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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report April 13, 1994
I.R.S.
Commission Employer
File State of Identification
Number Registrant Incorporation Number
001-11227 Washington Energy Company Washington 91-1005304
001-11271 Washington Natural Gas Company Washington 91-1005303
815 Mercer Street, Seattle, Washington 98111
(Address of Registrant's principal executive offices)
Registrant's telephone number, including area code: (206) 622-6767
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Item 5. Other Events
On April 13, 1994, Washington Energy Company made the following press release:
LOWER FISCAL '94 EARNINGS EXPECTED
SEATTLE -- William P. Vititoe, chairman and chief executive officer of
Washington Energy Company, announced this morning that he will inform a group
of analysts at noon (EDT) today (April 13) that the analysts' consensus
estimates which average 70 cents for year-end earnings per share are more than
double the company's expectation for the fiscal year ending Sept. 30, 1994.
Vititoe believes the difference is attributable to three major factors
that are not sufficiently reflected in Wall Street's estimates:
The rate decrease of $15.4 million in annual revenues that went into
effect in October 1993 for Washington Natural Gas, the principal
subsidiary of Washington Energy Company;
Winter weather, which was more than 4 percent warmer than normal, has
lowered utility gas sales margins. In addition, some of the utility's
large-volume industrial customers shifted from firm transportation to
interruptible gas sales service, which as a result of the company's
recent rate decrease provides a lower margin. The combined effect is
estimated to reduce earnings per share by approximately 11 cents through
the first six months of the year;
Natural gas pipeline and storage demand charges incurred by Washington
Energy Resources (WER), the company's oil and gas exploration and
production subsidiary, which were not being recovered through brokered
activity, are expected to reduce earnings per share by approximately 8
cents for the fiscal year. Washington Energy Resources intends to merge
with Cabot Oil and Gas Corporation of Houston by May 1, 1994, but WER's
pipeline contractual arrangements are excluded from the merger. To
mitigate future losses, the company has assigned, effective Nov. 1,
1995, approximately 50 percent of future pipeline demand charges of
these contracts. The company intends during the fiscal year to estab-
lish reserves for future losses not mitigated;
Other factors that also will affect the full-year results are, among
others: weather for the balance of the fiscal 1994 year; the timing and amount
of rate relief; and any gain or loss recorded from the merger of the oil and
gas subsidiary with Cabot Oil and Gas.
Vititoe stated he also would report on developments which he views as
positive for the company's outlook in fiscal 1995 and beyond.
The staff of the Washington Utilities and Transportation Commission
(WUTC) recently submitted a filing in Washington Natural Gas' pending rate
case supporting a $19 million rate increase for the gas utility. Washington
Natural Gas has requested a $24.6 million increase in general rates. If the
staff's recommendation is adopted, annual earnings per share, on a pro-forma
basis, could increase by 49 cents. The WUTC's three commissioners have until
October 19, 1994, to issue a final decision.
By May 31, 1994, Washington Natural Gas will be filing a cost-of-service
study with a revised rate design, which should address the margin shortfall
caused by the shift of large-volume industrial customers to interruptible
sales service.
Based in Seattle, Washington Energy Company holds Washington Natural
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Gas, the largest natural gas utility in the Pacific Northwest; Washington
Energy Services Company, which sells energy and security products for the
home; and two other subsidiaries with interests in coal holdings and rail
transportation of coal in southeastern Montana.
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Signatures
Pursuant to the Requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WASHINGTON ENERGY COMPANY
by /S/ James P. Torgerson
Senior Vice President - Finance,
Planning and Development and
Chief Financial Officer
WASHINGTON NATURAL GAS COMPANY
by /S/ James P. Torgerson
Senior Vice President - Finance,
Planning and Development and
Chief Financial Officer
April 13, 1994