A small transformer installed in nearly 5,500 homes in Virginia, Maryland and West Virginia by the Chesapeake & Potomac Telephone Co. is being recalled because it is a fire hazard.

The transformer, which plugs into an electrical socket, powers the lights in "Princess" and "Trimline" telephone dials and push buttons.

About 10,000 of the transformers were installed for C&P customers in Virginia, Maryland and West Virginia--but not in the District, officials said.

They said C&P began the recall in 1978 after officials learned the transformers can overheat and explode.

So far, only about 4,500 have been returned. Another 5,500 are unaccounted for, although the company said some may have been removed by customers or repairmen and not reported.

C&P is including a special notice about the transformer recall in customer bills.

When questioned about the fires, telephone officials said they knew of one case in which a transformer exploded and scorched a wall. But they said they didn't know of any fires started by faulty transformers.

C&P said the recalled transformers made by Ault Inc. have the identification code KS-20426 L3 stamped on them.

Customers who find the transformers shouldn't unplug them because they could explode on touch, C&P said. Instead, customers should contact the company and a representative will be sent to disconnect the transformer.