Washington Gas Light Co. announced last week that it has filedfor a five-year rate freeze with the Maryland Public ServiceCommission. Additionally, the filing states that any earnings inexcess of the target return on equity, set at 11.4%, will be sharedequally between Washington Gas and its firm customers. Theeffective date of the proposal is July, 1, 2000, pending commissionapproval.

Washington Gas said the filing’s proposals would balance theinterests of both Washington Gas shareholders and customers byholding the line on rates and providing an increased incentive foridentifying and implementing operating efficiencies, with benefitsto be shared between the company and its customers.

A key to this balance is the proposal’s gas cost incentivemechanism, which would share increases and decreases in gas demandcosts between the company and its customers. Under the old system,many of the costs were entirely passed through to the customer.Washington Gas preserved the right to eliminate the sharingmechanism under “certain conditions.”

“The settlement will provide Washington Gas’s customers with thereasonable rates they value and the company with an opportunity torespond positively to increasing competition. We will aggressivelyseek ways to improve further the efficiency with which the companywill continue to deliver the high-quality service customersexpect,” said Adrian Chapman, vice president of regulatory affairsand energy acquisition.

Also included in the filing was a weather normalizationadjustment, which would “smooth out the year-to-year swings inheating costs when the weather is extremely warm or cold,” thecompany said.

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