS NECESSARY BEFORE MAKING PAYMENT OF BILLS RENDERED IN THE FUTURE ON THE PROPOSED BASIS.

THE NEW TYPE OF BILLING AUTHORIZED BY THE COMMISSION WILL BE PUT INTO EFFECT BY THE WASHINGTON GAS LIGHT COMPANY MARCH 31, 1947, AND SUBSEQUENT BILLS WILL BE RENDERED UPON A THERMAL BASIS. IN VIEW OF THE SHORT SPACE OF TIME REMAINING BEFORE BILLS WILL BE SUBMITTED TO THE BUREAU OF FEDERAL SUPPLY COMPUTED UPON A THERMAL BASIS, IT IS REQUESTED THAT AN ADVANCE RULING BE MADE AS EXPEDITIOUSLY AS POSSIBLE.

IN THE REFERRED-TO LETTER OF MARCH 20, 1947, FROM THE WASHINGTON GAS LIGHT CO. TO THE BUREAU OF FEDERAL SUPPLY, IT IS STATED, IN PART, AS FOLLOWS:

THE THERMAL RATE SCHEDULES DO NOT RESULT IN ANY INCREASE IN THE COST OF GAS SERVICE; THEY MERELY TRANSLATE EXISTING RATES FROM THE VOLUMETRIC TO THE THERMAL BASIS. THE CHANGE IN SCHEDULE C, SCHEDULE E, AND SCHEDULE F OF THE GENERAL SCHEDULE SIMPLY SUBSTITUTES THE EQUIVALENT RATES ON THE THERMAL BASIS, WHICH ARE SET FORTH IN SCHEDULE C, SCHEDULE E, AND SCHEDULE F, RESPECTIVELY, OF THE ACCOMPANYING THERM RATE SCHEDULES APPROVED BY THE PUBLIC UTILITIES COMMISSION. IN ADDITION, THE MAXIMUM RATE OF 70 CENTS PER ONE THOUSAND CUBIC FEET, AUTHORIZED BY SECTION 6 OF THE ACT APPROVED SEPTEMBER 1, 1916, (39 STATUTES. 716) AND SET FORTH UNDER QUALIFICATION (A) OF THE GENERAL SCHEDULE AND IN THE SCHEDULES, HAS BEEN CHANGED TO ITS EQUIVALENT, 11.66 CENTS PER THERM.

THE CONVERSION OF THE MAXIMUM RATE TO THE EQUIVALENT THERMAL BASIS ILLUSTRATES THE PRINCIPLE APPLICABLE TO THE CONVERSION OF ALL OF THE SCHEDULES. VOLUMETRIC RATES HERETOFORE IN EFFECT HAVE BEEN BASED ON GAS HAVING A HEATING VALUE OF 600 BTU PER CUBIC FOOT, WHICH WAS ESTABLISHED BY ORDER NO. 86 ISSUED BY THE PUBLIC UTILITIES COMMISSION, EFFECTIVE SEPTEMBER 1, 1914, AND HAS BEEN IN USE CONTINUOUSLY SINCE THAT TIME. ONE THOUSAND CUBIC FEET OF 600 BTU GAS CONTAINS A TOTAL HEAT CONTENT OF 600,000 BTU. AS ONE THERM IS 100,000 BRITISH THERMAL UNITS, ONE THOUSAND CUBIC FEET OF 600 BTU GAS THUS AMOUNTS TO SIX THERMS. BY DIVIDING THE RATE OF 70 CENTS FOR ONE THOUSAND CUBIC FEET OF 600 BTU GAS BY SIX THERMS, WE OBTAIN THE EQUIVALENT RATE OF 11.66 CENTS PER THERM.

AS INDICATED IN THE AFORESAID LETTERS AND AS APPEARS FROM THE FINDINGS AND OPINION, AND ORDER NO. 3155, DATED MARCH 6, 1947, OF THE PUBLIC UTILITIES COMMISSION OF THE DISTRICT OF COLUMBIA, THERE IS NOT HERE INVOLVED THE MATTER OF AN INCREASE IN THE RATES FOR GAS WHICH IS SUPPLIED BY THE WASHINGTON GAS LIGHT CO. RATHER, THE MATTER INVOLVES A CHANGE IN THE TYPE OF GAS TO BE FURNISHED, THAT IS, FROM MIXED GAS TO NATURAL GAS, WITH AN INCREASE IN HEATING VALUE FROM 600 BRITISH THERMAL UNITS PER CUBIC FOOT OF MIXED GAS TO APPROXIMATELY 1,100 BRITISH THERMAL UNITS PER CUBIC FOOT OF NATURAL GAS. ALSO, THERE IS INVOLVED A CHANGE IN THE METHOD OF COMPUTING THE AMOUNT TO BE CHARGED FOR GAS CONSUMED FROM A VOLUMETRIC TO A THERMAL BASIS AT NO INCREASE IN THE ULTIMATE COST TO CONSUMERS. HOWEVER, AS YOUR LETTER POINTS OUT, AS A RESULT OF THE CHANGE IN THE METHOD OF COMPUTING THE AMOUNT TO BE CHARGED FOR NATURAL GAS CONSUMED, THE COST TO THE GOVERNMENT FOR EACH 1,000 CUBIC FEET OF NATURAL GAS USED WILL BE MORE THAN 70 CENTS, THE MAXIMUM RATE PRESCRIBED IN THE STATUTE QUOTED IN YOUR LETTER. THUS, UNDER SECTION 3 OF ORDER NO. 3155, SUPRA, THE NUMBER OF THERMS TO WHICH THE THERM RATES SHALL APPLY ARE TO BE DETERMINED BY APPLYING TO THE METERED CONSUMPTION MEASURED IN UNITS OF 100 CUBIC FEET, THE CONVERSION FACTOR OF 1.1 FOR NATURAL GAS HAVING A MONTHLY AVERAGE BRITISH THERMAL UNIT CONTENT RANGING FROM 1.086 THROUGH 1.115. USING SUCH METHOD OF COMPUTATION, EACH 1,000 CUBIC FEET OF NATURAL GAS CONSUMED WOULD BE CONVERTED INTO 11 THERMS AND, AT THE PROPOSED RATE OF 11.66 CENTS PER THERM, THE COST TO THE GOVERNMENT THEREFOR WOULD BE $1.2826, OR A SUM IN EXCESS OF THE MAXIMUM RATE OF 70 CENTS PER 1,000 CUBIC FEET SPECIFIED IN THE STATUTE HERE INVOLVED. BUT, ON THE OTHER HAND, IT IS NOTED THAT, FROM EACH 1,000 CUBIC FEET OF NATURAL GAS CONSUMED, THE GOVERNMENT WILL RECEIVE APPROXIMATELY 1,100,000 BRITISH THERMAL UNITS OF HEATING CONTENT (1,000 CUBIC FEET TIMES 1,100 BRITISH THERMAL UNITS) AS COMPARED WITH 600,000 BRITISH THERMAL UNITS OF HEATING CONTENT (1,000 CUBIC FEET TIMES 600 BRITISH THERMAL UNITS) WHICH THE GOVERNMENT RECEIVES FROM MIXED GAS. ALSO, IT WILL BE NOTED FROM THE LETTER OF MARCH 20, 1947, FROM THE WASHINGTON GAS LIGHT CO. THAT THE RATE OF 11.66 CENTS PER THERM IS EQUIVALENT TO A RATE OF 70 CENTS PER THOUSAND CUBIC FEET OF GAS WITH A HEATING CONTENT OF 600 BRITISH THERMAL UNITS PER CUBIC FOOT.

WHILE THE STATUTE HERE INVOLVED FIXED A MAXIMUM RATE OF 70 CENTS PER 1,000 CUBIC FEET TO BE PAID FOR GAS FURNISHED BY THE WASHINGTON GAS LIGHT CO. FOR USE IN ANY PUBLIC BUILDING OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA, THERE IS NOTHING THEREIN SPECIFYING THE HEATING CONTENT OF THE GAS TO WHICH SAID MAXIMUM RATE IS TO APPLY. HOWEVER, AT THE TIME THE SAID STATUTE WAS ENACTED, OR ON SEPTEMBER 1, 1916, THERE WAS IN EFFECT IN THE DISTRICT OF COLUMBIA ORDER NO. 86, DATED JULY 23, 1914, ISSUED BY THE PUBLIC UTILITIES COMMISSION OF THE DISTRICT OF COLUMBIA, EFFECTIVE SEPTEMBER 1, 1914, SECTION 20 OF WHICH PROVIDES AS FOLLOWS:

THE MONTHLY AVERAGE TOTAL HEATING VALUE OF GAS FOR ANY CALENDAR MONTH SUPPLIED BY ANY GAS LIGHT COMPANY SHALL NOT BE LESS THAN SIX HUNDRED (600) BRITISH THERMAL UNITS PER CUBIC FOOT OF GAS NOR SHALL THE DAILY TOTAL HEATING VALUE OF THE GAS FOR ANY DAY FALL BELOW FIVE HUNDRED FIFTY (550) B.T.U. PER CUBIC FOOT OF GAS.

HENCE, IT REASONABLY MAY BE ASSUMED THAT, IN FIXING THE RATE OF 70 CENTS PER THOUSAND CUBIC FEET AS THE MAXIMUM WHICH COULD BE PAID FOR GAS FURNISHED BY THE WASHINGTON GAS LIGHT CO. FOR USE IN ANY PUBLIC BUILDING OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA BY THE ACT APPROVED SEPTEMBER 1, 1916, 39 STAT. 716, THE CONGRESS HAD IN MIND GAS OF THE TYPE AND NATURE AND CONTAINING THE HEATING VALUE OF THAT BEING MANUFACTURED AT THE TIME SAID STATUTE WAS ENACTED, THAT IS, WITH A HEATING VALUE OF 600 BRITISH THERMAL UNITS PER CUBIC FOOT.

ACCORDINGLY, AND SINCE THE RATE OF 11.66 CENTS PER THERM IS EQUIVALENT TO THE RATE OF 70 CENTS PER THOUSAND CUBIC FEET FOR GAS WITH A HEATING VALUE OF 600 BRITISH THERMAL UNITS PER CUBIC FOOT, YOU ARE ADVISED THAT THE PROPOSED SUBSTITUTION OF THE SAID THERM RATE IN THE GENERAL SCHEDULE OF SUPPLIES CONTRACT WITH THE WASHINGTON GAS LIGHT CO., AND THE PAYMENT OF BILLS RENDERED ON THE BASIS OF SAID THERM RATE, ARE NOT PROHIBITED BY THE PROVISIONS OF THE ACT OF SEPTEMBER 1, 1916, QUOTED IN YOUR LETTER.