/PRNewswire/-- Following a 4-1 vote October 27 by the Georgia Public Service Commission (PSC), residential customers of Atlanta Gas Light will receive a 90-cent monthly net increase in service rates effective November 1. The adjustment, the first base rate increase for the company since 1993, equates to an overall increase of one percent for the typical residential customer's annual natural gas bill. The adjustment will be reflected in the monthly Atlanta Gas Light charges as billed by certificated gas marketers to customers.
After weighing evidence and hearing testimony during the last six months, the PSC concluded that a $26.7 million increase in the company's revenue requirement was warranted to provide the company with sufficient revenue to meet reasonable expenses, pay interest on debt, continue to attract capital at favorable rates and provide a reasonable return to shareholders in order to continue to attract investment. The company originally sought $54.2 million in additional revenues in its case filed May 3, 2010, before adjusting the amount in October to $48.2 million to reflect more current economic conditions.
The company expects a final written order to be issued within the next 30 days, at which time parties to the case have 10 days to file for reconsideration of the decision with the PSC.
"Although we made a strong case for a larger revenue requirement to fund our service obligations, we recognize the economic climate weighed heavily on the commission as it worked to find the right balance for the company, our customers and shareholders," said Suzanne Sitherwood, president, Atlanta Gas Light.
"It is never an easy decision to increase rates, particularly in a difficult economy," Sitherwood said. "However, the action by the PSC provides necessary revenues to sustain our operations and meet the growing demands for compliance and safety work, while improving our customer service levels."
The PSC also approved a rate-design change that closes the cost-of-service gap between residential and commercial customers. Small commercial customers with a Designated Design Day Capacity (DDDC) factor of less than 7.0, which includes approximately 82% of all commercial customers, will see no rate increase or a small decrease. Large commercial customers will receive a monthly increase in their total bill similar in percentage to that of residential customers. In addition, monthly rates charged to agricultural customers will be reduced by $73 on average, particularly to bring poultry growers' rates more in line with general commercial accounts and help them better manage peak costs during winter.
The company also was ordered to investigate whether additional senior citizens might be eligible to participate in Atlanta Gas Light's senior discount program. Individuals age 65 or older with annual income of $14,355 or less are eligible to receive a monthly discount of up to $14.00.
Other details and provisions of the decision include:
* Acceptance of a revenue requirement of approximately $450 million, which equates to an unadjusted increase of approximately $1.46 per residential customer.
* Two changes in the company's surcharges totaling approximately $12.1 million annually, which will offset the impact of the rate increase by approximately 56 cents per month on the customer's monthly bill. This includes a temporary shift of $6.5 million from the Universal Service Fund to fund the Senior Citizen Discount Program, and acceptance of an October filing by Atlanta Gas Light to reduce the environmental cost recovery surcharge rate for an annual reduction of $5.6 million.
* Established an authorized return on equity of 10.75 percent, which is within the estimated range of 10.5 percent to 11.25 percent recommended by the company.
* Approval of a capital structure for the company of 51 percent common equity, 44.63 percent long-term debt and 4.37 percent short-term debt.
* A return to a traditional method of calculating depreciation expense using net value methodology with a salvage rate of negative 30 percent.
* Approval of an in-home appliance repair program that permits Atlanta Gas Light service technicians to perform minor repairs of low cost and short duration when responding to the home for other purposes, while providing referrals to Natural Gas Advantage Dealer companies for more substantial repairs or appliance replacements.
* Funding of the new Customer Care Center in Riverdale, Georgia, to better handle customer issues and support 74 new jobs in Georgia.
* Increase the number of service technicians on staff to make them available to reduce the average time to establish service and fulfill other customer orders from five business days to three.
* Adoption of a new acquisition synergy sharing policy that is expected to hold down future operating expenses by incentivizing the company to make prudent utility acquisitions that capture savings for customers while insulating them from risk of increased costs from such transactions. Customers will share equally in any savings from future transactions after the company demonstrates savings through a future proceeding.
* Allocation of $4.4 million in annual revenue to the company to recognize equitable treatment of current and ongoing savings produced from the acquisition by AGL Resources of NUI Corporation. Evidence in the case demonstrated that since 2005 approximately $150 million in savings were generated from previous acquisitions which were applied to reduce Atlanta Gas Light's operating expenses.
* Improvements to technology systems intended to provide quicker response times and greater capacity to perform additional marketer and customer services.
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Showing posts with label psc. Show all posts
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Thursday, October 28, 2010
Sunday, July 4, 2010
Georgia Power Seeks Cost Recovery of Investments in Cleaner Generation, Smart Grid and Environmental Controls
PRNewswire -- Georgia Power on July 1 asked the Georgia Public Service Commission (PSC) for permission to increase its base rates approximately $615 million, or 8.2 percent of the company's retail rates, to recover the costs of investments in cleaner generation sources, power lines, smart grid technologies, environmental controls and energy efficiency programs to meet current and future customer demand.
The proposed change in rates would be effective Jan. 1, 2011.
"Georgia is the fourth-fastest growing state in the nation, and we have invested billions of dollars to serve that growth," said Ann Daiss, Georgia Power vice president, comptroller and chief accounting officer. "We must continue to invest in our infrastructure to maintain the reliable, affordable electricity and high level of customer satisfaction that our customers deserve and expect."
If the request is approved, the typical residential customer using 1,000 kilowatt-hours per month would see an increase of about 10.1 percent, or $10.88. For business customers, the average increase would range from about 7.7 percent to 10.3 percent.
Additional increases, if approved, would become effective in subsequent years through existing and newly proposed cost-recovery mechanisms outlined in the filing. The company currently estimates increases for new generation, environmental controls and demand-side management programs are expected to increase the typical residential customer bill per month by about $5.38 in 2012 and $1.42 in 2013, respectively. These estimates will be updated through future filings with the PSC.
As of December 2009, the company's rates were approximately 14 percent below the national average and 7 percent below the Southeast average. Even with this proposed increase, Georgia Power's rates should remain below the national average, and its customers will be paying lower base rates today than they were in 1991 on an inflation-adjusted basis.
Since the last base-rate case in 2007, Georgia Power has invested almost $5 billion:
-- In reliability and Smart Grid - To ensure a stable and efficient grid,
and reliable service for customers.
-- In cleaner natural gas generation - To ensure adequate and cleaner
energy when customers need it. Plant McDonough Units 4, 5 and 6 are
scheduled to begin serving customers in January 2012, May 2012 and
January 2013.
-- For a cleaner environment - To continue to reduce emissions and meet
federal and state environmental standards. By 2015, the company
anticipates reducing nitrogen oxide emissions by 85 percent and sulfur
dioxide emissions by 95 percent from 1990 levels, and achieving
significant reductions in other emissions.
Georgia Power also is proposing changes to its current accounting order with the PSC that would:
-- Replace large rate changes with smaller, periodic adjustments.
-- Allow customers to benefit from cost controls and proactive management
on a timelier basis.
-- Allow customers to share in unexpected economic and/or weather
impacts.
-- Support a more timely process for review of both past and projected
costs than the current lengthy and complex filings.
-- Help maintain the financial stability of the company and keep
financing costs low.
In addition, the company's plan features new energy-efficiency programs that will help customers control their energy use and save money. It also includes a new electric vehicle rate that encourages customers to charge at lower-cost, off-peak times and pay less for electricity.
The PSC will hold public hearings October through December. A final decision is expected Dec. 21, 2010, with new rates going into effect Jan. 1, 2011.
Georgia Power is the largest subsidiary of Southern Company, one of the nation's largest generators of electricity. The company is an investor-owned, tax-paying utility that serves 2.3 million customers and has operations in all but four of Georgia's 159 counties.
Cautionary Notice Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding Georgia Power's filing with the Georgia PSC to increase retail base rates, implement new base rate tariffs, and modify existing base rate tariffs. There are various factors that could cause actual results to differ materially from those suggested by the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized. These factors include: state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery and the Georgia PSC's review of Georgia Power's 2010 base rate case filing (the final outcome of which may differ materially from Georgia Power's proposal); the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, environmental laws including regulation of water quality, coal combustion byproducts, and emissions of sulfur, nitrogen, carbon, soot, particulate matter, hazardous air pollutants, including mercury, and other substances, and also changes in tax and other laws and regulations to which Georgia Power is subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings or inquiries, including the pending Environmental Protection Agency civil actions against Georgia Power, Federal Energy Regulatory Commission matters, and Internal Revenue Service audits; the effects, extent and timing of the entry of additional competition in the markets in which Georgia Power operates; variations in the demand for electricity, including those related to weather, the general economy and recovery from the recent recession, population and business growth (and declines), and the effect of energy conservation measures; available sources and costs of fuel; effects of inflation; ability to control costs and avoid cost overruns during the development and construction of facilities; investment performance of Georgia Power's employee benefit plans and nuclear decommissioning trusts; advances in technology; potential Department of Energy loan guarantees related to the potential Plant Vogtle expansion; internal restructuring or other restructuring options that may be pursued; the ability of counterparties of Georgia Power to make payments as and when due and to perform as required; the ability to obtain new short- and long-term contracts with wholesale customers; the direct or indirect effect on the business of Georgia Power resulting from terrorist incidents and the threat of terrorist incidents; interest rate fluctuations and financial market conditions and the results of financing efforts, and the credit ratings of Georgia Power; the ability of Georgia Power to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, pandemic health events, such as influenzas, or other similar occurrences; the direct or indirect effects on the business of Georgia Power resulting from incidents affecting the U.S. electric grid or operation of generating resources; the effect of accounting pronouncements issued periodically by standard setting bodies; and other factors discussed in reports filed by Georgia Power from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended Dec. 31, 2009. Georgia Power expressly disclaims any obligation to update these forward looking statements.
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The proposed change in rates would be effective Jan. 1, 2011.
"Georgia is the fourth-fastest growing state in the nation, and we have invested billions of dollars to serve that growth," said Ann Daiss, Georgia Power vice president, comptroller and chief accounting officer. "We must continue to invest in our infrastructure to maintain the reliable, affordable electricity and high level of customer satisfaction that our customers deserve and expect."
If the request is approved, the typical residential customer using 1,000 kilowatt-hours per month would see an increase of about 10.1 percent, or $10.88. For business customers, the average increase would range from about 7.7 percent to 10.3 percent.
Additional increases, if approved, would become effective in subsequent years through existing and newly proposed cost-recovery mechanisms outlined in the filing. The company currently estimates increases for new generation, environmental controls and demand-side management programs are expected to increase the typical residential customer bill per month by about $5.38 in 2012 and $1.42 in 2013, respectively. These estimates will be updated through future filings with the PSC.
As of December 2009, the company's rates were approximately 14 percent below the national average and 7 percent below the Southeast average. Even with this proposed increase, Georgia Power's rates should remain below the national average, and its customers will be paying lower base rates today than they were in 1991 on an inflation-adjusted basis.
Since the last base-rate case in 2007, Georgia Power has invested almost $5 billion:
-- In reliability and Smart Grid - To ensure a stable and efficient grid,
and reliable service for customers.
-- In cleaner natural gas generation - To ensure adequate and cleaner
energy when customers need it. Plant McDonough Units 4, 5 and 6 are
scheduled to begin serving customers in January 2012, May 2012 and
January 2013.
-- For a cleaner environment - To continue to reduce emissions and meet
federal and state environmental standards. By 2015, the company
anticipates reducing nitrogen oxide emissions by 85 percent and sulfur
dioxide emissions by 95 percent from 1990 levels, and achieving
significant reductions in other emissions.
Georgia Power also is proposing changes to its current accounting order with the PSC that would:
-- Replace large rate changes with smaller, periodic adjustments.
-- Allow customers to benefit from cost controls and proactive management
on a timelier basis.
-- Allow customers to share in unexpected economic and/or weather
impacts.
-- Support a more timely process for review of both past and projected
costs than the current lengthy and complex filings.
-- Help maintain the financial stability of the company and keep
financing costs low.
In addition, the company's plan features new energy-efficiency programs that will help customers control their energy use and save money. It also includes a new electric vehicle rate that encourages customers to charge at lower-cost, off-peak times and pay less for electricity.
The PSC will hold public hearings October through December. A final decision is expected Dec. 21, 2010, with new rates going into effect Jan. 1, 2011.
Georgia Power is the largest subsidiary of Southern Company, one of the nation's largest generators of electricity. The company is an investor-owned, tax-paying utility that serves 2.3 million customers and has operations in all but four of Georgia's 159 counties.
Cautionary Notice Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding Georgia Power's filing with the Georgia PSC to increase retail base rates, implement new base rate tariffs, and modify existing base rate tariffs. There are various factors that could cause actual results to differ materially from those suggested by the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized. These factors include: state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery and the Georgia PSC's review of Georgia Power's 2010 base rate case filing (the final outcome of which may differ materially from Georgia Power's proposal); the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, environmental laws including regulation of water quality, coal combustion byproducts, and emissions of sulfur, nitrogen, carbon, soot, particulate matter, hazardous air pollutants, including mercury, and other substances, and also changes in tax and other laws and regulations to which Georgia Power is subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings or inquiries, including the pending Environmental Protection Agency civil actions against Georgia Power, Federal Energy Regulatory Commission matters, and Internal Revenue Service audits; the effects, extent and timing of the entry of additional competition in the markets in which Georgia Power operates; variations in the demand for electricity, including those related to weather, the general economy and recovery from the recent recession, population and business growth (and declines), and the effect of energy conservation measures; available sources and costs of fuel; effects of inflation; ability to control costs and avoid cost overruns during the development and construction of facilities; investment performance of Georgia Power's employee benefit plans and nuclear decommissioning trusts; advances in technology; potential Department of Energy loan guarantees related to the potential Plant Vogtle expansion; internal restructuring or other restructuring options that may be pursued; the ability of counterparties of Georgia Power to make payments as and when due and to perform as required; the ability to obtain new short- and long-term contracts with wholesale customers; the direct or indirect effect on the business of Georgia Power resulting from terrorist incidents and the threat of terrorist incidents; interest rate fluctuations and financial market conditions and the results of financing efforts, and the credit ratings of Georgia Power; the ability of Georgia Power to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, pandemic health events, such as influenzas, or other similar occurrences; the direct or indirect effects on the business of Georgia Power resulting from incidents affecting the U.S. electric grid or operation of generating resources; the effect of accounting pronouncements issued periodically by standard setting bodies; and other factors discussed in reports filed by Georgia Power from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended Dec. 31, 2009. Georgia Power expressly disclaims any obligation to update these forward looking statements.
-----
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Monday, May 3, 2010
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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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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Tuesday, January 19, 2010
Atlanta Gas Light STRIDES Forward with Pilot Program Designed to Encourage Economic Growth
/PRNewswire/ -- Atlanta Gas Light received approval from the Georgia Public Service Commission (PSC) today on a new program designed to encourage economic growth and spur the addition of new customers under the Georgia Strategic Infrastructure Development and Enhancement Program or (STRIDE). The new program will not increase monthly rates to consumers, but instead will be collected through the existing STRIDE surcharge for an additional three years.
The program, known as the Integrated Customer Growth Program or i-CGP, will allow Atlanta Gas Light to invest up to $45 million to extend its pipeline facilities to serve customers without pipeline access. The new program will also allow Atlanta Gas Light to install pipelines to create new economic development corridors in order to help spur growth.
The new line extension program under i-CGP is available for both residential and commercial customers. Currently many customers that want natural gas service and who are not located near an existing pipeline are required to make a cash payment to have service established. This has been a significant disincentive, particularly under the current economic conditions. The i-CGP program will reduce or eliminate this requirement for many potential customers.
The new strategic corridor development program will allow Atlanta Gas Light to make major investments to extend its gas distribution facilities to areas where growth is forecasted, or to locations where existing development does not have access to natural gas. This will be a new resource that will allow Atlanta Gas Light to work with state and local economic development officials to attract new business, with the potential of bringing jobs to Georgia.
"The Georgia Public Service Commission has given Atlanta Gas Light a new regulatory framework to restore growth on our system and help keep the pressure to increase rates down," said Suzanne Sitherwood, president, Atlanta Gas Light. "It also allows us to be a partner to spur economic development in more communities throughout the state where natural gas service is not presently available."
To avoid an increase in monthly rates due to the program, i-CGP will extend the duration of the STRIDE program by three years.
Atlanta Gas Light received approval from the PSC for its STRIDE program in October. STRIDE will install new pipeline and liquefied natural gas facilities throughout metro Atlanta to improve system reliability and operational performance on peak demand days. The first three year construction program of $175.7 million is underway and should be completed by 2012.
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The program, known as the Integrated Customer Growth Program or i-CGP, will allow Atlanta Gas Light to invest up to $45 million to extend its pipeline facilities to serve customers without pipeline access. The new program will also allow Atlanta Gas Light to install pipelines to create new economic development corridors in order to help spur growth.
The new line extension program under i-CGP is available for both residential and commercial customers. Currently many customers that want natural gas service and who are not located near an existing pipeline are required to make a cash payment to have service established. This has been a significant disincentive, particularly under the current economic conditions. The i-CGP program will reduce or eliminate this requirement for many potential customers.
The new strategic corridor development program will allow Atlanta Gas Light to make major investments to extend its gas distribution facilities to areas where growth is forecasted, or to locations where existing development does not have access to natural gas. This will be a new resource that will allow Atlanta Gas Light to work with state and local economic development officials to attract new business, with the potential of bringing jobs to Georgia.
"The Georgia Public Service Commission has given Atlanta Gas Light a new regulatory framework to restore growth on our system and help keep the pressure to increase rates down," said Suzanne Sitherwood, president, Atlanta Gas Light. "It also allows us to be a partner to spur economic development in more communities throughout the state where natural gas service is not presently available."
To avoid an increase in monthly rates due to the program, i-CGP will extend the duration of the STRIDE program by three years.
Atlanta Gas Light received approval from the PSC for its STRIDE program in October. STRIDE will install new pipeline and liquefied natural gas facilities throughout metro Atlanta to improve system reliability and operational performance on peak demand days. The first three year construction program of $175.7 million is underway and should be completed by 2012.
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