GreyStone Power Corporation Enters Into $600 Million + Power Purchase and Scheduling Agent Services Agreement with Morgan Stanley Capital Group

/PRNewswire/ -- On May 12, 2010, the Board of Directors of GreyStone Power Corporation ("GreyStone") approved a five-year Power Purchase and Scheduling Agent Services Agreement with Morgan Stanley Capital Group. The Agreement is valued at more than $600 million.

Background

GreyStone is a member-owned, non-profit rural electric distribution cooperative located on the west side of Atlanta serving portions of eight metropolitan Atlanta counties. Its main office is located at 4040 Bankhead Highway, Douglasville, GA 30134.

GreyStone is one of the largest members of Oglethorpe Power Corporation, the generation supplier from which GreyStone purchases most of its power needs. Under its agreement with Oglethorpe, GreyStone is permitted to procure its remaining power requirements from competitive wholesale power suppliers if it so chooses.

Morgan Stanley Capital Group is a subsidiary of Morgan Stanley and is engaged in wholesale sales and purchases of electricity throughout the United States, including Georgia. Morgan Stanley has been an active participant in the Georgia market for a number of years.

GreyStone conducted a competitive procurement beginning in January by issuing a form of agreement to a selected list of potential power suppliers. GreyStone negotiated an agreement with each potential power supplier and asked each to price their respective agreement. GreyStone selected Morgan Stanley from the competing power suppliers based on the consideration of price and contract terms.

The Power Purchase and Scheduling Agent Services Agreement

The agreement provides that Morgan Stanley will schedule the energy from GreyStone's resources or provide power from the market, whichever is more economical, to serve all of GreyStone's load.

The agreement will allow GreyStone to adapt to changing legal, public policy and regulatory requirements, and to purchase renewable and alternative energy, and implement demand response, net metering and other new technologies.

Gary Miller, the President and Chief Executive officer of GreyStone, stated: "We selected Morgan Stanley after an extensive and competitive procurement process in which we sought the best combination of price and contract terms. We were pleased with Morgan Stanley's willingness to work with us and believe we have obtained a well priced agreement for GreyStone's members that also provides flexibility to adapt to changing circumstances in the future."

Alex Tolstykh, Managing Director and Head of Southeast/Mid-West Power and Gas at Morgan Stanley said: "We are excited to be selected as supplier to GreyStone and look forward to doing a great job serving GreyStone's power needs during the contract and beyond."

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Waste Management Debuts New Landfill-Gas-to-Energy Facility at Superior Landfill in Savannah, Ga.

PRNewswire -- Waste Management today debuted a landfill-gas-to-energy facility at its Superior Landfill and Recycling Center, which uses methane gas to power up to 3,400 homes in the surrounding area. More than 100 state and local officials, business and community leaders gathered for an opening event and tours showcasing the new facility.

The facility is among the largest of its kind in Georgia and the Southeast, according to U.S. Environmental Protection Agency (EPA) data. It represents a new source of green energy entering the power grid, lessening our dependence on fossil fuels. Methane gas -- created from the natural decomposition of waste -- is taken from the landfill through a series of wells placed around the site. From there, gas is used to power eight large engines to generate electricity, creating approximately 6.4 megawatts of power.

"The opening of this facility represents a new source of clean, renewable energy for our community," said Robby White, district manager for Waste Management in Savannah. "It is an environmentally responsible way to harness the energy from the waste we all generate."

Georgia Power and Waste Management Renewable Energy LLC entered into a 10-year deal for electricity, which was approved by the Georgia Public Service Commission in April. Georgia Power selected Waste Management from a number of independent renewable generators that submitted bids through the company's green request for proposals issued in April 2009. The energy from Superior is helping grow Georgia Power's Green Energy program.

"Landfill gas is a clean energy resource that has been endorsed by the U.S. EPA as an environmentally wise alternative that reduces our reliance on fossil fuels," said Paul Pabor, vice president of Renewable Energy for Waste Management. "Over the years, Waste Management has worked closely with businesses, industries and public utilities to develop many beneficial-use projects. We currently have more than 115 projects across North America, including three other sites in Georgia."

Waste Management tailors its services to meet the needs of each customer group and to ensure consistent, superior service at the local level. Waste Management, based in Houston, Texas, is the leading provider of comprehensive waste management services in North America. Its subsidiaries provide collection, transfer, recycling and resource recovery, and disposal services. It is also a leading developer, operator and owner of landfill gas-to-energy and waste-to-energy facilities in the United States. With nearly 800 employees in Georgia, the company serves residential, commercial, industrial and municipal customers throughout North America.

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Chevron Energy Solutions and Marine Corps Logistics Base Albany Announce First Navy Landfill Gas Project

/PRNewswire/ -- Chevron Energy Solutions, a unit of Chevron Corporation (NYSE:CVX) , and the Marine Corps Logistics Base (MCLB) Albany today announced the start of construction for the Department of Navy's first landfill gas cogeneration project.

The project will produce 1.9 megawatts of renewable electric power and steam by burning landfill gas collected from a nearby landfill. Chevron Energy Solutions will also complete industrial lighting retrofits in 82 buildings and expand the existing energy management control system. When combined with the cogeneration project, these measures will reduce the base's purchase of utility power and reduce MCLB's carbon emissions by 19,300 tons annually, equivalent to removing 16,000 cars from the road.

"This project is important to the Department of the Navy, the Marine Corps and Dougherty County. And with the help of Chevron Energy Solutions we will surpass our federal renewal energy goals, and fulfill our aspiration of becoming the 'greenest' Marine Corps installation in the nation," said Col. Terry V. Williams, commanding officer, MCLB Albany. "In addition to providing renewable power and energy security and reliability to MCLB, the project provides a valuable long-term source of revenue for Dougherty County. It took the hard work of many different partners to make this project a reality."

Chevron Energy Solutions developed and designed the project and will maintain the landfill gas-to-energy facility, pipeline and landfill gas processing equipment. The new facility will house a dual-fuel engine generator, a stack heat recovery steam generator and two dual-fuel boilers. The primary equipment can operate on landfill gas or natural gas, which provides energy security benefits. MCLB's use of renewable power will increase to 19 percent, which exceeds the EPAct of 2005 and Energy Independence and Security Act of 2007 mandate of 7.5 percent renewable power use by 2013.

Chevron Energy Solutions and MCLB will share in the operation of the generator and steam-producing equipment. Through an Energy Savings Performance Contract (ESPC), Chevron Energy Solutions arranged the financing for the project, which is repaid through the energy costs avoided. The company also guarantees system performance for 22 years.

"MCLB Albany is harnessing the power of an important renewable energy source through a partnership with the local community and we are proud of this effort," said Jim Davis, president of Chevron Energy Solutions. "The project is funded entirely by energy savings and demonstrates how military bases and local governments can work together with private industry to meet federal mandates without increasing taxpayer costs."

Dougherty County will extract and sell the landfill gas to MCLB from the Fleming/Gaissert Road Landfill, which receives approximately 100,000 tons of municipal solid waste each year. The biological decomposition of the waste generates landfill gas that is approximately 50 percent methane gas by volume.

A groundbreaking ceremony was held today and military, government and business officials attended. The project is expected to be completed by April 2011.

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Price Carbon Campaign: Kerry-Lieberman Bill Is No Match for Climate Challenge

/PRNewswire/ -- While senators John Kerry (D-MA) and Joe Lieberman (I-CT) should be commended for their tireless efforts on climate and energy legislation, several flaws in their proposal will prevent it from reducing carbon dioxide to levels that are safe and sustainable, the Price Carbon Campaign said in a statement today.

"The Kerry-Lieberman bill fails the acid test of climate legislation, which is to provide clear signals on emission prices. Investors, entrepreneurs and households all need certainty in future fuel and energy prices, but Kerry-Lieberman hides these crucial price signals behind a curtain of cap-and-trade," said economist Charles Komanoff, co-founder of the Carbon Tax Center, one of the campaign members.

The Kerry-Lieberman bill also allows polluters to purchase carbon offsets, which will delay by precious decades America's transition to clean energy, the campaign said.

"Instead of making needed investments in renewable energy, utilities will have the much cheaper option of investing in third-world projects aimed at cutting carbon," said Tom Stokes, Coordinator of the Climate Crisis Coalition. "Most of these offsets do nothing to reduce current emissions, and they allow polluters in the U.S. to keep burning coal and other dirty fuels."

The campaign also said the Kerry-Lieberman bill fails to adequately protect American households from rising energy costs.

"We need to cut CO2, but we shouldn't stick hard-working families with the bill," said Marshall Saunders, Founder and President of Citizens Climate Lobby, another campaign member. "We believe all the revenue derived from pricing carbon should be returned to everyone, either through direct payment or payroll tax reductions."

The Price Carbon Campaign supports the "People's Climate Stewardship Act," introduced by Dr. James Hansen at the Climate Rally in Washington, DC, on April 25. Rep. John Larson (D-CT) and Bob Inglis (R-SC) have each introduced bills based on the same paramount principles: steadily-increasing carbon fees and recycling the revenue back to the American people.

The Price Carbon Campaign includes Climate Crisis Coalition, Carbon Tax Center and Citizens Climate Lobby.

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Groups: Negative Court Ruling in Georgia Throws DOE's Nuclear Loan Guarantee Bailout Program Into Question

/PRNewswire/ -- The only taxpayer-backed loan guarantee bailout to be offered for new nuclear reactors - $8.3 billion for two reactors at Plant Vogtle in Georgia - should be rescinded now that the project was dealt a setback in a decision by a Georgia judge that state officials illegally certified the project, according to the Southern Alliance for Clean Energy (SACE) and Public Citizen.

The groups also noted that, despite the push in Congress for more controversial loan guarantees for new nuclear reactors, the other two leading contenders for such bailouts - the South Texas Project at Bay City on the Gulf Coast (114 miles from San Antonio and 90 miles from Houston) and Calvert Cliffs in Maryland - are more unsettled than ever and now pose an even greater risk to U.S. taxpayers.

As such, the groups also said that Department of Energy (DOE) should refrain from offering any new loan guarantees to nuclear projects before overhauling its evaluation process.

DOE has stated that the $10 billion remaining in loan guarantee authority is only sufficient for one of the two projects and has requested another $9 billion in the appropriations supplemental to cover the second project. In its FY2011 budget request, the Obama Administration has already requested $36 billion in loan guarantee authority, a tripling of the nuclear loan guarantee program.

The groups detailed the setbacks at the Georgia project and other two federal bailout candidates as follows:

VOGTLE

Last Friday, the Southern Alliance for Clean Energy won its lawsuit in Fulton County Superior Court that aimed to protect Georgians from unfair utility costs in connection with the proposed construction of two new nuclear reactors at Vogtle near Waynesboro, Georgia. The Court found that the Georgia Public Service Commission acted illegally in violation of Georgia state law. The Commission's approval last year during the certification process for the proposed new Vogtle reactors was put into question.

At Friday's hearing, Judge Wendy Shoob heard SACE's allegation that the Georgia Public Service Commission (PSC) erred as a matter of law by failing to make findings of fact and conclusions of law as required. Specifically, the group alleged that the PSC did not provide the required written justifications for its findings that would "afford an intelligent review" by the courts. The PSC instead relied on statements void of any reasoning. The Court ruled in favor of SACE and found that the PSC acted illegally in violation of Georgia state law by failing to make all appropriate findings and to support those findings with a concise and explicit statement of the facts. Just prior to the decision, Southern Company had yet to accept the conditional guarantee and had requested another month to decide. On Wednesday, the Court issued the final order, remanding the case back to the PSC. (See http://www.cleanenergy.org/images/testimony/FinalOrderPetitionforJudicialRevie w050510.pdf for more information.)

Stephen Smith, executive director of the Southern Alliance for Clean Energy, said: "This ruling raises further concerns over the Obama Administration's controversial decision in February to award an $8.3 billion taxpayer-financed conditional loan guarantee for Southern Company's proposed Vogtle project, the first to be offered one in the country. Given this decision and the economic risks to U.S. taxpayers of this project, DOE should rescind its offer of a loan guarantee. DOE needs to re-evaluate its 'due-diligence' procedures before offering any other loan guarantees. For example, how can a loan guarantee be offered before a reactor design is even certified as safe by the Nuclear Regulatory Commission?"

SOUTH TEXAS PROJECT

The estimated cost for two NRG proposed reactors in Texas has risen from $5.8 billion in 2006 to a reported $18.2 billion at the end of 2009. As a result, the City of San Antonio pulled out of 85 percent of its investment in the project, leaving a void of as much as 33 percent of the project without investors.

Karen Hadden, executive director of the Sustainable Energy and Economic Development (SEED) coalition, said: "The South Texas nuclear reactor is an economic disaster waiting to happen. The costs have trebled since the plant was proposed, NRG's credit is just one notch above a junk bond rating, NRG's partner sued them for fraud and no one wants to buy shares due to the fast-rising costs. The federal government may foolishly put taxpayer money behind the South Texas Project, but it can't force anyone to buy the resulting overpriced power. Since Texas is deregulated, this plant will have to sell excess energy into the market. Expensive nuclear power must compete against cheaper and plentiful efficiency, wind and natural gas. As a result, the power it produces won't be too cheap to meter -- instead it will be too expensive to sell. If we give this turkey loan guarantees -- taxpayers will get stuck with the bill."

CALVERT CLIFFS

In 2007, the cost estimate for the proposed new reactor at Calvert Cliffs was $5 billion. Since then, UniStar has been reluctant to provide any public cost estimates for construction of the proposed Calvert Cliffs-3 reactor, but in August 2008 hearings before the Maryland Public Service Commission, CEO George Vanderheyden acknowledged that the company's estimates are on the "upper end" of the $4,500 - $6,000 per kilowatt (kWh) level. For a 1600 megawatt reactor such as Calvert Cliffs-3, that would mean construction costs of about $9.6 billion. Even that high figure is likely to be low, since the Pennsylvania utility PPL has posted an estimate of $13-15 billion for precisely the same reactor design at Bell Bend in PA.

Additionally, the original drive for Calvert Cliffs preceded the recent decline in demand for power in the region. Power purchase agreements have yet to be established for Calvert Cliffs. Though "demand for power" does not need to be demonstrated by the reactor owner, demand for power in the region has dropped off due to the market downturn, obviating most or all of the need for Calvert Cliffs.

Allison Fisher, organizer for Public Citizen's Energy Program, Public Citizen said: "Taxpayers should be outraged that they are being put on the hook for a reactor design that has been plagued with huge delays and cost overrun. The same reactor is currently under construction in Finland and France. Both projects have been plagued with delays and cost overruns. The Finnish project is three and a half years behind schedule with a 75 percent cost overrun thus far."

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Atlanta Gas Light Files First Rate Case in Five Years

/PRNewswire/ -- Facing higher operating expenses and declining revenue in a stubborn economy, Atlanta Gas Light today filed an application with the Georgia Public Service Commission (PSC) requesting a monthly increase in base rates of $2.95 for residential customers.

In its first rate case filing in more than five years, Atlanta Gas Light attributes the primary need for the increase to higher compliance and operating costs, including employee expenses and declining customer growth. If granted, it would be the first base rate increase for Atlanta Gas Light since 1993. Revenues from base rates are what the utility uses to provide its core services. Even with the proposed increase, company forecasts indicate revenues collected from customers in 2010-2011 would be lower than the company received in 2005.

For the first time in company history, Atlanta Gas Light has lost more customers than it has added for two consecutive years. In 2009 alone, Atlanta Gas Light experienced a net loss of over 8,000 customers from the system. The impact of a slower rate of new customer additions and higher customer attrition means the fixed costs of the utility are spread over fewer customers, which contributes to the upward pressure on rates.

"Over the past five years, we have taken aggressive steps to control costs and manage our utility expenses," said Suzanne Sitherwood, president, Atlanta Gas Light. "This rate adjustment is necessary to maintain appropriate service levels, to invest in vital programs that will make us more efficient, and to improve our ability to meet our customer needs. We deferred this necessary step as long as we could."

A portion of the increase would support Atlanta Gas Light's ongoing five-year business plan presented in the application. Called "Customer First," the plan includes customer service initiatives such as:

-- Automated Meter Reading Technology, which will equip radio technology
to hundreds of thousands of meters and is expected to improve
efficiency and accuracy and provide real-time consumption data;

-- Re-establishing the Customer Call Center in Atlanta, bringing
approximately 74 jobs to Riverdale, Ga., to better handle customer
care;

-- Improved Technology Systems, intended to provide quicker response
times for marketer and customer services and improved web features for
customer scheduling and personal consumption statistics;

-- Service Call Courtesies and Repair/Replace Vouchers, enabling utility
technicians during service calls to perform minor repairs or leave
behind repair or replacement vouchers for ENERGY STAR appliances. This
program is expected to help avoid service interruption, improve safety
and retain customers on the natural gas system, which keeps costs down
for all ratepayers; and

-- Increased Service Availability, intended to improve response time and
shorten customer wait time for the company to complete orders.


Atlanta Gas Light has included a proposal expected to help hold down future operating expenses by adopting a policy to require the company to share 50 percent of the cost savings resulting from future acquisitions with Atlanta Gas Light customers through lower operating expenses. Two recent acquisitions in Virginia and New Jersey have produced more than $100 million in cost savings since 2005, benefiting residential and commercial Atlanta Gas Light customers.

"A formal policy requiring that Atlanta Gas Light customers receive fifty percent of the cost savings from future acquisitions is the right thing to do," said Hank Linginfelter, executive vice president, AGL Resources. "We have reduced overall corporate service expenses shouldered by Atlanta Gas Light's customers from 90 percent to 48 percent through our most recent transactions, and we are now able to provide shared corporate services at one of the lowest rates in the country among major gas utilities."

The company's rate proposal is expected to increase the average annual residential natural gas bill by about 3 percent. If granted, the new rates would be expected to generate about $54 million annually. The new revenue would support ongoing operations and reset the company's return on equity ($18.5 million), fund new customer service initiatives ($13.4 million), collect a portion of savings from mergers benefiting Atlanta Gas Light customers ($14.5 million), and restructure depreciation expenses ($7.7 million). The changes would go into effect in November 2010 and would be reflected in Atlanta Gas Light's base rate charge assessed to customers by their certificated gas marketer.

The PSC will hold public hearings on the company's application beginning in August and will evaluate the case under its legal obligation to balance the need for the consumer to receive reliable services at reasonable rates with the need to provide the utility with the opportunity to earn a reasonable return on its investment.

About Atlanta Gas Light

Atlanta Gas Light, a wholly owned subsidiary of AGL Resources (NYSE:AGL) , provides natural gas delivery service to more than 1.5 million customers in Georgia. In operation since 1856, the company is one of the oldest corporations in the state. For more information, visit www.atlantagaslight.com.

About AGL Resources

AGL Resources (NYSE:AGL) , an Atlanta-based energy services company, serves approximately 2.3 million customers in six states. The company also owns Houston-based Sequent Energy Management, an asset manager serving natural gas wholesale customers throughout North America. As an 85-percent owner in the SouthStar partnership, AGL Resources markets natural gas to consumers in Georgia under the Georgia Natural Gas brand. The company also owns and operates Jefferson Island Storage & Hub, a high-deliverability natural gas storage facility near the Henry Hub in Louisiana. For more information, visit www.aglresources.com.

Forward-Looking Statements

Certain expectations and projections regarding our future performance referenced in this press release are forward-looking statements. Forward - looking statements involve matters that are not historical facts and because these statements involve anticipated events or conditions, forward-looking statements often include words such as "anticipate," "assume," "believe," "can," "could," "estimate," "expect," "forecast," "future," "goal," "indicate," "intend," "may," "outlook," "plan," "potential," "predict," "project," "seek," "should," "target," "would," or similar expressions. Forward-looking statements in this press release include, without limitation, the expected revenues to be collected from Atlanta Gas Light customers in 2010-2011; including the underlying components , such as forecasted declining revenues, higher operating expenses and the sharing of cost savings from future acquisitions, driving the proposed higher base rates \, and the projected operational, customer and other benefits from the results of the "Customer First" five-year business plan and related initiatives; and future operating expenses related to future acquisitions.

Our expectations are not guarantees and are based on currently available competitive, financial and economic data along with our operating plans. While we believe our expectations are reasonable in view of the currently available information, our expectations are subject to future events, risks and uncertainties, and there are several factors - many beyond our control - that could cause results to differ significantly from our expectations.

Such events, risks and uncertainties include, but are not limited to, changes in price, supply and demand for natural gas and related products; the impact of changes in state and federal legislation and regulation including changes related to climate change; actions taken by government agencies on rates and other matters; utility and energy industry consolidation; the impact on cost and timeliness of construction projects by government and other approvals, development project delays, adequacy of supply of diversified vendors, and unexpected change in project costs, including the cost of funds to finance these projects; direct or indirect effects on our business, financial condition or liquidity resulting from a change in our credit ratings or the credit ratings of our counterparties or competitors; interest rate fluctuations; financial market conditions, including recent disruptions in the capital markets and lending environment and the current economic downturn; the impact of natural disasters such as hurricanes on the supply and price of natural gas; acts of war or terrorism; and other factors which are described in detail in our filings with the Securities and Exchange Commission, which we incorporate by reference in this press release. Forward-looking statements are only as of the date they are made, and we do not undertake to update these statements to reflect subsequent changes.

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