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Previous: WASHINGTON GAS LIGHT CO, 10-K, EX-23, 2000-12-18 |
Next: WASHINGTON GAS LIGHT CO, 10-K, EX-10, 2000-12-18 |
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D. C. 20549
FORM
10-K
Annual Report Pursuant
to section 13 or 15(d) of the Securities Exchange Act of 1934
For
the Fiscal Year ended September 30, 2000
Commission File Number 1-1483
Washington Gas Light Company
(Exact name of registrant as specified in its charter)
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
|
Washington, DC 20080 (Address of principal executive offices) |
(Registrant's telephone number, including area code) |
|
|
|
|
|
which registered |
| Common Stock $1.00 par value | New York Stock Exchange
Philadelphia Stock Exchange |
| Preferred Stock, cumulative,
without par value:
$4.25 Series $4.80 Series $5.00 Series |
Philadelphia Stock
Exchange
Philadelphia Stock Exchange Philadelphia Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days, Yes ü No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ü]
The aggregate market value of the voting stock held by
nonaffiliates of the registrant
amounted to $1,199,081,753 as of October 31, 2000.
Common Stock, $1.00 Par Value outstanding as of October 31, 2000: 46,479,536.
PARTS I and II - Annual Report to Shareholders for the fiscal year ended September 30, 2000 (Pages 16 through 51).
PART III - Proxy Statement for the Annual Meeting of Shareholders to be held at 10:00 a.m., March 2, 2001, at the Ronald Reagan Building and International Trade Center in Washington, D.C.
PART IV - Form S-7 Registration Statement number 2-53658, filed May 12, 1975, and Amendment No. 2 thereof, filed June 24, 1975.
TABLE
OF CONTENTS
PART I
PART
II
PART
III
PART
IV
These statements are necessarily based upon various assumptions with respect
to the future, including: 1) economic, competitive, political and regulatory
conditions and developments; 2) capital and energy commodity market conditions;
3) changes in relevant laws and regulations, including tax, environmental
and employment laws and regulations; 4) weather conditions; 5) legislative,
regulatory, and judicial mandates and decisions; 6) timing and success
of business and product development efforts; 7) technological improvements;
8) the pace of deregulation efforts and the availability of other competitive
alternatives; and 9) other uncertainties. Such uncertainties are difficult
to predict accurately and are generally beyond the Company's direct control.
Accordingly, while it believes that the assumptions are reasonable, the
Company cannot ensure that all expectations and objectives will be realized.
All forward-looking statements made in this report rely upon the safe harbor
protections provided under the Private Securities Litigation Reform
Act of 1995.
Washington Gas Light Company (Washington Gas or the Company) is a public utility that delivers and sells natural gas to customers in Washington, D.C. and adjoining areas in Maryland and Virginia. The Company has been engaged in the gas distribution business for 152 years, having been originally incorporated by an Act of Congress in 1848. It became a domestic corporation of the Commonwealth of Virginia in 1953 and a corporation of the District of Columbia in 1957. The following section describes Washington Gas' business as it existed during the fiscal year ending September 30, 2000.
On November 1, 2000, a corporate restructuring occurred in which Washington Gas and its subsidiaries became separate subsidiaries of WGL Holdings, Inc. (WGL Holdings), a newly formed holding company. See Corporate Restructuring on page 5 for additional details.
WASHINGTON GAS LIGHT COMPANY
During the fiscal years ending September 30, 2000, 1999 and 1998, Washington
Gas' regulated operations produced revenues of $1,031 million, $972 million
and $1,041 million, respectively, or 83 percent, 87 percent and 91 percent,
respectively, of the Company's total operating revenues. Serving a region
with a population estimated to be 4.6 million, Washington Gas provided
service to 875,817 customer meters at September 30, 2000. The following
table lists the number of meters served and therms delivered by jurisdiction
as of, and for the twelve months ended, September 30, 2000, respectively.
A therm of gas contains 100,000 British Thermal Units of heat, the heat
content of approximately 100 cubic feet of natural gas.
|
|
September 30, 2000 |
Twelve Months Ended September 30, 2000 |
| District of Columbia
Maryland Virginia |
365,735 366,374 |
790 503 |
| Total |
|
1,607 |
Of the 1,607 million therms delivered in fiscal year 2000, 51 percent was sold and delivered by Washington Gas and 49 percent was delivered to various customers that acquired their gas from other suppliers. Of the total therms delivered by the Company, 69 percent went to firm customers and 31 percent went to interruptible customers. To be eligible to receive interruptible service, customers must be capable of using an alternate fuel as a substitute for natural gas in the event that Washington Gas determines that their service must be interrupted to accommodate firm customers' needs during periods of peak demand.
Hampshire Gas Company (Hampshire) - During fiscal year 2000, Hampshire was a wholly owned subsidiary of Washington Gas. Hampshire operates an underground gas storage field in the vicinity of Augusta, West Virginia under a cost of service tariff regulated by the Federal Energy Regulatory Commission (FERC).
Crab Run Gas Company (Crab Run) - During fiscal year 2000, Crab Run was a wholly owned subsidiary of Washington Gas. Crab Run is an exploration and production company whose assets are managed by an Oklahoma-based limited partnership. At September 30, 2000, Crab Run's investment in this partnership is not material. Crab Run expects that any additional investments it makes in the partnership will be minimal.
Washington Gas Resources Corp. (WGR) - During fiscal year 2000, WGR was a wholly owned subsidiary of Washington Gas under which most of the Company's unregulated subsidiaries, except Crab Run and Primary Investors, were organized. WGR's subsidiaries, which are described below, are American Combustion Industries, Inc. (ACI), WG Maritime Plaza I, Inc., Washington Gas Energy Services, Inc. (WGEServices), and Washington Gas Consumer Services, Inc. WGEServices also has subsidiaries, as described further below.
WG Maritime Plaza I, Inc. (WG Maritime) - In May 1999, the Company announced plans for the development of a 12-acre parcel of land in Southeast Washington, D.C. that it has owned since 1888. The development will be a mixed-use commercial project that is expected to be implemented in five phases. The entire five-phase project will be completed over a five-to-ten year period. Washington Gas will lease its land to ventures that will be established during each phase of the project and the Company will retain a carried interest in the development. This development is being pursued in partnership with Lincoln Property Company, a national developer. None of the subsidiaries of WGL Holdings, including Washington Gas, will make capital investments in this venture or play an active role in any development or management activities. In January 2000, the Company established WG Maritime to hold its interest in the first phase of this development. No expenditures were made by WG Maritime through September 30, 2000, and the Company expects that future expenditures by WG Maritime will not be material.
Washington Gas Energy Services, Inc. -
WGEServices primarily engages in the sale of natural gas in competition
with unregulated gas marketers and unregulated subsidiaries of other utility
companies. At September 30, 2000, WGEServices served approximately 125,000
residential, commercial and industrial customers both inside and outside
the Company's traditional service territory. WGEServices is preparing to
sell electricity to customers who participate in electric choice programs
as profitable opportunities develop. At September 30, 2000, WGEServices
had the two subsidiaries described below. Effective October 1, 2000, both
subsidiaries became wholly owned subsidiaries of WGR.
Brandywood Estates, Inc. (Brandywood) -
Brandywood is a general partner with another major developer, in a venture
designed to develop 1,600 acres in Prince George's County, Maryland for
sale or lease. This acreage was contributed to the Brandywood Development
Limited Partnership by Brandywood in 1992. In March 1996, the partnership
submitted to Prince George's County a rezoning application for 790 acres
of its property. The mixed-use development plan proposed approximately
1,600 homes, 100,000 square feet of retail space and 105,000 square feet
of office space. In 1999, the rezoning application was remanded to a zoning
hearing examiner for additional review. No date has been set for a final
decision on this application and any action on it is not imminent. Effective
May 31, 2000, Brandywood Estates, Inc., merged into Advanced Marketing
Concepts, Inc. (AMC), an inactive subsidiary, with AMC being the surviving
corporation. Subsequently, the name of AMC was changed to Brandywood Estates,
Inc., which is a Delaware Corporation.
At the November 1, 2000 restructuring, shares of WGL Holdings common stock
equal the same number of shares of Washington Gas common stock immediately
prior to the restructuring. Each Washington Gas shareholder also received
an equal number of WGL Holdings shares. All serial preferred stock issued
by Washington Gas remains issued and outstanding as shares of Washington
Gas serial preferred stock. The dividend rate for the preferred stock has
not been changed and those dividends will continue to be paid by Washington
Gas. All outstanding indebtedness and other obligations of Washington Gas
prior to the restructuring remain outstanding as obligations of Washington
Gas. Holders of Washington Gas medium-term notes (MTNs) continue as security
holders of Washington Gas.
On November 1, 2000, WGL Holdings had no outstanding securities other than common stock, but it could issue other securities in the future. WGL Holdings common stock is listed only on the New York Stock Exchange, while Washington Gas preferred stock continues to be listed only on the Philadelphia Stock Exchange. Both common and preferred shares are listed under the "WGL" ticker symbol on their respective exchanges.
The consolidated financial statements and the associated notes thereto included in pages 31-51 of the Washington Gas Light fiscal year 2000 Annual Shareholders' Report, which is included in Exhibit 13, were based upon the corporate organizational structure that was in place during the three fiscal years ended September 30, 2000. As previously discussed, the corporate reorganization became effective on November 1, 2000. However, had the reorganization occurred on September 30, 2000, the WGL Holdings' consolidated financial statements and associated notes thereto would have been virtually identical to those reported in these financial statements and notes thereto.
For fiscal year 2000, Washington Gas reports four operating segments: 1) regulated utility; 2) retail energy marketing; 3) HVAC; and 4) consumer financing. The overwhelming majority of Washington Gas' consolidated assets were devoted to, and revenues were derived from, the regulated utility and the retail energy marketing segments. Going forward, WGL Holdings expects this to continue. However, it does plan to increase the significance of the other segments. Each segment is described below:
Retail Energy Marketing - WGEServices competes with unregulated marketers by selling natural gas and electricity directly to residential, commercial and industrial customers, both inside and outside of the regulated utility's traditional service territory. During the fiscal years ending September 30, 2000, 1999 and 1998, the energy marketing segment produced operating revenues from the sales of natural gas of $167 million, $104 million and $83 million, respectively, or 13 percent, 9 percent and 7 percent, respectively, of the Company's total operating revenues. Electricity sales began in October 2000, and, thus, produced no operating revenues in fiscal year 2000.
HVAC - Through its wholly owned subsidiaries, WGESystems and ACI, and as an investor in Primary Investors, Washington Gas has offered residential and commercial customers a variety of products and services primarily associated with the design, renovation, sale, installation and service of mechanical HVAC systems. During the fiscal years ending September 30, 2000, 1999 and 1998, the Company's commercial HVAC segment produced operating revenues of $47 million, $31 million and $14 million, respectively, or 4 percent, 3 percent and 1 percent, respectively, of the Company's total operating revenues. During the fiscal year ending September 30, 2000, the Company's 50 percent equity investment in Primary Investors resulted in a $1.7 million loss. Fiscal year ending September 30, 2000, was the first full year of operations for Primary Investors. At September 30, 2000 and 1999, the HVAC segment had a backlog of orders of $67.4 million and a $15.3 million, respectively, which the Company believes to be firm orders. Of the backlog outstanding at September 30, 2000, the Company believes that $33.9 million will not be filled within fiscal year 2001. There are no significant seasonal or other material aspects associated with this backlog.
Consumer Financing - Washington Gas has offered financing for customers to purchase natural gas appliances and other energy-related equipment. During the fiscal years ending September 30, 2000, 1999 and 1998, the consumer financing segment produced operating revenues of $3 million, $4 million and $3 million, respectively, or less than 1 percent of the Company's total operating revenues during each of these three years.
Washington Gas is regulated by the Public Service Commission of the District of Columbia (PSC of DC), the Public Service Commission of Maryland (PSC of MD) and the SCC of VA. The FERC regulates Hampshire. See the following section, General Regulatory Matters, for a discussion of general regulatory issues and initiatives. See Jurisdictional Rates and Regulatory Matters, which begins on page 8, for detail regarding the individual commissions and a discussion of recent regulatory proceedings.
Throughout the Washington Gas franchise area, all interruptible customers and approximately half of the Company's firm customers may choose to purchase their gas from an array of third-party marketers, such as WGEServices. Washington Gas continues to charge these customers to deliver natural gas through its distribution system. The status of the unbundling programs in the Company's major jurisdictions as of September 30, 2000, is discussed further in Competition, which begins on page 12 of this report.
WGEServices sells natural gas, as a third-party marketer, to both firm and interruptible customers in each Washington Gas jurisdiction. WGEServices also sells natural gas in both Maryland and Virginia in regions that are outside of the regulated utility's jurisdictional service area in those states. WGEServices retains the full amount of margins generated on sales of the natural gas commodity, but also has the potential to incur a loss from the sales of this commodity.
The firm tariff provisions in each Washington Gas jurisdiction contain gas cost recovery mechanisms that provide for the recovery of the invoice cost of gas applicable to firm customers. Under these mechanisms, firm customers' rates are adjusted periodically to reflect increases and decreases in the invoice cost of gas. Moreover, the regulators in each jurisdiction provide for an annual reconciliation of gas costs collected from firm customers to the applicable invoice cost of gas paid to suppliers.
The following sections describe each regulatory commission and the processes they use to set the Company's rates. These sections also discuss the most recent rate increases and other ongoing regulatory activity that could potentially affect the Company's rates and/or operations.
There is no statutory suspension period related to rate requests.
Effective August 1, 1994, the PSC of DC approved a Stipulation and Agreement signed by a majority of the parties to a rate case filed in January 1994, providing for a $6.4 million annual revenue increase (or 3.4 percent). The agreement did not specify a rate of return. The agreement provided for an increase in the curtailment charge to interruptible customers during periods of interruption and established the previously discussed peak-usage charge for non-residential firm customers.
On February 28, 2000, Washington Gas submitted an "Answer" to the PSC of DC requesting the dismissal of the OPC complaint chiefly on the grounds that the OPC's analysis of the Company's rates was substantively flawed. The Company has responded to questions made by the PSC of DC Staff (Staff) and met with Staff to review these responses and to answer their follow-up questions.
On May 12, 2000, the OPC filed a motion requesting leave to reply to Washington Gas' Answer and a reply to the Company's Answer, asserting that Washington Gas' Answer failed to demonstrate that a rate investigation is unnecessary and once again asked the PSC of DC to open an investigation.
On May 22, 2000, Washington Gas submitted a "Response" urging the Commission to dismiss the OPC Motion. The Company's Response charged that the OPC motion contained no new information, violated PSC of DC policy and prejudiced both the Company and District of Columbia customers. All matters-the OPC Complaint, Washington Gas' Answer, the OPC Motion and the Company's Response-are under review by the PSC of DC. No specific timeline has been established for the PSC of DC to render its final decision on this matter.
The Company is required to give 30 days' notice when filing for a rate increase. The PSC of MD may initially suspend the proposed increase for 150 days beyond the 30-day notice period and then has the option to extend the suspension for an additional 30 days. If action has not been taken after 210 days, rates may be placed into effect subject to refund.
In October 1994, the PSC of MD approved an unopposed Stipulation and Agreement, signed by a majority of the parties to a June 1994 rate case. The Stipulation and Agreement, designed to collect an additional $7.4 million (2.4 percent) annually, went into effect on December 1, 1994.
On October 19, 2000, the PSC of MD issued an Order that declined to approve the agreement. The PSC of MD Order noted a number of positive aspects of the Settlement Agreement. The Order stated that the record was not sufficient to demonstrate that rates would be just and reasonable throughout the five-year term. On November 6, 2000, Washington Gas filed a Request for a Rehearing of the PSC of MD's Order. The Rehearing Request cited the numerous features of the Settlement that enhanced, rather than diminished, the PSC of MD oversight responsibilities, as well as the extensive record evidence and past PSC of MD precedence on the subject.
Either of two methods may be used to request a modification of existing rates. First, the Company may file a general rate application through an adjudicated process. The rates under this process may take effect 150 days after the filing. Second, an Expedited Rate Case (ERC) procedure is available which provides that rate increases may take effect 30 days after the filing date. Under the ERC mechanism, the Company may not propose any changes in accounting policies and the allowed rate of return on common equity cannot be modified from the rate established in the last fully adjudicated case. Before new rates become final, both types of rate increases are subject to refund.
In December 1997, Shenandoah implemented new rates in Virginia designed to recover an additional $2.3 million annually, based on a rate case filed in August 1997. On July 16, 1998, the SCC of VA issued an order approving an increase in annual revenues of $1.4 million, or 6.78 percent, effective December 28, 1997. The order included a 9.062 percent overall rate of return and a 10.70 percent return on equity. Shenandoah refunded amounts associated with the difference between the interim rates that were collected subject to refund and the amount approved by the SCC of VA, with interest, by November 1, 1998. As previously discussed, Shenandoah was merged into Washington Gas, on April 1, 2000,. In compliance with the order issued by the SCC of VA, Shenandoah is continuing to operate as a separate division under the same rates that were in place at the time of the merger.
Management's Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated by reference into this report, provides a table summarizing Washington Gas' major rate applications and results thereof.
Historically, the Company has generally maintained a price advantage over electricity in its service area. Recent increases in the price of the natural gas commodity have altered this situation somewhat. However, the company believes natural gas prices are experiencing the effects of a temporary imbalance between supply and demand and should ultimately result in natural gas prices settling at more traditional levels. Furthermore, as discussed below, restructuring in both the natural gas and electric industries is leading to changes in traditional pricing models. As part of the electric industry restructuring effort, certain business segments are moving toward market-based pricing, with third-party marketers of electricity participating in retail markets. Electric restructuring may result in lower comparative pricing for electric service and other alternative energy sources, including natural gas. These changes will result in increased competition for the Company.
In the interruptible market, customers must be capable of using a fuel other than natural gas when demand by the Company's firm customers peaks. Fuel oil is the most significant competing energy alternative to natural gas. The Company's success in this market depends largely on the relationship between gas and oil prices. Because the natural gas marketplace is primarily domestic, the relationship between supply and demand generally has the greatest impact on natural gas prices. Because a large portion of oil comes from foreign sources, political events can have significant influences on oil prices.
The Company expects that local regulatory commissions will continue to set the prices and terms for delivery service, which give Washington Gas an opportunity to earn a fair rate of return on the capital invested in its distribution system and to recover reasonable operating expenses. The Company plans to continue constructing, operating and maintaining its natural gas distribution system.
The Company does not foresee any near-term changes in the regulated utility's risk profile. Since the regulated utility passes the cost of the natural gas commodity to customers, the profitability of its regulated operations is unaffected when natural gas commodity prices rise or fall or when customers choose to purchase the natural gas commodity from third-party marketers.
|
at September 30, 2000 |
|||
|
|
|
|
|
|
|
% Participating | ||
| District of
Columbia |
Firm:
Residential Commercial Interruptible |
129,875
13,584 249 |
33% 47% |
| Maryland | Firm:
Residential Commercial Interruptible |
200,000
27,170 289 |
41% 100% |
| Virginia | Firm:
Residential Commercial Interruptible |
68,500
5,600 255 |
91% 82% |
| Total |
445,522
|
|
|
On November 1, 2000, the PSC of MD removed an enrollment cap on the Washington Gas residential customer choice program. Customer choice is now available to all Washington Gas customers in Maryland. On October 18, 2000, the SCC of VA issued an order granting the Company's request to extend the pilot program from January 1, 2001, until such time as the SCC of VA acts on a current application by the Company to expand the current program. As part of its order, the SCC of VA increased the participation levels for each customer class by 10% above the currently authorized eligibility levels shown in the above table.
Ultimately, the Company expects the regulated utility will play a much smaller role in the merchant function and may eventually exit the merchant function as customers buy natural gas from unregulated marketers. During this transition period, Washington Gas continues to have certain obligations under long-term contracts to purchase natural gas from producers and transportation capacity from interstate pipeline companies (see Note 13-Contingencies and Commitments to the Notes to the Consolidated Financial Statements of the Company's 2000 Annual Report to Shareholders, which is incorporated by reference into this report). Accordingly, the strategy of Washington Gas focuses on recovering contractual costs and maximizing the value of contractual assets.
Currently, the regulated utility includes the cost of the natural gas commodity and pipeline services in the purchased gas costs that it includes in firm customers' rates, subject to regulatory review. The Company's jurisdictional tariffs contain gas cost mechanisms that allow it to recover the invoice cost of gas applicable to firm customers. The Company believes it prudently entered into its gas contracts and that the costs being incurred should be recoverable from customers. If future unbundling or other initiatives remove the current gas cost recovery provisions, the Company could suffer adverse impacts to the extent it incurs non-competitive gas costs with no other satisfactory regulatory mechanisms available to recover any costs that may exceed market prices.
The Company currently has recovery mechanisms for such potentially stranded costs in Maryland and the District of Columbia. In fiscal year 2000, the State of Virginia enacted legislation to allow utilities a similar recovery mechanism. Washington Gas submitted a request to the SCC of VA to allow it to include such a recovery mechanism in its tariff provisions, similar to existing mechanisms in Maryland and the District of Columbia. A decision by the SCC of VA on the Company's current request is pending.
Washington Gas actively manages its supply portfolio to ensure that its sales and supply obligations remain balanced. If the Company were to determine that competition or changing regulation would preclude it from recovering these costs in rates, these costs would be charged to expense without any corresponding revenue recovery. If this situation were to occur and depending upon the timing of the occurrence, the impact on the Company's financial position and results of operations would likely be significant. In the event that a regulatory body disallows the recovery of such costs, these costs would be borne by shareholders.
To minimize its exposure to contracting risks, Washington Gas is not generally renewing expiring long-term gas commodity and pipeline transportation and storage contracts at the present time. As these contracts expire, the Company enters into flexible short-term purchasing arrangements to meet demand. This strategy mitigates the Company's exposure to long-term commitments, while ensuring reliable and competitively priced gas for customers that continue to buy the natural gas commodity from the regulated utility. To maximize the value of its contractual assets, the Company has entered into contracts with unregulated marketers that make use of the Company's firm storage and transportation rights to meet the Company's city gate delivery needs and to make off-system sales when such storage and transportation rights are underutilized. The Company continues to pay the fixed charges associated with the firm storage and transportation contracts used to make sales.
Recognizing the opportunities presented by competition, the Company established WGEServices, an unregulated retail energy marketing subsidiary, in 1997. To date, WGEServices has grown to serve nearly 125,000 residential, commercial and industrial natural gas customers both inside and outside of the Washington Gas service area. Gross revenues in fiscal year 2000 were $166.7 million and net income was $0.5 million. The Company believes that customer choice programs will continue to expand, as well as customers' selection of WGEServices as a service provider.
The regulatory process tends to stabilize rates and revenues. However, there can be significant volatility for unregulated third-party marketers, such as WGEServices. Thus, while WGEServices has a significant potential for continued growth, it must carefully manage risks in a volatile commodity market.
WGEServices competes with other third-party marketers to sell the unregulated natural gas commodity to customers. Marketers of the natural gas commodity compete largely on price and gross margins are relatively small. Furthermore, as with any startup, customer acquisition costs are high. Consequently, operating margins for WGEServices are lower than those earned by the regulated utility.
In addition, WGEServices faces supply-side risks. To minimize its supply-side risks, WGEServices' strategy is to manage its natural gas contract portfolio in a manner that closely aligns the volumes of gas it purchases with firm commitments from customers to purchase this gas. WGEServices purchases its gas from a number of wholesale suppliers in order to avoid relying on any single provider for its natural gas supply. Similarly, WGEServices' dependency on any one customer or group of customers is limited.
In anticipation of these new opportunities, WGEServices entered into a master purchase and sale agreement in April 2000 with a wholesale energy marketer. Under the agreement, as WGEServices identifies profitable opportunities, it purchases electric energy, capacity and certain ancillary services from the wholesaler for resale to retail electricity customers. As jurisdictions introduce electricity customer choice programs, WGEServices evaluates the associated profit potential and other strategic factors. When advantageous, WGEServices markets electricity and enrolls customers. At September 30, 2000, the company had enrolled 4,000 retail electricity customers in Virginia and Maryland, with service which began on November 1, 2000. In addition, WGEServices has been awarded a $33.5 million, 18-month contract to begin supplying electricity to Montgomery County, Maryland government agencies beginning on December 1, 2000.
To maintain its competitive position, the Company continues to improve quality and efficiency and to reduce costs with the goal of achieving market-level performance. As the functions become unbundled, the Company will continue to review its role in that marketplace.
Washington Gas arranges to have natural gas delivered to the entry points of its distribution systems (city gates) using the delivery capacity of interstate pipelines companies. Washington Gas acquires natural gas delivery and storage capacity on a system-wide basis because of the integrated nature of the service agreements between the pipelines and its distribution operations. Washington Gas' supply and capacity plan is based on the system requirements and takes into account estimated load growth by type of customer, as well as customer attrition, conservation and movement of customers from bundled to unbundled service.
Pursuant to FERC Order No. 636, the pipeline companies are required to provide transportation and storage services to gas shippers, such as Washington Gas, that are comparable to the services it received prior to the implementation of the order. At September 30, 2000, the Company had service agreements with four pipeline companies that serve the Company directly and two upstream pipelines that provide for firm transportation and storage services. These contracts have expiration dates ranging from fiscal years 2001 to 2015.
Washington Gas is responsible for acquiring sufficient gas supplies to meet customer requirements, as well as the appropriate pipeline capacity to ensure delivery to its distribution system. Washington Gas' contracting activities take into account the continuing trend toward unbundling the sale of the gas commodity from the delivery of the commodity to the customer, by entering into flexible short-term agreements for supply and capacity levels that will allow it to remain competitive. Washington Gas has adopted a diversified portfolio approach designed to satisfy the supply and deliverability requirements of its customers, using multiple supply points, dependable transportation and storage arrangements and its own substantial storage and peaking capabilities to meet its customers' demands.
Washington Gas has eight long-term natural gas supply contracts with producers and marketers that expire between fiscal years 2001 and 2003. Under these contracts, Washington Gas can purchase up to 48.9 million dekatherms of natural gas per year. The Company acquires the balance of its supplies at market prices under shorter-term contracts.
As reflected in the first table below, there were six sources of delivery through which the Company received natural gas at its city gates to satisfy the sendout requirements in pipeline year 2000 (November 1, 1999 through October 31, 2000) and from which supplies can be received in pipeline year 2001 (November 1, 2000 through October 31, 2001). Firm transportation denotes gas transported directly to the entry point of the Company's distribution system in volumes agreed upon by the Company and the applicable pipeline. Transportation storage denotes volumes stored by a pipeline for withdrawal during the heating season. Peak load requirements are met by: 1) underground natural gas storage at the Hampshire storage field in Hampshire County, West Virginia; 2) the local production of propane air plants located at Company-owned facilities in Rockville, Maryland (Rockville Station) and in West Springfield, Virginia (Ravensworth Station); and 3) other storage and peak-shaving arrangements. Unregulated third-party marketers acquire interstate pipeline capacity and the natural gas commodity on behalf of Washington Gas' regulated utility customers. These marketers have natural gas delivered to the entry point of the Company's delivery system on behalf of those utility customers that have decided to acquire the natural gas commodity on an unbundled basis as previously discussed.
During pipeline year 2000, total sendout on the system was 1,432 million
therms, excluding the sendout of sales and deliveries of natural gas used
for electric generation. The sendout for pipeline year 2001 is estimated
to be 1,570 million therms (based on normal weather), excluding the sendout
for
the sales and deliveries of natural gas used for electric generation. The
sources of delivery and related volumes that were used to satisfy the requirements
of pipeline year 2000 and those projected for pipeline year 2001 are shown
in the following table.
|
ANNUAL SENDOUT (Millions of Therms) |
||
|
Delivery |
|
|
|
|
|
|
| Firm Transportation |
552
|
580
|
| Transportation Storage |
282
|
149
|
| Hampshire Storage |
8
|
20
|
| Company-Owned Propane-Air Plants |
2
|
4
|
| Other Peak-Shaving Sources |
8
|
58
|
| Unregulated Third-Party Marketers |
580
|
759
|
| Total |
1,432
|
1,570
|
The effectiveness of the Company's gas supply program is largely dependent
on the sources from which the design day requirement is satisfied. A design
day is the maximum anticipated demand on the gas supply system during a
24-hour period assuming a 5 degree Fahrenheit average temperature. The
Company assumes that all interruptible customers will be curtailed on the
design day. The Company's current design day is 14.8 million therms and
the Company's projected sources of delivery for design day sendout is 15.9
million therms. This provides a reserve margin of 7.4%. The Company is
currently capable of meeting 71 percent of its design day requirements
with storage and peaking capabilities. Emphasizing storage and peaking
facilities on the Company's design day reduces the necessity to purchase
firm transportation, the most expensive form of capacity from a design
day perspective. The following table reflects the sources of delivery that
are projected to be used to satisfy the design day sendout estimate for
pipeline year 2001.
|
DESIGN DAY SENDOUT (Millions of Therms) |
||
|
Delivery |
|
|
|
|
|
|
| Firm Transportation |
3.4
|
21%
|
| Transportation Storage |
5.0
|
31%
|
| Company-Owned Propane-Air Plants,
Hampshire Storage and Other Peaking |
6.3
|
40%
|
| Unregulated Third-Party Marketers |
1.2
|
8%
|
| Total |
15.9
|
100%
|
Washington Gas believes the combination of the gas supply it can purchase under short-term and long-term contracts, its peaking supplies and the capacity on the pipelines required to deliver the purchased supplies is sufficient to satisfy the needs of existing customers and allow for growth in future years. In the event that unregulated third-party marketers are unable to deliver the quantities indicated above, Washington Gas believes it has the ability to enter the interstate market to secure sufficient capacity to make up any such third-party marketer shortfalls. Washington Gas continues to seek opportunities to restructure existing contracts to maximize the competitiveness of its gas supply portfolio.
The Company and its subsidiaries are subject to federal, state and local laws and regulations related to environmental matters. These evolving laws and regulations may require expenditures over a long timeframe to control environmental impacts.
Estimates of liabilities for environmental response costs are difficult to determine with precision because of the factors that can affect their ultimate level. These factors include, but are not limited to: 1) the complexity of the site; 2) changes in environmental laws and regulations at the federal, state and local levels; 3) the number of regulatory agencies or other parties involved; 4) new technology that renders previous technology obsolete or experience with existing technology that proves ineffective; 5) the ultimate selection of technology; 6) the level of remediation required and 7) variations between the estimated and actual number of years that must be devoted to respond to an environmentally contaminated site.
The Company has identified up to ten sites where Washington Gas, its subsidiaries, or their predecessors may have operated manufactured gas plants (MGPs). The Company last used any such plant in 1984. In connection with these operations, the Company is aware that certain by-products of the gas manufacturing process are present at or near some former sites and may be present at others. Washington Gas has identified the presence of coal tar and certain other by-products on or near some of the sites. The Company does not believe that any of the sites present any unacceptable risk to human health or the environment.
At one of the former MGP sites, studies show the presence of coal tar under the site and an adjoining property. The Company has taken steps to control the movement of contaminants into an adjacent river by installing a water treatment system that removes and treats contaminated groundwater at the site. The Company received approval from governmental authorities for a comprehensive remedial plan for the majority of the site that will allow commercial development of the Company's property. The Company has entered into an agreement with a national developer for the development of this site in phases. The Company has also entered into a ground lease and obtained a carried interest for the first phase. Construction has begun on this development. The Company continues to seek approval of a remedial plan for the remainder of the site, including an adjoining property owned by a separate entity.
At a second former MGP site, a local government has notified Washington Gas about the detection of a substance in an adjacent river that may be related to this site. This same local government owned and operated the MGP for the majority of the life of the plant. The local government sold the MGP to a company that was subsequently merged into Washington Gas. Washington Gas retired the MGP many years ago. In addition, the Company knows that the local government has had communications about this condition with federal environmental authorities. At this time, the extent and nature of the contamination and the Company's potential obligation, if any, have not been determined. Washington Gas has discussed with the local government the Company's potential contributions, if any, to study and remediate the site.
At a third former MGP site and on an adjacent parcel of land, the Company has applied for the state voluntary closure program, which will require some additional study to determine ultimate resolution.
The Company believes, at this time, that appropriate remediation is being undertaken or that no remediation is necessary at the remaining seven sites.
Through September 30, 2000, the Company had paid $11.4 million for environmental response costs. The Company has recorded a liability of $8.3 million on an undiscounted basis at September 30, 2000, related to future environmental response costs. This estimate principally includes the minimum liabilities associated with a range of environmental response costs expected to be incurred at five of the sites, including the first site described above. The Company estimates the maximum liability associated with all of its sites to be approximately $22.3 million at September 30, 2000. The estimates were determined by the Company's environmental experts, based on experience in remediating MGP sites and advice from legal counsel and environmental consultants. Variations within the range of estimated liability result primarily from differences in the number of years that will be required to perform environmental response processes at each site (2 to 25 years) and the extent of remediation that may be required.
Regulatory orders issued by the PSC of MD allow the Company to recover the costs associated with the sites applicable to Maryland over periods ranging from five to thirty years. Rate orders issued by the PSC of DC allow the Company a three-year recovery of prudently incurred environmental response costs and allow the Company to defer additional costs incurred between rate cases. At September 30, 2000, there was no environmental regulatory asset subject to recovery in Virginia. At September 30, 2000, the Company reported a regulatory asset of $6.4 million for the portion of environmental response costs it believes recoverable in rates. Based on existing knowledge, the Company does not expect that the ultimate impact of these matters will have a material adverse effect on its capital expenditures, its earnings or its competitive position.
The Company is not dependent upon a single customer or a few customers such that the loss of any one or more of such customers would have a significant adverse effect on the Company. Large customers are generally on interruptible rate schedules, and margin-sharing arrangements limit the effects of variations in interruptible customer usage on net income. As shown on page 3, the Company served 875,817 customer meters at September 30, 2000.
The Company's utility business is weather-sensitive and seasonal since the majority of its business is derived from residential and small commercial customers who use natural gas for space heating purposes. In fiscal year 2000, approximately 75 percent of the total therms delivered in the Company's franchise area, excluding deliveries for electric generation, occurred in the Company's first and second fiscal quarters. All of the Company's utility earnings are generated during these two quarters and the Company historically incurs losses in the third and fourth fiscal quarters. The timing and level of approved rate increases can affect the results of operations. The seasonal nature of the Company's business creates large variationsin short-term cash requirements, primarily due to fluctuations in the level of customer accounts receivable, accrued utility revenues and storage gas inventories. The Company finances these seasonal requirements primarily through the sale of commercial paper and unsecured short-term bank loans.
Note 4-Short-Term Debt to the Notes to Consolidated Financial Statements of the Company's 2000 Annual Report to Shareholders, which is incorporated by reference into this report, discusses the Company's short-term borrowings.
The Company belongs to the Natural Gas Vehicle Coalition, which develops
new applications and technologies for using natural gas. In addition,
during fiscal year 2000, the Company contributed to the Institute of Gas
Technology (IGT), which also developed new applications and technologies
for using natural gas and the Gas Research Institute (GRI), which focused
on developing more efficient gas equipment and increasing the long-term
supply of gas. During fiscal year 2000, IGT and GRI were merged into
a single organization named the Gas Technoloty Institute. The cost
of these memberships and the Company's own research and development costs
during fiscal years 2000, 1999 and 1998 were not material.
At September 30, 2000, the Company and its wholly owned subsidiaries had
2,048 employees, a decline of 69 employees from the level at September
30, 1999. At September 30, 2000, there were 1,834 utility employees, a
decline of 97 employees from the level at September 30, 1999. Page 29 of
the Management's Discussion of Financial Condition and Results of Operations
of the Washington Gas 2000 Annual Report to Shareholders, included
in Exhibit 13 in this report and incorporated by reference into this Item,
discusses major contracts ratified by the membership of the Company's labor
unions.
ITEM
2 - PROPERTIES
At September 30, 2000, Washington Gas and its subsidiaries held such valid franchises, certificates of convenience and necessity, licenses and permits necessary to maintain and operate their respective properties and businesses, as currently conducted. The Company has no reason to believe that it will be unable to renew any of such franchises as they expire.
Property, plant and equipment is stated at original cost, including labor,
materials, taxes and overhead. The Company calculates depreciation applicable
to its gas plant in service primarily on a straight-line remaining life
basis. The composite depreciation rate during fiscal year 2000 was 2.94%.
The following table discloses the depreciable life of natural gas plant,
by category at September 30, 2000.
|
at September 30, 2000 |
|
|
Gas Plant in Service |
|
| Intangible Plant |
|
| Tangible Plant:
Natural Gas Storage and Processing Plant Transmission Plant Distribution Plant General Plant |
30-55 years 10-55 years 10-50 years |
| Total Tangible Plant in Service |
|
At September 30, 2000, the regulated utility segment had approximately 611 miles of transmission mains, 10,257 miles of distribution mains, and 12,076 miles of distribution services. The Company has the capacity for storage of approximately 15 million gallons of propane for peak shaving.
The Company owns the land and a 12-story office building (built in 1942) at 1100 H Street, NW, Washington, D.C. 20080, where its corporate offices are located. The Company owns the land and a building (built in 1970) at 6801 Industrial Road in Springfield, Virginia 22151, which houses the Company's operating offices and certain administrative functions. The Company has title to land and buildings used as substations for its utility operations.
The Company owns a 12-acre parcel of land located in Southeast Washington, D.C. The Company operated a manufactured gas plant at this site until 1984. The Company has entered into an agreement with a national developer for the development of this site in phases. See the discussion regarding WG Maritime, which begins on page 4, and Environmental Matters, which begins on page 19 for additional information regarding this development.
The Company also has peaking facilities consisting of propane air plants in West Springfield, Virginia (Ravensworth Station), and Rockville, Maryland (Rockville Station). Hampshire operates an underground natural gas storage field in Hampshire County, West Virginia. Hampshire accesses the storage field through 12 storage wells that are connected to an 18-mile pipeline gathering system. Hampshire also operates a compressor station for injection of gas into storage. For pipeline year 2001, it is projected that the Hampshire storage facility can supply approximately 2.0 billion cubic feet of natural gas to the parent company's system for meeting seasonal demands.
The Mortgage of Washington Gas dated January 1, 1933 (Mortgage), as supplemented and amended, securing any First Mortgage Bonds (FMBs) it issues, constitutes a direct lien on substantially all property and franchises owned by the regulated utility other than expressly excepted property. At September 30, 2000, no FMBs were outstanding under the Mortgage.
The Company executed a supplemental indenture to its unsecured MTN Indenture on September 1, 1993, providing that the regulated utility will not issue any FMBs under its Mortgage without making effective provision whereby any outstanding MTNs shall be secured equally and ratably with any and all other obligations and indebtedness secured by the Mortgage.
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of the executive officers of the Registrant
at September 30, 2000, are listed below along with their business experience
during the past five years. The age of each officer listed is as of the
date of filing of this report. There is no family relationship among the
officers.
|
|
|
|
Position with the Company |
or Appointed |
| Elizabeth M. Arnold, Age
48 (1,2)
Vice President (corporate strategy and non-utility businesses) Vice President (corporate strategy, internal audit, unregulated subsidiaries) Vice President (corporate strategy and internal audit) Treasurer |
March 3, 2000 January 31, 1996 May 1, 1993 |
| Beverly J. Burke, Age 49
(1)
Vice President and Assistant General Counsel Department Head - Office of the General Counsel Managing Attorney - Litigation |
January 22, 1997 November 16, 1992 |
| Adrian P. Chapman, Age 43
(1)
Vice President (regulatory affairs and energy acquisition) Department Head, Regulatory Affairs Director of Maryland Rates and Regulatory Affairs |
December 31, 1996 February 7, 1994 |
| Richard J. Cook, Age 58
(1)
Vice President (construction and technical support) Executive Assistant |
October 1, 1995 |
| James H. DeGraffenreidt,
Jr., Age 47 (1,2)
Chairman of the Board, President and Chief Executive Officer Chairman of the Board and Chief Executive Officer President and Chief Executive Officer President and Chief Operating Officer |
December 1, 1998 January 1, 1998 December 1, 1994 |
| Shelley C. Jennings, Age
52 (1,2)
Treasurer Department Head, Customer Accounts Area Head, Procurement Director, Accounting Operations |
December 1, 1997 December 16, 1996 January 24, 1994 |
| John K. Keane, Jr. Age 62
(1,2)
Senior Vice President and General Counsel |
|
| Frederic M. Kline, Age 49
(1,2)
Vice President and Chief Financial Officer Vice President, Treasurer and Chief Financial Officer Vice President and Treasurer Controller |
October 1, 1998 January 31, 1996 November 27, 1985 |
| Terry D. McCallister, Age
45 (1,3)
Vice President (operations and gas transportation) Vice President (operations) |
March 3, 2000 |
| Lisa M. Metcalfe, Age 36
(4)
Vice President and Chief Information Officer |
|
| Douglas V. Pope, Age 55
(1,2)
Secretary |
|
| Roberta W. Sims, Age 46
(1)
Vice President (corporate relations and communications) Vice President and General Manager - District of Columbia Division |
October 1, 1992 |
| Robert A. Sykes, Age 52 (1)
Vice President - Human Resources |
|
| Robert E. Tuoriniemi, Age 44 (1,2,5)
Controller |
|
| James B. White, Age 50 (1)
Vice President (business development) Vice President and General Manager - Virginia Division |
May 1, 1993 |
| (1) This officer has served continuously
since the dates indicated.
(2) This officer is also an Executive Officer of WGL Holdings. (3) Mr. McCallister was previously employed by Southern Natural Gas Company, a subsidiary of Sonat, Inc., where he served as Vice President and Director of Operations. Prior to working for Southern Natural Gas Company, a gas utility, Mr. McCallister held various leadership positions with Atlantic Richfield Company, a fully integrated international oil and gas exploration, production, refining and marketing company. (4) Effective November 9, 2000, Ms. Metcalfe resigned from Washington Gas. Prior to that time Ms. Metcalfe served continuously since the date indicated. Before joining Washington Gas, Ms. Metcalfe was employed by the National Wildlife Federation and served most recently as Vice President of Constituent Systems and Services. (5) Mr. Tuoriniemi was previously employed by Central Maine Power Company, an electric utility, and served most recently as Comptroller. In the Comptroller position, Mr. Tuoriniemi's responsibilities included all accounting matters, testifying before regulatory commissions in rate case proceedings, directing tax planning and coordinating financial reporting activities. |
|
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information captioned Common Stock Price Range and Dividends Paid and presented on page 51 of the Washington Gas 2000 Annual Report to Shareholders is included in Exhibit 13 in this report and incorporated by reference into this Item. Only owners of record are counted as common shareholders.
ITEM 6 - SELECTED FINANCIAL DATA
Page 17 of Washington Gas' 2000 Annual Report to Shareholders
titled Selected Financial and Operations Data is included in Exhibit
13 in this report and is incorporated by reference into this Item. Consolidated
revenues for the five most recent fiscal years are summarized in the following
table.
|
September 30, |
Revenues ($000) |
|
|
$1,249
|
|
|
1,112
|
|
|
1,143
|
|
|
1,101
|
|
|
973
|
ITEM 7-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Page 16 and pages 18 through 30 of the Washington Gas 2000 Annual Report to Shareholders are included in Exhibit 13 in this report and are incorporated by reference into this Item.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK EXPOSURE RELATED TO OTHER FINANCIAL INSTRUMENTS
Page 30 of the Washington Gas 2000 Annual Report to Shareholders is included in Exhibit 13 in this report and are incorporated by reference into this item.
PRICE RISK RELATED TO RETAIL ENERGY MARKETING OPERATIONS
The Company's subsidiary, WGEServices, markets both natural gas and electricity. In the course of its business, WGEServices makes fixed-price sales commitments to customers. WGEServices purchases the corresponding physical supplies at fixed prices to lock in margins. WGEServices has exposure to changes in gas prices related to the volumetric differences between the purchase commitments and sales commitments. WGEServices manages the risk associated with gas price fluctuations by closely matching purchases from suppliers with sales commitments to customers. At September 30, 2000, WGEServices' open position was not material to the Company's financial position or results of operations.
ITEM
8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
Pages 31 through 51 of the Washington Gas' 2000 Annual Report to Shareholders
are included in Exhibit 13 in this report and are incorporated by reference
into this Item.
ITEM
9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning Directors contained in the WGL Holdings' definitive Proxy Statement for the March 2, 2001, Annual Meeting of Shareholders, is hereby incorporated herein by reference. Information related to Executive Officers is reflected in Part I, hereof.
ITEM 11 - EXECUTIVE COMPENSATION
Information concerning Executive Compensation contained in the WGL Holdings' definitive Proxy Statement for the March 2, 2001, Annual Meeting of Shareholders, is hereby incorporated herein by reference.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information captioned Security Ownership of Management in WGL Holdings' definitive Proxy Statement for the March 2, 2001, Annual Meeting of Shareholders, is hereby incorporated herein by reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Karen Hastie Williams, a Director of the Company, is a partner in the law
firm Crowell & Moring. Michael D. Barnes, a Director of the Company,
was a partner in the law firm Hogan & Hartson until March 2000. Both
Crowell & Moring and Hogan & Hartson performed legal services for
the Company during fiscal year 2000.
ITEM
14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
| (a)1 All Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a)2 Financial Statement Schedules | |
|
Schedule II, on page 33, should be read in conjunction with the financial statements in the 2000 Annual Report to Shareholders. Schedules not included herein have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. |
|
|
Exhibit |
|
10-K |
|
|
Valuation and Qualifying Accounts and Reserves for the years ended September 30, 2000, 1999 and 1998 |
|
|
|
Exhibits
Exhibits Filed Herein: |
|
|
|
Articles of Incorporations
and Bylaws:
|
|
|
10.0
10.1 |
Material Contracts:
Employment Agreement between the Company and Mr. James B. White, as defined in Item 402 (a) of Regulation S-K. |
|
|
12.0
|
Statement re Computation of
Ratios-
Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends |
|
|
|
Annual Report to Security Holders-
|
|
|
|
Subsidiaries of the Registrant | |
|
|
Consents of Experts and Counsel | |
|
27.0
|
Financial Data Schedules
Restated Financial Data Schedule-Fiscal Year 1999 Restated Financial Data Schedule-Fiscal Year 1998 |
|
| (a)3 | Exhibits (Continued)
Exhibits Incorporated by Reference: |
|
|
|
Articles of Incorporations & Bylaws:
|
|
|
|
Instruments defining the rights of Security Holders
including indentures:
Supplemental Indenture, dated March 1, 1987, to the Company's Mortgage and Deed of Trust, dated January 1, 1933, filed on Form 8-K dated March 13, 1987. |
|
|
|
Material Contracts:
Service Agreement effective October 1, 1993 with Transcontinental Gas Pipe Line Corporation related to General Storage Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective October 1, 1993 with Texas Eastern Transmission Corporation related to Transportation Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective November 1, 1993 with Columbia Gas Transmission Corporation related to Firm Storage Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective November 1, 1993 with Columbia Gas Transmission Corporation related to Firm Transportation Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective November 1, 1993 with Columbia Gulf Transmission Company related to Firm Transportation Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective November 1, 1993 with Columbia Gulf Transmission Company related to Interruptible Transportation Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective November 1, 1993 with Columbia Gas Transmission Corporation related to Storage Service Transportation, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective November 1, 1993 with Columbia Gas Transmission Corporation related to Storage In Transit Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective October 1, 1993 with CNG Transmission Corporation related to Firm Transportation Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective October 1, 1993 with CNG Transmission Corporation related to Firm Transportation Storage Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective October 1, 1993 with CNG Transmission Corporation related to General Storage Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective February 1, 1992 between Transcontinental Gas Pipe Line Corporation and Frederick Gas Company, Inc. related to Firm Transportation Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective February 1, 1992 with Transcontinental Gas Pipe Line Corporation related to Firm Transportation Service, filed on Form 10-K for the fiscal year ended September 30, 1993. Service Agreement effective August 1, 1991 with Transcontinental Gas Pipe Line Corporation related to Washington Storage Service, filed on Form 10-K for the fiscal year ended September 30, 1993. 1999 Incentive Compensation Plan filed with the definitive proxy statement filed on January 25, 1999.* Directors' Stock Compensation Plan, adopted on October 25, 1998, and amended on March 1, 1999 and filed on Form 10-Q for the period ended March 31, 1999.* Employment Agreement between the Company and the Chairman of the Board and Chief Executive Officer, dated July 19, 1999, filed on Form 10-Q for the period ended June 30, 1999.* Employment Agreements between the Company and Messrs. Schepis, Kline, and Keane, as defined in Item 402(a)(3) of Regulation S-K, filed on Form 10-Q for the period ended June 30, 1999.* Employment Agreement between the Company and the Chief Executive Officer, dated May 19, 1997, filed on Form 10-Q for the period ended June 30, 1997.* Deferred Compensation Plan for Outside Directors as amended November 26, 1986 filed on Form 10-K for the fiscal year ended December 31, 1986.* Retirement Plan for Outside Directors, as amended on December 18, 1996 and filed on Form 10-K for the fiscal year ended September 30, 1997.* Long-Term Incentive Compensation Plan, as amended on December 18, 1996 and filed on Form 10-K for the fiscal year ended September 30, 1997.* Executive Incentive Compensation Plan, as amended on December 18, 1996 and filed on Form 10-K for the fiscal year ended September 30, 1997.* *Compensatory plan arrangement required to be filed pursuant to Item 14(c) of Form 10-K. |
|
|
|
|
|
|
Reports on Forms
8-K and 8-K/A:
The following reports were filed on Forms 8-K and 8-K/A through the date of this filing: |
|
|
|
|
|
|
|
Announcement of the appointment of George Patrick Clancy, Jr. to the Board of Directors of Washington Gas Light Company and the Board of Directors of WGL Holdings, both effective December 15, 2000. | |
|
|
Amendment to November 17, 2000, Form 8-K Filing regarding a weather insurance policy entered into by Washington Gas Light Company | |
|
|
Announcement regarding a weather insurance policy entered into by Washington Gas Light Company, effective October 1, 2000 and Washington Gas Light's request for rehearing of an incentive-based rate plan by the Public Service Commission of Maryland. | |
|
|
Announcement of reorganization into a holding company structure whereby WGL Holdings, Inc. becomes parent of Washington Gas Light Company and its subsidiaries. | |
|
|
Announcement of the death of Orlando W. Darden, a member of Washington Gas Light Company's Board of Directors. | |
|
|
Announcement of decision by the Public Service Commission of Maryland to decline to approve an agreement for the Company to implement an incentive-based rate plan. | |
|
|
Announcement of intention by Washington Gas Light Company to reorganize into a holding company structure, effective November 1, 2000. | |
To the Shareholders and Board of Directors of Washington Gas Light Company:
We have audited in accordance with auditing standards generally accepted
in the United States, the financial statements included in Washington Gas
Light Company's 2000 Annual Report to Shareholders incorporated
by reference in this Form 10-K, and have issued our report thereon dated
November 1, 2000. Our audit was made for the purpose of forming an opinion
on those statements taken as a whole. The Schedule II - Valuation and Qualifying
Accounts and Reserves for the years ended September 30, 2000, 1999 and
1998 - listed in the index on page 33 is the
responsibility of the Company's management and is presented for purposes
of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This Schedule II has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material respects
the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Vienna, VA
November 1, 2000
Pursuant to the requirements of Section 13 or 15(d) 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
/s/ JAMES H. DEGRAFFENREIDT, JR.
James H. DeGraffenreidt, Jr.
Chairman of the Board, President
and Chief Executive Officer
Date: December 15, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
|
|
|
|
| /s/ JAMES H. DEGRAFFENREIDT,
JR.
(James H. DeGraffenreidt, Jr.) |
Chairman of the Board, President
and
Chief Executive Officer |
12/15/00 |
| /s/ FREDERIC M. KLINE
(Frederic M. Kline) |
Vice President and Chief Financial
Officer
(Principal Financial Officer) |
12/15/00 |
| /s/ ROBERT E. TUORINIEMI
(Robert E. Tuoriniemi) |
Controller
(Principal Accounting Officer) |
12/15/00 |
| /s/ MICHAEL D. BARNES
(Michael D. Barnes) |
Director | 12/15/00 |
| /s/ FRED J. BRINKMAN
(Fred J. Brinkman) |
Director | 12/15/00 |
| /s/ DANIEL J. CALLAHAN, III
(Daniel J. Callahan, III) |
Director | 12/15/00 |
| /s/ GEORGE PATRICK CLANCY,
JR.
(George Patrick Clancy, Jr.) |
Director | 12/15/00 |
| /s/ MELVYN J. ESTRIN
(Melvyn J. Estrin) |
Director | 12/15/00 |
| /s/ DEBRA L. LEE
(Debra L. Lee) |
Director | 12/15/00 |
| /s/ PHILIP A. ODEEN
(Philip A. Odeen) |
Director | 12/15/00 |
| /s/ KAREN HASTIE WILLIAMS
(Karen Hastie Williams) |
Director | 12/15/00 |
|
2000 Form 10-K Exhibit Index |
|
|
|
|
|
|
Articles of Incorporations &
Bylaws:
Bylaws of the Washington Gas Light Company as amended on September 27, 2000 |
|
10.0
10.1 |
Material Contracts:
Employment Agreement between the Company and Ms. Elizabeth M. Arnold, as defined in Item 402 (a) of Regulation S-K. |
|
12.0
|
Statement re: Computation of Ratios-
Computation of Ratio of Earnings to Fixed Charges |
|
|
Annual Report to Security Holders-
|
|
|
Subsidiaries of the Registrant |
|
|
Consents of Experts and Counsel |
|
27.0
|
Financial Data Schedules
Financial Data Schedule-Fiscal Year 2000
|
|
|