Atlanta Gas Light reaches settlement in Southern Rate Case
March 28, 2000
Georgia consumers to benefit from $10-$30 million in annual savings March 28, 2000 - Atlanta Gas Light Company (AGLC) has negotiated a series of agreements that will result in lower natural gas costs for Georgians while ensuring system reliability. The separate agreements were reached by AGLC with Southern Natural Gas Pipeline (SNG) and Transcontinental Gas Pipe Line Company (Transco).
The first significant result for Georgia's retail customers is the settlement of SNG's proposed rate increase currently pending before the Federal Energy Regulatory Commission (FERC). With the new, three-year delivery and storage agreement, Georgia consumers should see annual savings that range from $10-$30 million based on SNG's proposed rates filed at the FERC last fall. The settlement agreement, once approved by the FERC would be retroactive to March 1, 2000.
SNG is AGLC's largest interstate delivery supplier, representing approximately 70 percent of interstate delivery service to Georgia. AGLC and Georgia Public Service Commission (PSC) staff filed joint testimony at the PSC on March 27 in support of an amendment approving the three-year term extension for SNG delivery and storage service. AGLC will also file comments with the FERC today in support of the settlement. A decision from the PSC is expected in mid-April. Virtually all of SNG's customers and the FERC staff have expressed support of the settlement. Southern has implemented the settlement rates on an interim basis effective March 1, 2000. Based on these facts AGLC fully expects FERC approval soon.
AGLC also announced a ten-year commitment for 61,160 decatherms per day of firm delivery service on Transco's SouthCoast Expansion Project beginning November 1, 2000. SouthCoast is an expansion of Transco's existing interstate pipeline. Transco provides approximately 25 percent of AGLC's firm delivery service to Georgia. With the addition of SouthCoast, that number grows to 30 percent.
The SouthCoast project meets a number of AGLC's critical operational objectives, including increased operational flexibility, added reliability and lower customer costs by up to $2 million per year.
According to Jim Scabareti, AGLC Vice President, Gas Services, "SouthCoast is an obvious choice for enhanced delivery service into AGLC's fastest growing market areas. Further, SouthCoast offers lower costs than current service from other interstate suppliers." Scabareti added that AGLC's ability to negotiate such favorable contracts with SNG and Transco is related to "hard work, tough negotiating and ultimately the effects of deregulation. We've seen competition at the retail level. Now competition is reaching the interstate pipelines serving Georgia. We anticipate the marketers will pass these savings on to the retail customers."