UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 25, 1998
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WASHINGTON GAS LIGHT COMPANY
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(Exact name of registrant as specified in its charter)
District of Columbia and Virginia 1-1483 53-0162882
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1100 H Street, N.W., Washington, D.C. 20080
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 750-4440
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NONE
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events
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In those years when Washington Gas Light Company (the Company) does not
request a modification of its basic rates, the Company is required to make a
filing with the State Corporation Commission of Virginia (SCC of VA) that
provides the basis for the Staff of the Commission to make a recommendation to
the SCC of VA on the reasonableness of the Company's rates on a prospective
basis. Such a filing was made by the Company in March 1997 on the basis of its
results of operations for the twelve months ended December 31, 1996. In August
1997, the Staff of the Commission filed a report with the SCC of VA after having
reviewed the Company's most recent filing. Although the Staff report concluded
that the Company earned in excess of the allowed return on equity range granted
by the SCC of VA for the twelve months ended December 31, 1996, it did not
recommend that rates be adjusted on a prospective basis. However, the Staff
concluded that the Company's earnings level in calendar year 1996 had
effectively allowed it to recover certain regulatory assets associated with
losses on reacquired debt that were recorded on the Company's books at December
31, 1996 and thus recommended that these regulatory assets be written off. The
write-off proposed by the Staff amounts to $3.3 million ($2.1 million after
income taxes).
The Company took exception to the Staff's report and both the Company and
Staff participated in a hearing in which the positions of both parties were
presented before a Hearing Examiner. On June 25, 1998, the Hearing Examiner
issued a report recommending that the SCC of VA order the Company to write-off
the portion of the regulatory asset related to losses on reacquired debt that
was incurred during the twelve months ended December 31, 1996. The write-off
proposed by the Hearing Examiner amounts to $0.9 million ($0.6 million after
income taxes.)
The Company continues to believe that the recommendations of the Staff and
those of the Hearing Examiner are not in accordance with the rules that have
been established by the SCC of VA and that they violate the prohibition against
retroactive ratemaking. Additionally, the Company believes the nature of its
regulatory assets at issue in this case differ significantly from those for
which the SCC of VA has adopted similar positions in the past.
If the Hearing Examiner's position is affirmed by an order of the SCC of
VA, the Company believes it would have to charge to expense all of the
regulatory assets related to losses on reacquired debt applicable to Virginia
operations, totaling $3.3 million ($2.1 million after income taxes).
Furthermore, if such an order is issued, without language clarifying the SCC of
VA's position on other regulatory assets, the Company will also need to
determine whether additional regulatory assets associated with Virginia
operations that total approximately $11 million ($7.0 million after income
taxes) as of May 31, 1998 should be charged to expense. The Company will file
comments on the Hearing Examiner's report on July 10, 1998. The Staff of the SCC
of VA also has the opportunity to file comments at the same time.
An order from the SCC of VA accepting, rejecting or modifying the Staff's
and Hearing Examiner's recommendations is expected in the near future. The
Company continues to believe that the regulatory assets recorded on its books
applicable to operations in Virginia are probable of recovery and plans to
continue to pursue appropriate recourse, including litigation, if necessary.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WASHINGTON GAS LIGHT COMPANY
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(Registrant)
Date July 10, 1998 By /s/ Robert E. Tuoriniemi
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Robert E. Tuoriniemi
Controller
