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



                                  June 30, 1999
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                                (Date of Report)



                                   ITRON, INC.
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               (Exact Name of Registrant as Specified in Charter)

         Washington                     0-22418                   911011792
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(State or Other Jurisdiction        (Commission File No.)     (IRS Employer
       of Incorporation)                                     Identification No.)

                    2818 N. Sullivan Road, Spokane, WA 99216
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               (Address of Principal Executive Offices) (Zip Code)

                                 (509) 924-9900
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              (Registrant's Telephone Number, Including Area Code)

















Item 5: Other Information



The Company has a contract ("Contract") with Virginia Power dated July 24, 1997,
in which  Virginia  Power  purchased a Fixed Network AMR system from Itron.  The
Company  recently  received  notice  from  Virginia  Power  that  is has met the
deliverables  and  system  functionality  requirements  for the  system and as a
result,  has  received  final  systems  acceptance.  To date,  the  Company  has
recognized revenues of approximately $40 million on this Contract. The system at
Virginia  Power is being used to provide  advanced  meter  reading  services for
approximately  430,000  meters  in  areas in  Richmond,  Northern  Virginia  and
Norfolk.



In 1998, the Virginia  General  Assembly passed a law mandating  retail electric
competition  be fully  implemented in Virginia by January 1, 2004. In connection
with the transition into a deregulated  market,  Virginia Power and the Virginia
State  Corporation  Commission  agreed to a rate  settlement  that  will  reduce
Virginia Power's rates by $700 million and requires  Virginia Power to write off
$220 million of their regulatory assets.  Virginia Power has informed Itron that
in light of the rate  settlement  it has  undertaken  an  aggressive  program to
significantly reduce its purchasing and supply costs. As a significant vendor to
Virginia Power, the Company is being impacted by this cost reduction initiative.



The Company  recently agreed to amend its Contract with Virginia Power.  The key
change in the Contract relates to the outage detection functionality provided by
the  Fixed  Network  system.  While all of the  hardware  necessary  for  outage
detection capability is in place in the system,  additional software development
work would need to be performed by both the Company and Virginia  Power in order
for the outage detection information to be useful. The Contract has been amended
to eliminate outage detection functionality at this time.



The Contract  amendment  provides for a reduction in the total  payment that the
Company is to receive for the system from Virginia  Power of $4.2  million.  The
Company  expects to record the financial  impact of the Contract  reduction as a
$4.2 million charge to operations in the second quarter. The after-tax impact of
this charge on earnings is expected to be approximately 16 cents per share.











The Company  believes that Virginia  Power is an important  customer and that it
has the potential to do considerable business with Virginia Power in the future.
Virginia  Power and  Consolidated  Natural  Gas are in the  process of a merger,
which will result in the formation of the nation's  fourth largest  electric and
natural gas utility, serving nearly 4 million retail customers in five states.



Certain Forward Looking Statements

When used in this  discussion,  the words  "expects",  "believes",  and  similar
expressions are intended to identify forward-looking statements. Such statements
are inherently  subject to a variety of risks and uncertainties that could cause
actual results to differ materially from those reflected in the  forward-looking
statements. Such risks and uncertainties include, among others, whether Virginia
Power will order any future  products or services  from the Company.  For a more
complete  description of these and other risks,  see the Company's Annual Report
on Form 10-K for the year ended December 31, 1998, and Form 10-Q for the quarter
ended March 31, 1999.