Georgia Public Service Commission Extends Atlanta Gas Light's Asset Management Agreement with Sequent Energy Management; Decision Will Provide Additional Customer Value
January 11, 2006
ATLANTA--(BUSINESS WIRE)--Jan. 11, 2006--Atlanta Gas Light, a subsidiary of Atlanta-based AGL Resources (NYSE: ATG), welcomes the Georgia Public Service Commission's (Commission) decision yesterday to extend the company's asset management agreement with Sequent Energy Management (Sequent), another AGL Resources company.
"Atlanta Gas Light commends the majority of the Commission for acting on the staff's recommendation to reconsider its December 21, 2005 order and extend the company's asset management agreement with Sequent for an additional two years," said Suzanne Sitherwood, president of Atlanta Gas Light. "Current market conditions provide Sequent with the opportunity to generate additional value for Georgia customers via the Universal Service Fund (USF) that would not have been realized had the current agreement expired on March 31, 2006 and we had to go out to bid."
"The Commission's decision locks in this additional value for consumers," added Sitherwood. "Atlanta Gas Light will not be required to take the risk that could otherwise have resulted from a request for proposal process that may have missed current market opportunities and produced lower contributions to the USF."
The Commission uses the USF to, among other things, provide energy assistance funds to low income consumers and to provide funds to extend Atlanta Gas Light's system to new customers in the public interest.
Since 2003 under the Asset Optimization and Agency Agreement (Agreement), which was extended yesterday by the Commission, Sequent has managed Atlanta Gas Light's storage, gas supply and transportation agreements, and certain inventories and other assets associated with those agreements. Sequent previously contributed 50 percent of the net margin from these asset management activities to the USF.
Under yesterday's order, Sequent on April 1, 2006 will increase its aggregate net sharing percentage to the USF from 50 to 60 percent on the majority of transactions the asset manager initiates. Capacity release and off-system sales transactions will continue to be governed by statute. Under the Agreement, Atlanta Gas Light retains operational control of system critical assets, including the ability to recall them at any time if needed for firm customers.
From 2003 to date, Sequent's contributions to the USF have totaled more than $11 million ($3.2 million in 2003, $4.3 million in 2004 and $3.6 million to date in 2005).
"With recent market conditions, we expect that Sequent will contribute more value to the USF this winter than ever before," said Doug Schantz, president of Sequent. "Based on current market conditions and the expertise Sequent has developed around these assets, our contributions to the USF in 2006 should be robust, especially compared with the opportunities that would have been lost had the agreement not been extended beyond the previous order's March 2006 expiration date."About AGL Resources
AGL Resources (NYSE: ATG), an Atlanta-based energy services holding company, serves 2.3 million customers in six states through its utility subsidiaries - Atlanta Gas Light, Elizabethtown Gas in New Jersey, Virginia Natural Gas, Florida City Gas, Chattanooga Gas, and Elkton Gas in Maryland. Ranked by Forbes as one of the 10 Best Managed Utilities and number 250 in the Forbes Platinum 400 in 2006 and a Fortune 1000 company in 2005, AGL Resources reported revenue of $1.8 billion and net income of $153 million in 2004. The company also owns Houston-based Sequent Energy Management, an asset manager serving natural gas wholesale customers throughout the East and Midwest. As a 70 percent owner in the SouthStar partnership, AGL Resources markets natural gas to consumers in Georgia under the Georgia Natural Gas brand. AGL Networks, the company's telecommunications subsidiary, owns and operates fiber optic networks in Atlanta and Phoenix. 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
. About Atlanta Gas Light
Atlanta Gas Light, a wholly owned subsidiary of AGL Resources (NYSE: ATG), provides delivery service to more than 1.6 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 Sequent Energy Management
Sequent Energy Management, a wholly owned subsidiary of AGL Resources (NYSE: ATG), is a Houston-based entity focusing on asset management and optimization, producer services, wholesale marketing and risk management. For more information, visit www.sequentenergy.com
CONTACT: AGL Resources Media Relations Nick Gold, 404-584-3457 Cell: 404-275-9501 email@example.com SOURCE: AGL Resources