National Fuel Files Petition with the New York State Public Service Commission
December 19 2007 - 10:03AM
Business Wire
Today, National Fuel Gas Distribution Corporation, the Utility
segment of National Fuel Gas Company (NYSE: NFG) (the �Company� or
�National Fuel�), is filing a petition with the New York State
Public Service Commission (�PSC�) seeking the issuance of an Order
compelling New Mountain Vantage GP, L.L.C. and its foreign and
domestic affiliates (collectively, �New Mountain�), to disclose the
full extent of their holdings of shares of the Company�s stock to
determine whether New Mountain�s actions violate the Public Service
Law. In the event New Mountain is found to be in violation of the
Public Service Law, the petition asks the PSC to take such action
as the Public Service Law requires, including but not limited to,
requiring New Mountain to file for the Commission�s permission to
acquire such shares and for the Commission to hold hearings as to
whether such acquisition of shares is in the public interest.
National Fuel is an integrated energy company with five business
segments, including a Utility segment with operations in western
New York. The Company serves more than 500,000 customers in western
New York and has provided safe and reliable natural gas service to
its customers for more than 100 years. New Mountain, a hedge fund
activist shareholder, is advancing a business plan for all of
National Fuel�s operating segments that, the Company believes, is
not in the best interest of the Company�s Utility customers. The
Company further believes that New Mountain is required to have
taken certain action with the PSC before it secured a significant
ownership position in the Company, advanced its business strategy
and presented a list of candidates it wishes to be elected to the
Company�s Board of Directors. The Company, in its petition explains
that the Public Service Law requires that if an entity is pursuing
a controlling interest, either directly or indirectly, in a
regulated public utility, then it must first secure the approval of
the PSC. Such a requirement, the Company believes, is designed to
give the public and regulatory agencies an opportunity to determine
if that entity will be qualified to manage the assets that deliver
essential energy services to the citizens of New York. �We are
proud of our long history of providing safe and reliable service to
our customers and we believe that any entity that is putting itself
in a position to have substantial influence and control over the
way that important service is provided, should have first sought
the necessary Commission review and approval,� said Philip C.
Ackerman, National Fuel�s Chairman and Chief Executive Officer.
�Utility law has developed over time to protect the best interests
of the hundreds of thousands of customers who rely on a local
utility to provide them with the services they need, in a safe and
reliable fashion. We believe that New Mountain�s interests are
focused on short-term gains derived principally from the Company�s
Exploration and Production segment and that it has conveniently
ignored the fundamental rules for this vital operation,� Ackerman
continued. Since earlier this year, New Mountain has advanced a
business strategy for the Company that would, among other things,
break up National Fuel�s integrated structure. The Company believes
that such an action would have a detrimental effect on its
businesses, particularly if the end result were to have the Utility
segment as the remaining, sole substantial asset of the Company.
The Company�s current structure provides certain efficiencies for
the Utility segment that, if lost, would be harmful and costly to
its Utility customers. Last month, the Company filed a similar
petition with the Pennsylvania Public Utility Commission. National
Fuel has also served the citizens of northwestern Pennsylvania for
more than 100 years and currently provides natural gas service to
more than 200,000 customers in that region. The opinions of New
Mountain and the Company differ with regard to the value and wisdom
of its integrated structure and the very nature of some of the
Company�s operations. In a letter sent to New Mountain last week,
the Company said that New Mountain�s analysis of its business
structure and its recommendation for changing that structure are
�flawed by inadequate analysis.� The Company also noted that New
Mountain is lacking in real experience in managing assets in the
energy industry. �We have deep experience in all aspects of the
energy industry and in the utility sector, particularly. Our
Management Team, Board of Directors and employee group as a whole
are fully committed and unquestionably qualified to offer our
customers the kind of service that they need for their safety and
comfort every day. In contrast, New Mountain criticizes management
for approaching its E(xploration) and P(roduction) business from a
utility mindset. We believe that position speaks volumes about how
we differ in valuing the importance of the Utility segment of the
National Fuel Gas Company system and the essential role it plays in
our community,� Ackerman said. National Fuel is an integrated
energy company with $3.9 billion in assets comprised of the
following five operating segments: Utility, Pipeline and Storage,
Exploration and Production, Energy Marketing, and Timber.
Additional information about National Fuel is available on its
Internet Web site: http://www.nationalfuelgas.com or through its
investor information service at 1-800-334-2188. IMPORTANT
INFORMATION AND WHERE TO FIND IT In connection with its 2008 Annual
Meeting, National Fuel Gas Company has filed a preliminary proxy
statement and will be filing a definitive proxy statement,�WHITE
proxy card and other materials with the U.S. Securities and
Exchange Commission (�SEC�). WE URGE INVESTORS TO READ THE PROXY
STATEMENT AND THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
NATIONAL FUEL GAS COMPANY AND THE MATTERS TO BE CONSIDERED AT ITS
ANNUAL MEETING. Investors may contact Morrow & Co., LLC,
National Fuel Gas Company�s proxy advisor for the 2008 Annual
Meeting, at (800) 252-1959 or by email at nfginfo@morrowco.com.
Investors may also obtain a free copy of the proxy statement and
other relevant documents when they become available as well as
other materials filed with the SEC concerning National Fuel Gas
Company at the SEC�s website at http://www.sec.gov. Free copies of
National Fuel Gas Company�s SEC filings are also available on
National Fuel Gas Company�s website at
http://www.nationalfuelgas.com. These materials and other documents
may also be obtained for free from: Secretary, National Fuel Gas
Company, 6363 Main Street, Williamsville, New York 14221, (716)
857-7000. CERTAIN INFORMATION REGARDING PARTICIPANTS IN THE
SOLICITATION National Fuel Gas Company and its directors are, and
certain of its officers and employees may be deemed to be,
participants in the solicitation of proxies from National Fuel Gas
Company�s stockholders with respect to the matters considered at
National Fuel Gas Company�s 2008 Annual Meeting. Information
regarding these directors, and these certain officers and
employees, is included in the preliminary proxy statement on
Schedule 14A filed with the SEC on December 17, 2007, and on
National Fuel Gas Company's website at
http://www.nationalfuelgas.com. Security holders can also obtain
information with respect to the identity of the participants and
potential participants in the solicitation and a description of
their direct or indirect interests, by security holdings or
otherwise, for free, by contacting: Secretary, National Fuel Gas
Company, 6363 Main Street, Williamsville, New York 14221, (716)
857-7000. More detailed information with respect to the identity of
the participants, and their direct or indirect interests, by
security holdings or otherwise, will be set forth in the proxy
statement and other materials to be filed with the SEC in
connection with National Fuel Gas Company�s 2008 Annual Meeting.
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