Potomac residents and River Road corridor businesses will pay more for natural gas starting this month, but far less than Washington Gas wanted.

The Maryland Public Service Commission approved a $38.1 million annual rate increase for Washington Gas Light Company on Monday, July 27, cutting the utility's $82.5 million request by more than half. For the average residential heating customer across Washington Gas's Maryland service territory, which includes Potomac, the ruling adds about $4.01 per month. The new rates took effect Tuesday, July 28.

Washington Gas, which serves all of Montgomery County including Potomac, Travilah and Darnestown, had sought a 10.85% return on equity. The commission approved 9.40%, lower than the company's existing 9.50% rate, and set the overall rate of return at 7.22% on an adjusted rate base of $1.645 billion, the Sentinel reported.

What the PSC cut

The commission rejected $3.2 million of Washington Gas's infrastructure spending request under the STRIDE program, finding the company failed to document consideration of non-pipeline alternatives as required by state law. The PSC also denied the utility's bid to begin recovering costs for a geothermal pilot program that has not been finalized.

In a move that provides near-term relief, the commission shortened the period for returning excess deferred income taxes to customers from 25 years to five years.

"Our primary goal as a Commission is to ensure that rates remain just and reasonable, balancing the utility's need to maintain safe and reliable infrastructure with the critical importance of affordability for Maryland consumers," PSC Chair Kumar Barve said in the commission's July 27 announcement.

Barve, a Rockville resident appointed by Governor Wes Moore in January 2026, previously served 32 years in the Maryland House of Delegates. Commissioner Bonnie A. Suchman, a Potomac resident with more than 35 years of experience in the energy field, also sits on the panel that issued the ruling.

What's next for Potomac businesses

The PSC is launching a Phase II proceeding to address rate design for commercial and industrial customers and to consider removing certain costs from rates under HB 1532, the Utility RELIEF Act. No hearing date has been announced.

That proceeding could directly affect Potomac Village shops and businesses along the River Road corridor that rely on natural gas for heating and cooking. Washington Gas serves roughly 518,000 customers across its Maryland territory in Montgomery, Prince George's, Calvert, Charles, Frederick and St. Mary's counties.

The full Order 92541 is available on the PSC's public docket for Case No. 9849.