2013-08-26 20:13:01 -
Recent Regulatory Approvals Support Important Safety and Reliability Upgrades
While Minimizing Impact on Customer Bills
ATLANTA - August 26, 2013 - On August 21, 2013, AGL Resources Inc. (NYSE: GAS)
received unanimous approval from the New Jersey Board of Public Utilities (BPU)
to implement its Accelerated Infrastructure Replacement (AIR) program. The BPU
approved a stipulated agreement previously reached between AGL Resources'
Elizabethtown Gas utility and the BPU Staff that will enable the company to
invest up to $115 million over a four-year period to enhance the safety,
reliability and integrity of the Elizabethtown Gas distribution system. The
program is consistent with the New Jersey Energy Master Plan, which supports
investments in natural gas
infrastructure as a means of reducing energy costs
and enhancing energy security.
Under the terms of the agreement, Elizabethtown Gas will file a rate case no
later than September 1, 2016, at which time the AIR program costs will be
subject to review. During the term of the AIR program, Elizabethtown Gas will
accrue AFUDC (Allowance for Funds Used During Construction) related to project
expenditures during the construction period, and accrue associated carrying
costs from the time the project is placed in service until the time its costs
are recovered through base rates.
The New Jersey infrastructure program approval comes just two weeks following
the approval of another significant AGL Resources' infrastructure enhancement
program, the integrated vintage plastic replacement program (i-VPR) under
Atlanta Gas Light Company in Georgia.
Atlanta Gas Light's vintage plastic pipe replacement program, which was approved
unanimously by the Georgia Public Service Commission (PSC) on August 6, 2013, is
a program to replace more than 750 miles of vintage plastic pipe within the
utility's natural gas distribution system. The program authorizes a phased-in
approach to funding the four-year, $275 million system investment through the
company's existing STRIDE (Strategic Infrastructure Development and Enhancement)
Atlanta Gas Light has more than 3,300 miles of vintage plastic pipe within its
approximate 33,000-mile gas distribution system. Referred to in the industry as
vintage plastic, this classification of pipe was manufactured with certain
resins susceptible to premature degradation depending on service conditions. At
the time of installation, the industry projected a useful life of between 60 and
70 years. Like most gas utilities across the country, Atlanta Gas Light
installed vintage plastic pipe between 1965 and 1984. These plastic pipes are
used for medium and low-pressure applications while protected steel pipe is
reserved for high-pressure use.
The construction program initially will be funded through a surcharge on
customer bills of $0.48 through December 2014. Additional surcharges of $0.48
and $0.49 will be applied in January 2015 and January 2016, respectively, and
will continue through 2025.
Later this year, Atlanta Gas Light will complete its 15-year pipeline
replacement program, which has resulted in the company replacing more than
2,700 miles of aging bare steel and cast iron pipe. Also, this fall the PSC is
expected to consider the second phase of two existing infrastructure programs
that are part of STRIDE. The 10-year system reinforcement program and the
related customer growth program approved in 2009 focus on pressure improvements
to better serve peak day demand, and on economic development expansions to high-
growth areas served by the Atlanta Gas Light system. The second phase of these
programs proposes to invest up to $260 million over a four-year period.
"Our recently approved infrastructure investment programs in Georgia and New
Jersey are vital to maintaining and enhancing the overall reliability, safety
and integrity of our distribution systems in those service areas," said John W.
Somerhalder, chairman, president and chief executive officer of AGL
Resources. "We also have a similar program at Virginia Natural Gas, which was
approved by the Virginia State Corporation Commission in 2012. With new
legislation recently passed in Illinois, we anticipate making a significant
investment in infrastructure enhancement at our largest utility, Nicor Gas, in
the near future."
The new legislation in Illinois, signed into law by Illinois Gov. Pat Quinn in
July, will enable modernization of natural gas infrastructure in the state and
provide a surcharge mechanism for utilities to recover the cost of their
investments in system reliability.
Under the legislation, Nicor Gas could invest up to $150 million annually, over
a nine-year period beginning in 2015, to upgrade certain portions of its
distribution system. The program governing these investments is subject to
review and approval by the Illinois Commerce Commission (ICC). The company
expects to make a proposal to the ICC in 2014.
"We are fortunate to operate in states where our regulators and legislators
recognize the importance of these critical infrastructure programs and support
their implementation in a way that minimizes the overall impact on customer
bills and enables the company to recover its costs in a timely manner," said
Hank Linginfelter, executive vice president of utility operations for AGL
Resources. "We have demonstrated a strong track record of prudent capital
investment in our distribution systems to ensure their reliability and
safety. These recent positive developments support our ability to continue
making those investments to better serve our customers for many years to come."
About AGL Resources
AGL Resources (NYSE: GAS) is an Atlanta-based energy services holding company
with operations in natural gas distribution, retail operations, wholesale
services, midstream operations and cargo shipping. AGL Resources serves
approximately 4.5 million utility customers through its regulated distribution
subsidiaries in seven states. The company also serves approximately 630,000
retail energy customers and approximately 1.2 million customer service contracts
through its SouthStar Energy Services joint venture and Pivotal Home Solutions,
which market natural gas and related home services. Other non-utility businesses
include asset management for natural gas wholesale customers through Sequent
Energy Management, ownership and operation of natural gas storage facilities,
and ownership of Tropical Shipping, one of the largest containerized cargo
carriers serving the Bahamas and Caribbean region. AGL Resources is a member of
the S&P 500 Index. For more information, visit www.aglresources.com.
About Elizabethtown Gas
Elizabethtown Gas, a wholly owned subsidiary of AGL Resources (NYSE: GAS),
provides natural gas delivery service to approximately 276,000 residential,
business and industrial natural gas customers in New Jersey. In operation since
1855, the company serves parts of Union, Middlesex, Sussex, Warren, Hunterdon,
Morris and Mercer counties. For more information, visit www.elizabethtowngas.com
About Atlanta Gas Light
Atlanta Gas Light, a wholly owned subsidiary of AGL Resources (NYSE: GAS),
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 Nicor Gas
Nicor Gas, a wholly owned subsidiary of AGL Resources (NYSE: GAS), is a natural
gas distribution company that serves more than 2 million customers in a service
territory that encompasses most of the northern third of Illinois, excluding the
city of Chicago. For more information, visit www.nicorgas.com.
Certain expectations and projections regarding our future performance referenced
in this press release are forward-looking statements within the meaning of the
United States federal securities laws and are subject to uncertainties and
risks. 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," "proposed," seek," "should," "target,"
"will," "would," or similar
expressions. 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. Forward-
looking statements contained in this press release include, without limitation,
the anticipated impact of new legislation in Illinois and the amount and timing
of infrastructure enhancements by Nicor Gas.
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 any changes
related to climate change; actions taken by government agencies on rates and
other matters; concentration of credit risk; 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, unexpected change in project costs, including the cost
of funds to finance these projects; limits on pipeline capacity; the impact of
acquisitions and divestitures; our ability to successfully integrate operations
that we have or may acquire or develop in the future; direct or indirect effects
on our business, financial condition or liquidity resulting from any change in
our credit ratings, or any change in the credit ratings of our counterparties or
competitors; interest rate fluctuations; financial market conditions, including
disruptions in the capital markets and lending environment; general economic
conditions; uncertainties about environmental issues and the related impact of
such issues, including our environmental remediation plans; the impact of our
depreciation study for Nicor Gas and related legislation; the impact of changes
in weather, including climate change, on the temperature-sensitive portions of
our business; the impact of natural disasters, such as hurricanes, on the supply
and price of natural gas and on our cargo shipping business; acts of war or
terrorism; the outcome of litigation; and other factors discussed elsewhere
herein and in our other filings with the SEC. There also may be other factors
that we do not anticipate or that we do not recognize as material that are not
described in this report that could cause our actual results to differ from our
Forward-looking statements speak only as of the date they are made. We expressly
disclaim any obligation to publicly update or revise any forward-looking
statement, whether as a result of future events, new information or otherwise,
except as required under United States federal securities law.
Director, Investor Relations
Director, External Relations
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