PAGE 1
File No. 69-234
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-3A-2
Statement by Holding Company Claiming Exemption under Rule U-3A-2
From the Provisions of the Public Utility Holding Company
Act of 1935
To Be Filed Annually Prior to March 1
WASHINGTON ENERGY COMPANY
FEBRUARY 29, 1996
PAGE 2
File No. 69-234
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
Statement by Holding Company Claiming Exemption Under Rule U-3A-2 from
the Provisions of the Public Utility Holding Company Act of 1935
To be Filed Annually Prior to March 1
WASHINGTON ENERGY COMPANY
(Name of Company)
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of
the Public Utility Holding Company Act of 1935, and submits the following
information:
1. Name, State of Organization, Location and Nature of Business of Claimant
and Every Subsidiary Thereof, Other Than Any Exempt Wholesale Generator
(EWG) or Foreign Utility Company In Which Claimant Directly or Indi-
rectly Holds an Interest.
Claimant: Washington Energy Company, organized in the State of Washington - a
holding company owning directly, all of the outstanding common stock of
Washington Natural Gas Company, Thermal Energy, Inc., ThermRail, Inc., WECO
Finance Company, Washington Energy Gas Marketing Company and Washington Energy
Services Company, and indirectly, the interests in other companies as de-
scribed below.
Subsidiaries of Claimant:
Washington Natural Gas Company, a Washington corporation, distributes natural
gas at the retail level in the Puget Sound area of western Washington.
WNG CAP I, Inc., a Washington corporation, and WNG CAP II, Inc., a
Washington corporation, are wholly owned subsidiaries of Washington
Natural Gas Company and were formed to provide operational flexibility
with respect to firm transportation agreements of Washington Natural Gas
Company.
Thermal Energy, Inc., a Washington corporation, owns or leases undeveloped
coal and surface rights to undeveloped coal in Montana.
Thermal Resources, Inc., a Montana corporation, is a wholly-owned
subsidiary of Thermal Energy, Inc. Thermal Resources, Inc., is a single
purpose company that leases undeveloped coal reserves in Montana to
Montco, a partnership controlled by Thermal Energy, Inc.
PAGE 3
ThermRail, Inc., a Washington corporation, was formed to participate as a
partner in the Tongue River Railroad Company. The purpose of Tongue River
Railroad Company is to develop and operate a rail line to transport coal from
future mines in Montana's Tongue River area to existing east-west rail lines.
Tongue River Holdings, Inc., a Montana corporation, is a limited partner
in Tongue River Railroad Company, a Montana limited partnership.
ThermRail, Inc., owns 87.5% of the common stock of this corporation.
WECO Finance Company, a Washington corporation, is holder of all the common
stock of Mercer Insurance Company Limited.
Mercer Insurance Company Limited, is a Bermuda domiciled corporation
providing primary liability insurance for Washington Energy Company and
its affiliates.
Washington Energy Services Company, a Washington corporation, was formed
October 1, 1993 to consolidate the appliance sales, energy efficiency products
and home security businesses that previously were part of both Washington
Natural Gas Company and a former subsidiary of Washington Energy.
Washington Energy Gas Marketing Company, a Washington corporation, was formed
in 1994 to assume certain contractual arrangements excluded from the merger of
Washington Energy Resources Company, the former oil and gas exploration and
production subsidiary of Washington Energy, with a subsidiary of Cabot Oil &
Gas Corporation.
Cabot Oil & Gas Corporation (Cabot), a Delaware corporation engaged in oil and
gas exploration, development and production operations in various areas of the
United States and Canada, became a subsidiary of the Claimant on May 2, 1994
upon the merger of Washington Energy Resources Company and Cabot. The
Claimant holds 2,133,000 shares of Cabot Class A common stock and 1,134,000
shares of Cabot 6% convertible voting preferred stock. The Claimant thus
holds approximately 16.4% of Cabot's total voting securities.
2. A Brief Description of the Properties of Claimant and Each of its
Subsidiary Public Utility Companies Used for the Generation, Transmis-
sion and Distribution of Electric Energy for Sale, or for the Production
and Distribution of Natural or Manufactured Gas, Indicating the Location
of Principal Generating Plants, Transmission Lines, Producing Fields,
Manufacturing Plants and Electric and Gas Distribution Facilities,
Including all Such Properties Which are Outside the State in Which
Claimant and its Subsidiaries are Organized and all Transmission or
Pipelines Which Deliver or Receive Electric Energy or Gas at the Borders
of Such State.
Claimant: None.
Subsidiary Public Utility Companies: The property of Washington Natural
Gas Company (the only subsidiary public utility company) consists
essentially of an underground natural gas distribution system and
associated facilities owned in fee in over 60 incorporated municipali-
ties (principally Seattle and Tacoma) and parts of five counties in the
Puget Sound region of the State of Washington.
PAGE 4
3. The Following Information for the Last Fiscal Year (Year Ended September
30, 1995) With Respect to Claimant and Each of Its Subsidiary Public
Utility Companies:
(a) Number of Kwh of electric energy sold (at retail or wholesale) and
Mcf of natural or manufactured gas distributed at retail.
Claimant: None.
Washington Natural Gas Company: a total of 76,568,500 Mcf, adjusted to
1,000 Btu, of natural gas was sold at retail during the year ended
September 30, 1995.
(b) Number of Kwh of electric energy and Mcf of natural or manufac-
tured gas distributed at retail outside the state in which each
such company is organized.
Claimant: None.
Washington Natural Gas Company: None
(c) Number of Kwh of electric energy and Mcf of natural or manufac-
tured gas sold at wholesale outside the state in which each such
company is organized, or at the state line.
Claimant: None.
Washington Natural Gas Company: a total of 34,378,000 Mcf of natural
gas was sold at wholesale outside or at the state line of Washington
State during the year ended September 30, 1995.
(d) Number of Kwh of electric energy and Mcf of natural or manufac-
tured gas purchased outside the state in which each such company
is organized or at the state line.
Claimant: None.
Washington Natural Gas Company: a total of 116,657,100 Mcf, adjusted to
1,000 Btu of natural gas, was purchased outside or at the state line of
Washington State during the year ended September 30, 1995.
4. The Following Information for the Reporting Period (Year Ended September
30, 1995) With Respect to Claimant and Each Interest It Holds Directly
or Indirectly in an EWG or a Foreign Utility Company, Stating Monetary
Amounts in United States Dollars:
(a) Name, location, business address and description of the facilities
used by the EWG or foreign utility company for the generation,
transmission and distribution of electric energy for sale or for
the distribution at retail of natural or manufactured gas.
Claimant: None, claimant does not hold any interest either directly or
indirectly in an EWG or foreign utility company.
(b) Name of each system company that holds an interest in such EWG or
PAGE 5
foreign utility company; and description of the interest held.
Claimant: None.
(c) Type and amount of capital invested, directly or indirectly, by
the holding company claiming exemption; any direct or indirect
guarantee of the security of the EWG or foreign utility company by
the holding company claiming exemption; and any debt or other
financial obligation for which there is recourse, directly or
indirectly, to the holding company claiming exemption or another
system company, other than the EWG or foreign utility company.
Claimant: None.
(d) Capitalization and earnings of the EWG or foreign utility company
during the reporting period.
Claimant: None.
(e) Identify any service, sales or construction contract(s) between
the EWG or foreign utility company and a system company, and
describe the services to be rendered or goods sold and fees or
revenues under such agreement(s).
Claimant: None.
PAGE 6
EXHIBIT A
A consolidating statement of income and surplus of Washington Energy Company
and its subsidiary companies for the last fiscal year, together with a
consolidating balance sheet of Washington Energy Company and its subsidiary
companies as of the close of such fiscal year. Filed herewith as Exhibit
99.1.
EXHIBIT B
A Financial Data Schedule. Filed herewith as Exhibit 27.
EXHIBIT C
An organizational chart showing the relationship of each EWG or foreign
utility company to associate companies in the holding-company system. Filed
herewith as Exhibit 99.2.
The above-named claimant has caused this statement to be duly executed on its
behalf by its authorized officer on the 29th day of February 1996.
WASHINGTON ENERGY COMPANY
(Name of Claimant)
(CORPORATE SEAL)
By /s/ William P. Vititoe
William P. Vititoe
Chairman of the Board,
Chief Executive Officer
and President
Attest:
By /s/ Robert J. Tomlinson
Robert J. Tomlinson
Senior Vice President -
General Counsel and Corporate Secretary
Name, title and address of officer to whom notices and correspondence concern-
ing this statement should be addressed:
William P. Vititoe
Chairman of the Board,
Chief Executive Officer and President
Washington Energy Company
815 Mercer Street
P. O. Box 1869
Seattle, Washington 98111
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR3
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 989,490
<TOTAL-OPERATING-REVENUES> 443,611
<NET-INCOME> (41,062)
</TABLE>
<TABLE>
WASHINGTON ENERGY COMPANY AND SUBSIDIARIES Exhibit A
Consolidating Statement of Income and Retained Earnings Page 1 of 6
For the 12 Months Ended September 30, 1995
(in thousands)
<CAPTION>
Washington WECO
Washington Natural Gas Thermal Finance
Energy Company Energy, Inc. Company ThermRail,
Company Consolidated Consolidated Consolidated Inc.
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Operating revenues $ $ 420,048 $ $ 2,300 $
Operating expenses
Cost of gas sold 219,022
Utility operations and maintenance 1,600 68,125 45 586 1
Depreciation, depletion and
amortization 33,128
General taxes 4 40,729
Federal income taxes (3,067) 8,531 259 663 (145)
-------------- -------------- -------------- -------------- --------------
Total operating expenses (1,463) 369,535 304 1,249 (144)
-------------- -------------- -------------- -------------- --------------
Operating income (loss) 1,463 50,513 (304) 1,051 144
Other income (expense)
Pre-tax write-down of coal and rail investments (34,700) (6,003)
Pre-tax charges related
to unconsolidated affiliate (24,803)
Deferred tax benefit of writedowns 8,681 12,145 2,101
Preferred dividend requirement-WNG (7,126)
Other, net (10,209) (443) 964 272 2
-------------- -------------- -------------- -------------- --------------
Total other income (loss) (33,457) (443) (21,591) 272 (3,900)
-------------- -------------- -------------- -------------- --------------
Gross income (loss) (31,994) 50,070 (21,895) 1,323 (3,756)
Interest charges 9,068 32,216 1,948 74 414
-------------- -------------- -------------- -------------- --------------
Net income (loss) (41,062) 17,854 (23,843) 1,249 (4,170)
Retained earnings beginning of period (61,339) 18,137 2,219 445 65
Excess premium, preferred redemption
Dividends - common stock (23,877)
- preferred stock (7,126)
-------------- -------------- -------------- -------------- --------------
Retained earnings end of period $ (126,278) $ 28,865 $ (21,624) $ 1,694 $ (4,105)
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
WASHINGTON ENERGY COMPANY AND SUBSIDIARIES Exhibit A
Consolidating Statement of Income and Retained Earnings (Continued) Page 2 of 6
For the 12 Months Ended September 30, 1995
(in thousands)
<CAPTION>
Washington Washington Washington
Energy Gas Energy Energy
Marketing Services Company
Company Company Eliminations Consolidated
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Operating revenues $ $ 23,564 $ (2,301) $ 443,611
Operating expenses
Cost of gas sold 219,022
Utility operations and maintenance 25,127 (2,300) 93,184
Depreciation, depletion and
amortization 33,128
General taxes 241 40,974
Federal income taxes (93) (641) 5,507
-------------- -------------- -------------- --------------
Total operating expenses (93) 24,727 (2,300) 391,815
-------------- -------------- -------------- --------------
Operating income (loss) 93 (1,163) (1) 51,796
Other income (expense)
Pre-tax write-down of coal and rail investments (40,703)
Pre-tax charges related
to unconsolidated affiliate (24,803)
Deferred tax benefit of writedowns 22,927
Preferred dividend requirement-WNG (7,126)
Other, net (2,618) 254 9,153 (2,625)
-------------- -------------- -------------- --------------
Total other income (loss) (2,618) 254 9,153 (52,330)
-------------- -------------- -------------- --------------
Gross income (loss) (2,525) (909) 9,152 (534)
Interest charges 898 279 (4,369) 40,528
-------------- -------------- -------------- --------------
Net income (loss) (3,423) (1,188) 13,521 (41,062)
Retained earnings beginning of period (13,131) 106 (7,841) (61,339)
Excess premium, preferred redemption
Dividends - common stock (23,877)
- preferred stock 7,126
-------------- -------------- -------------- --------------
Retained earnings end of period $ (16,554) $ (1,082) $ 12,806 $ (126,278)
============== ============== ============== ==============
</TABLE>
<TABLE>
WASHINGTON ENERGY COMPANY AND SUBSIDIARIES Exhibit A
Consolidating Balance Sheet Page 3 of 6
September 30, 1995
(in thousands)
<CAPTION>
Washington WECO
Washington Natural Gas Thermal Finance
Energy Company Energy, Inc. Company ThermRail,
Company Consolidated Consolidated Consolidated Inc.
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Assets
Property, plant and equipment
Utility plant, at original cost $ $ 1,055,322 $ $ $
Coal and other 13,625
Accumulated depreciation,
depletion and amortization (263,664) (9,590)
-------------- -------------- -------------- -------------- --------------
Net property, plant and equipment 791,658 4,035
Investment in associated companies 218,961
Investment in unconsolidated affiliates 70,313
Notes and Accounts receivable from subsidiaries 73,202 102 554
Current assets
Cash and cash equivalents 3,571 5,400
Receivables, net 1,769 7,037 13 2
Unbilled revenue 9,607
Federal income taxes receivable 3,957 1,416 (875) (950) 6
Deferred income taxes 3,707
Materials and supplies, at average cost 29,706
-------------- -------------- -------------- -------------- --------------
Total current assets 5,726 55,044 (862) 4,452 6
Other assets and deferred charges
Environmental insurance receivables 8,116
Regulatory tax asset 17,605
Deferred FIT 2,595
Deferred charges and other 378 18,073 1,353
-------------- -------------- -------------- -------------- --------------
Total other assets and deferred
charges 2,973 43,794 1,353
-------------- -------------- -------------- -------------- --------------
Total assets $ 371,175 $ 890,598 $ 3,727 $ 5,805 $ 6
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
WASHINGTON ENERGY COMPANY AND SUBSIDIARIES Exhibit A
Consolidating Balance Sheet (Continued) Page 4 of 6
September 30, 1995
(in thousands)
<CAPTION>
Washington Washington Washington
Energy Gas Energy Energy
Marketing Services Company
Company Company Eliminations Consolidated
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets
Property, plant and equipment
Utility plant, at original cost $ $ $ $ 1,055,322
Coal and other 1,996 15,621
Accumulated depreciation,
depletion and amortization (481) (273,735)
-------------- -------------- -------------- --------------
Net property, plant and equipment 1,515 797,208
Investment in associated companies (218,961)
Investment in unconsolidated affiliates 70,313
Notes and Accounts receivable from subsidiaries 1 (73,859)
Current assets
Cash and cash equivalents 53 301 (10) 9,315
Receivables, net 47 2,083 (121) 10,830
Unbilled revenue 9,607
Federal income taxes receivable 97 (4) 7,295 10,942
Deferred income taxes 3,707
Materials and supplies, at average cost 1,516 746 31,968
-------------- -------------- -------------- --------------
Total current assets 1,713 3,126 7,164 76,369
Other assets and deferred charges
Environmental insurance receivables 8,116
Regulatory tax asset 17,605
Deferred FIT (2,595)
Deferred charges and other 75 19,879
-------------- -------------- -------------- --------------
Total other assets and deferred
charges 75 (2,595) 45,600
-------------- -------------- -------------- --------------
Total assets $ 1,713 $ 4,717 $ (288,251) $ 989,490
============== ============== ============== ==============
</TABLE>
<TABLE>
WASHINGTON ENERGY COMPANY AND SUBSIDIARIES Exhibit A
Consolidating Balance Sheet (Continued) Page 5 of 6
September 30, 1995
(in thousands)
<CAPTION>
Washington WECO
Washington Natural Gas Thermal Finance
Energy Company Energy, Inc. Company ThermRail,
Company Consolidated Consolidated Consolidated Inc.
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Capitalization and liabilities
Capitalization
Common shareholders' interest $ 196,686 $ 251,528 $ (15,625) $ 2,793 $ (3,105)
Redeemable preferred stock 90,000
Long-term debt 310,060
-------------- -------------- -------------- -------------- --------------
Total capitalization 196,686 651,588 (15,625) 2,793 (3,105)
Current liabilities
Notes payable and commercial paper 161,994
Current sinking-fund requirements and debt
maturities 30,140
Accounts payable 26 26,675
Purchased gas liability 15,554
Accrued general taxes 12,381
Environmental remediation liabilities 4,578
Other current liabilities 1,214 28,536 (4) 3,589
-------------- -------------- -------------- -------------- --------------
Total current liabilities 163,234 117,864 (4) 3,589
Payables to affiliate companies 11,255 16,699 22,231 962 4,825
Deferred credits and other liabilities
Noncurrent deferred income taxes 69,826 (2,875) (1,539) (1,714)
Regulatory tax liability 11,017
Unamortized investment tax credits 9,352
Contributions in aid of construction 14,252
Contingency reserve and other
-------------- -------------- -------------- -------------- --------------
Total deferred credits and other 104,447 (2,875) (1,539) (1,714)
-------------- -------------- -------------- -------------- --------------
Total capitalization and liabilities $ 371,175 $ 890,598 $ 3,727 $ 5,805 $ 6
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
WASHINGTON ENERGY COMPANY AND SUBSIDIARIES Exhibit A
Consolidating Balance Sheet (Continued) Page 6 of 6
September 30, 1995
(in thousands)
<CAPTION>
Washington Washington Washington
Energy Gas Energy Energy
Marketing Services Company
Company Company Eliminations Consolidated
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Capitalization and liabilities
Capitalization
Common shareholders' interest $ (16,544) $ (84) $ (218,963) $ 196,686
Redeemable preferred stock 90,000
Long-term debt 310,060
-------------- -------------- -------------- --------------
Total capitalization (16,544) (84) (218,963) 596,746
Current liabilities
Notes payable and commercial paper 161,994
Current sinking-fund requirements and debt
maturities 30,140
Accounts payable 1,046 437 (7) 28,177
Purchased gas liability 15,554
Accrued general taxes 175 12,556
Environmental remediation liabilities 4,578
Other current liabilities (82) 386 (122) 33,517
-------------- -------------- -------------- --------------
Total current liabilities 964 998 (129) 286,516
Payables to affiliate companies 13,496 4,392 (73,860)
Deferred credits and other liabilities
Noncurrent deferred income taxes (8,360) (589) 4,701 59,450
Regulatory tax liability 11,017
Unamortized investment tax credits 9,352
Contributions in aid of construction 14,252
Contingency reserve and other 12,157 12,157
-------------- -------------- -------------- --------------
Total deferred credits and other 3,797 (589) 4,701 106,228
-------------- -------------- -------------- --------------
Total capitalization and liabilities $ 1,713 $ 4,717 $ (288,251) $ 989,490
============== ============== ============== ==============
</TABLE>
There are no relationships of EWGs or foreign utility companies to associate
companies in the holding company system.
