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The Weather Normalization Adjustment (WNA) was filed by Washington Gas in its 2007 rate case, which was subsequently approved by the Virginia State Corporate Commission (SCC).
What is the WNA?
The WNA is designed to reduce the volatility of customers' natural gas bills due to changes in weather conditions. Washington Gas will adjust customers’ annual bills - through the use of a credit or surcharge - to reflect normal, rather than actual, weather conditions from the previous winter heating season (November to May).
How does the WNA work?
The WNA is based on individual customer usage and weather conditions during the prior heating season, as well as historical data calculating "normal" temperatures. Weather conditions that are colder than normal will result in a credit on the bill, as was the case in 2009, 2010 and 2011. Warmer than normal weather conditions will result in a surcharge on the bill, as was the case in 2008 and 2012. Over time, these credits and surcharges should balance out.
Here are scenarios showing how variances from normal weather affect Washington Gas and what role WNA plays:
Weather is Colder Than Normal
When the weather during the winter months is colder than normal, the natural effect is an increase in customers' gas usage and higher customer bills. Because of the WNA, Washington Gas is able to distribute to its customers any excess revenue brought in by the unusually cold weather. Customers benefit from this by receiving WNA credits from the company.
Weather is Warmer Than Normal
When the weather during the winter months is warmer than normal, customers' gas usage and bills tend to be lower - this means a shortfall in the company's revenue. With WNA, Washington Gas is allowed to recover the revenue loss by placing a surcharge on the customer's bill in a form of a WNA charge.
When the weather during the winter season is normal, the WNA will not be applied.
Is the WNA something new that Washington Gas has added to my bill?
No. The SCC approved the Washington Gas WNA in September 2007. Washington Gas has applied the WNA to customer bills each summer since 2008. Each year, the SCC must approve the WNA calculations that Washington Gas files with the Commission.
How is the WNA calculated?
The WNA credit or charge that appears on your bill is not based on your usage during the specific billing month, but rather on normal usage on the account and actual weather conditions from the prior heating season. In years when a credit is due, the credits will appear in total on customers' August bills. In years when a surcharge is needed, Washington Gas may split the charge over three months - beginning in August - in order to reduce the impact.
How does the WNA help?
The WNA provides customers with relief during extremely cold years and Washington Gas with the revenue it needs to recoup fixed costs associated with meter reading, maintenance, postage and safety during extremely warm years.