ATLANTA, Oct. 27 /PRNewswire-FirstCall/ -- Following a 4-1
vote today 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.
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 two
high-deliverability natural gas storage facilities: Jefferson
Island Storage & Hub near the Henry Hub in Louisiana and Golden Triangle Storage in
Texas. For more information, visit
www.aglresources.com.
Forward-Looking Statements
Certain expectations and projections regarding our future
performance referenced in this press release, in other reports or
statements we file with the SEC or otherwise release to the public,
and on our website, are forward-looking statements within the
meaning of the U.S. federal securities laws and are subject to
uncertainties and risks. Senior officers and other employees may
also make verbal statements to analysts, investors, regulators, the
media and others that are forward-looking.
Forward-looking statements involve matters that are not
historical facts, such as statements regarding our future
operations, prospects, strategies, financial condition, economic
performance (including growth and earnings), industry conditions
and demand for our products and services. 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
contained in this press release include, without limitation, the
quotes from Suzanne Sitherwood and
the information regarding rate increases and future operations. You
are cautioned not to place undue reliance on our forward-looking
statements. Our expectations are not guarantees and are based on
currently available competitive, financial and economic data along
with our operating plans. While we believe that our expectations
are reasonable in view of currently available information, our
expectations are subject to future events, risks and uncertainties,
and there are numerous 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; 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; the impact of acquisitions and divestitures; 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; general economic conditions;
uncertainties about environmental issues and the related impact of
such issues; 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; acts of war or terrorism; and other factors
which are provided 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. We undertake no 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 U.S.
federal securities law.
SOURCE AGL Resources
Copyright . 27 PR Newswire