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) January 6, 2000
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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)
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Item 5. Other Events
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Washington Gas Light Company (Washington Gas or the company) announced
that it filed with the Maryland Public Service Commission on January 6, 2000,
an agreement with the Maryland Office of People's Counsel and the Maryland
Public Service Commission Staff on an incentive rate plan.
The agreement, if approved by the Maryland Public Service Commission,
will freeze basic delivery rates at their present levels and insulate Maryland
customers from potential rate increases over the next five years. The agreement
also includes the potential to reduce customers' bills and increase returns to
shareholders through the use of an earnings-sharing mechanism. In addition,
there is a provision for residential heating customers that will reduce
fluctuations in customers' bills due to the effects of weather.
Key points of the agreement include:
- Rates will remain stable for the next five years. The only
adjustments that may occur will be for material changes in costs
due to extraordinary events such as tax rate changes or new
regulatory requirements.
- Earnings in excess of a target return on equity, set initially at
11.4 percent, will be shared equally between Washington Gas and
its firm customers. The target return on equity may be adjusted
annually depending on movements in long-term interest rates. If
the company's return on equity falls below 8.5 percent, an
opportunity to seek limited rate relief will be available up to
the 8.5 percent return on equity.
- A Weather Normalization Adjustment will be established for
residential heating customers that will minimize the annual impact
of weather on the delivery portion of their bills. The adjustment
will smooth out the year-to-year swings in heating costs
experienced by gas customers in years when weather is unusually
colder or warmer than normal.
- A new gas cost incentive mechanism will be put in place to share
increases and decreases in pipeline demand costs between
Washington Gas and customers who purchase gas from the company.
The sharing mechanism replaces a system that passes all costs
through to customers. The sharing mechanism is intended to give
the company additional incentives to pursue vigorously cost
savings in an area that accounts for 10 percent of customers'
bills. The company has the option, but not the obligation, to
terminate the gas cost incentive mechanism under certain
conditions.
- New rate ceilings for the market-based rates charged to
interruptible customers will be established, effectively capping
these rates while providing the company with an incentive to
maximize interruptible throughput and the share of margins it
retains.
- A new flexible firm rate option will be available to economically
encourage new users of natural gas in order to maximize benefits
under the incentive plan.
- The effective date is July 1, 2000, subject to Maryland Public
Service Commission approval.
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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: January 11, 2000 By: /s/ Robert E. Tuoriniemi
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Robert E. Tuoriniemi
Controller
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