In Formal Case No. 1054, Washington Gas sought a rate increase of approximately $20 million. This case, however, was always about more than just money for WG.

WG was seeking significant changes to traditional public utility regulation in asking for approval of alternative rate mechanisms that would have significantly shifted its business risks from shareholders to ratepayers.

On December 28, 2007, the Public Service Commission of the District of Columbia ("Commission") approved a settlement agreement between the District government, federal government representatives and the Apartment and Office Building Association ("settling parties"). The agreement represents a great victory for District of Columbia natural gas consumers during a time of economic uncertainty. The settlement agreement also represents almost a wholesale abandonment of WG's original rate request.

To start, the settling parties agreed to only a $1.4 million increase over and above WG's current rates. In addition, WG cannot seek an increase in the rates approved in December for three years. WG also agreed to withdraw its request for approval of a Performance Based Ratemaking plan and not seek approval again until after the rate moratorium ends. WG also agreed to withdraw its application for a Revenue Normalization Adjustment until after the Commission issues its initial decision on Pepco's proposed Bill Stabilization Adjustment. Finally, WG agreed to provide the Office of the People's Counsel and the Commission with a number of reports that will assist both OPC and the PSC in monitoring the impact and effect of WG's outsourcing on consumers.

OPC did not sign the settlement, but did not oppose it.