Fitch: WGL Holdings' & Sub's Ratings Not Affected by Repair Plans

Business Wire, April 4, 2005

NEW YORK -- Fitch Ratings does not expect Washington Gas Light Co.'s (WG, senior unsecured debt rated 'AA-', Stable Outlook by Fitch) announcement that it is replacing natural gas services and repairing natural gas mains in a portion of its gas distribution system in Prince George's County, Maryland to affect ratings in the near term. Fitch also does not expect WGL Holdings Inc.'s (WGL, indicative senior unsecured debt rated 'A ', Stable Outlook by Fitch), parent company of WG, ratings to be immediately affected.

On April 1, 2005, WGL disclosed that it had detected an abnormal number of gas leaks in this portion of its distribution system and that it believed the cause of the leaks has been the deterioration of seals located within mechanical couplings. To complete these repairs, the company estimates associated costs of $75 million, including $50 million of maintenance expenses and $25 million of capital expenditures. WGL anticipates that it will seek regulatory recovery of these expenses.

The ultimate impact on ratings will depend on the actual costs incurred, as well as the timing and degree of regulatory recovery. Fitch will continue to monitor WGL's progress in managing repairs to its system and the support of Maryland regulators for recovery of associated costs.