WGL Holdings, Inc. Subsidiary Updates Estimated Costs of System Rehabilitation Program in Prince George's County, Maryland
28 April 2005 - 2:17PM
PR Newswire (US)
WGL Holdings, Inc. Subsidiary Updates Estimated Costs of System
Rehabilitation Program in Prince George's County, Maryland
WASHINGTON, April 27 /PRNewswire-FirstCall/ -- Washington Gas Light
Company (the company), a wholly-owned subsidiary of WGL Holdings,
Inc. (NYSE: WGL), today updated its estimated costs to rehabilitate
a portion of its distribution system in Prince George's County,
Maryland, which has experienced a higher than usual number of
outdoor, underground natural gas leaks. On April 1, 2005,
Washington Gas announced that it will take action to address a
significant increase in the number of natural gas leaks in a
portion of its distribution system in Prince George's County,
Maryland, that resulted from the deterioration of seals located
within mechanical couplings that connect sections of distribution
mains and service lines. Specifically, Washington Gas expects to
address all leaks in the affected area within approximately six
months of their being identified, and expects to rehabilitate or
replace all other coupled service lines and distribution mains in
the affected Prince George's County area by December 2007 even if
no leaks are detected. The costs of this work are expected to be
recorded as capital expenditures and are currently estimated to be
$87 million. This compares with Washington Gas's originally
estimated cost of $75 million, two-thirds of which was initially
identified as maintenance expense. The current cost estimate
reflects an increase in the number of services expected to be
replaced, and an expectation that main replacements will be a
larger portion of the total project cost versus encapsulating
couplings on mains. The $87 million estimate does not include any
potential costs associated with paving, which could amount to as
much as $50 million. The substantial nature of the paving cost
estimate is attributable in part to the fact that in 2002, Prince
George's County expanded paving requirements and increased related
fees. Since that time, Washington Gas has discussed with County
officials the County's new paving and permitting requirements, and
plans to continue those discussions as this important construction
project moves forward. Washington Gas will request that the Public
Service Commission of Maryland (PSC) ratify Washington Gas's
decision to account for the encapsulation costs of couplings on
mains, currently estimated to be $13 million, as capital
expenditures. The company has asked the PSC to review its
accounting decision by June 15. Washington Gas is also carefully
considering the effect of these expenditures on its ability to earn
its allowed returns in Maryland and is evaluating the most
appropriate regulatory options to ensure full and timely recovery
of, and return on, the amounts expended. The amounts described
above related to the matters in Prince George's County represent
estimates that could differ materially from the final amount of
costs that are actually incurred. Note: This news release and other
statements by the company include forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
with respect to the outlook for earnings, revenues and other future
financial business performance or strategies and expectations.
Forward-looking statements are typically identified by words such
as, but not limited to, "estimates," "expects," "anticipates,"
"intends," "believes," "plans," and similar expressions, or future
or conditional verbs such as "will," "should," "would," and
"could." Although the company believes such forward-looking
statements are based on reasonable assumptions, it cannot give
assurance that every objective will be achieved. Forward-looking
statements speak only as of today, and the company assumes no duty
to update them. As previously disclosed in the company's filings
with the Securities and Exchange Commission, the following factors,
among others, could cause actual results to differ materially from
forward-looking statements or historical performance: the level and
rate at which costs and expenses are incurred in connection with
constructing, operating and maintaining the company's natural gas
distribution system; variations in weather conditions from normal
levels; changes in economic, competitive, political and regulatory
conditions and developments; changes in capital and energy
commodity market conditions; changes in credit ratings of debt
securities of WGL Holdings, Inc. or Washington Gas Light Company
that may affect access to capital or the cost of debt; changes in
credit market conditions and creditworthiness of customers and
suppliers; changes in relevant laws and regulations, including tax,
environmental and employment laws and regulations; legislative,
regulatory and judicial mandates or decisions affecting business
operations or the timing of recovery of costs and expenses; the
timing and success of business and product development efforts and
technological improvements; the pace of deregulation efforts and
the availability of other competitive alternatives; terrorist
activities; and other uncertainties. The outcome of negotiations
and discussions the company may hold with other parties from time
to time regarding utility and energy-related investments and
strategic transactions that are both recurring and non-recurring
may also affect future performance. For a further discussion of the
risks and uncertainties, see the company's most recent annual
report on Form 10-K and other reports filed with the Securities and
Exchange Commission. DATASOURCE: WGL Holdings, Inc. CONTACT: News
Media - Tim Sargeant, +1-202-624-6043, Office, or +1-202-825-7051,
Private, or Financial Community - Melissa E. Adams,
+1-202-624-6410, Office, all for WGL Holdings, Inc. Web site:
http://www.washingtongas.com/
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