- The Washington Times - Monday, February 12, 2001

The long cold winter isn't over yet, and WGL Holdings, the parent company of Washington Gas, has decided to offer its D.C. customers some relief from their high gas bills.

The company announced earlier this month that the District of Columbia Public Service Commission approved Washington Gas' petition for a one-time billing credit totaling $11.1 million to its D.C. customers. Tim Sargeant, Washington Gas spokesman, says the amount of the credit on each customer's February bill will be about $50. The average bill for the month of February will come to a before-credit figure of about $250.

Mr. Sargeant says the credit is coming from a surplus in their account budgets. The budget established was in 1996, during the last full rate proceeding hearing.

"During the past four years, there hasn't been any need to raise our budgets. The excess funds get returned to the customers," he says. "They can certainly use the money."

The company said that shareholders' earnings will not be affected by the credit.

"I congratulate them on their timing," says Maurice May, an analyst with Friedman, Billings and Ramsey Inc. "If ever [Washington Gas customers] needed a break with their gas bill, it's now. Utilities operate in a political area, and they have to operate in good terms with regulators and customers," he added.

WGL Holdings Inc., through its Washington Gas Light Co. subsidiary, sells and delivers natural gas and other energy-related products and services to residential, commercial and industrial customers in the metropolitan Washington area.

It has been a steady performer in the stock market, reaching a 52-week high of $31.50 on Dec. 29. Their lowest close for the year on Feb. 24 was $21.75. The company's stock stood at $27.69 on Friday.

First quarter net income for the company rose to $50.4 million ($1.08 per diluted share) from $39.4 million (85 cents) for the like quarter the year before.

Diluted shares reflect the value of options, warrants and other securities convertible into common stock.

The stock is doing well, but Mr. Sargeant says that Washington Gas is not making any money off customers' gas usage.

"By regulation, Washington Gas does not attach any profits to the sale of natural gas. They earn profits through the delivery of product to the homes, and the rates are set by commissions," he says. "We're paying the same amount for gas as customers are."

Stocks in utility companies are less volatile than others like some computer and technology stocks. But there are factors that contribute to a utility company's stock performance. The main reason WGL Holdings has been doing well as of late is the cold weather, analysts say.

"The stock's been performing well in recent months. It's a reflection of earnings getting full, and the weather's getting normal. In December of 1998, a warm winter, the stock dropped to $1.22 in earnings," Mr. May says. Earnings have come back to about $2.11 per share on an operating basis, he adds.

David Schanzer, an analyst with Janney Montgomery Scott LLC, in Philadelphia, disagrees.

"The price has gone up, but not as well as others in the group. The company has benefited from this weather they are very winter-sensitive and very residential- and small business-oriented," he says.

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