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August 15, 2005 at 12:00 AM EDT

Washington Gas Reaches Agreement to Benefit Maryland Customers, Stabilize Corporate Revenues

Washington Gas Reaches Agreement to Benefit Maryland Customers, Stabilize Corporate Revenues

WASHINGTON, Aug 15, 2005 /PRNewswire-FirstCall via COMTEX/ -- Washington Gas Light Co., a wholly-owned subsidiary of WGL Holdings, Inc., announced today that it will use a revenue normalization adjustment (RNA) to reduce the effect of weather fluctuations and gas demand on its customers' bills. The Maryland Public Service Commission has approved the RNA for residential and commercial customers of Washington Gas, who account for approximately 40 percent of the company's total customer base.

"This is a win-win for Maryland customers and Washington Gas," said Adrian P. Chapman, Washington Gas Vice President of Regulatory Affairs and Energy Acquisition. "The new process benefits customers by minimizing the monthly bill volatility caused by weather fluctuations and associated gas demand. Likewise, Washington Gas has a greater opportunity to stabilize revenues, which, in turn, will level the cash flows designed to support expenditures for daily operations, including maintenance and improvements that ensure system integrity and reliability."

Like most utilities, Washington Gas sets its rates based on the amount of natural gas customers are expected to use on a monthly basis under normal weather. These estimates are based on many years of weather data and customer usage information. However, because actual weather patterns can be volatile, and cold weather can increase gas commodity prices, customers occasionally have found themselves faced with high monthly bills during winter months. The new RNA will reduce bills when winter weather is colder-than-normal and usage is higher, and it will attach a surcharge to bills during periods of warmer- than-normal weather and lower usage. A factor based on normal customer usage will be applied to each billing period to determine the appropriate credit or surcharge.

The new tariff caps the monthly adjustment to $0.05 per therm in any month. For the average Washington Gas residential heating customer, this means that the adjustment would not exceed about $3.50 in an average month. The billing reconciliation process will begin on Oct. 1, 2005. The first adjustment, if there is one, would be reflected in the distribution charge in the December billing cycle. Any amount in excess of this cap will be collected or credited in subsequent months.

Washington Gas presented the RNA proposal to the Commission as part of a settlement of a current rate case. The settling parties include a wide range of customer advocates, including the Maryland Office of People's Counsel, the Apartment and Office Building Association of Metropolitan Washington, and the Department of Defense and Federal Executive Agencies.

"We commend the Commission and the settling parties for recognizing the benefits to our Maryland customers and to the company. Customers now will be able to manage better their monthly bills, particularly during periods of high and volatile natural gas prices," noted Chapman.

Washington Gas is the latest utility among the growing list of gas utilities using revenue or weather normalization tariffs to reduce the effect of weather and gas demand on customer bills. According to a 2005 study by the American Gas Association, 37 utilities in 17 states have tariffs like the one approved by the Maryland Public Service Commission.

Headquartered in Washington, D.C., Washington Gas is a wholly-owned subsidiary of WGL Holdings, Inc. (NYSE: WGL). The parent company holds a group of energy-related retail businesses that focus primarily on retail energy- marketing and commercial heating, ventilating and air conditioning services. Additional information about WGL Holdings is available on its Web site, http://www.wglholdings.com.

SOURCE Washington Gas Light Co.

Miguel A. Gonzalez of Washington Gas Light Co., office: +1-202-624-6383, or pager:
+1-202-339-3859