Chattanooga Gas Company Reduces Rates by 12 Percent and Seeks Approval to Credit Customers $43 from 2005-2006 Asset Management SharingFebruary 1, 2006
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Feb. 1, 2006--Chattanooga Gas Company (CGC), a subsidiary of Atlanta-based AGL Resources (NYSE: ATG), today announced the Tennessee Regulatory Authority (TRA) has approved the company's request to reduce the gas cost portion of residential customer bills by 12 percent beginning today, which will save the average residential customer $20 and $17 on their February and March bills, respectively. CGC also has requested the TRA to approve an approximate $43 credit to residential customer bills during the first quarter of 2006 funded by the company's asset management sharing arrangement.
"We want to do everything we can to help our customers who are facing higher energy costs this winter," said Steve Lindsey, vice president and general manager of Chattanooga Gas. "We're still facing record-high natural gas prices. However, thanks to our asset management program, and the good fortune of warmer weather, our gas costs are moderating. We want to pass along these savings to customers as soon as possible."
CGC makes no money on the natural gas it purchases on behalf of customers, charging them a "pass through" charge to cover the cost. This charge is calculated using a rate known as the Purchased Gas Adjustment (PGA). CGC's current natural gas costs declined in January due to warmer than average winter temperatures, production coming back in the Gulf of Mexico after hurricanes Katrina and Rita, and relatively high national natural gas storage levels. To pass these cost savings to customers as soon as possible, CGC asked the TRA to allow the company to reduce its PGA rate by approximately 12 percent for billing cycles beginning on Feb. 1, 2006.
This reduction will change a typical residential customer's per Therm rate from $1.3414/Therm to $1.1831/Therm - a cost savings of $.1583/Therm. Last February, the average CGC customer was billed for 129 Therms. Based on this usage, the average February residential customer bill will be roughly $20 less than it would have been before the rate reduction (129 X $0.1583=$20.42). Customers are expected to save $17 on March bills. Actual usage per customer will be determined by the weather and individual requirements.
To provide customers with even more relief this winter heating season, CGC filed a petition with the TRA on Jan. 30, 2006 to accelerate the sharing of money with residential customers available to the company under its asset management program. In 2005, the program generated roughly $4.5 million. CGC would like to credit the usual half of this amount based on usage to residential customers as a lump sum payment during the first quarter of 2006 rather than the usual monthly payment. The other half would go as usual to industrial and commercial customers.
"As a result of recent market conditions and the accelerated payout schedule, the asset management plan, especially this year, is a tremendous benefit for Chattanooga Gas customers," said Lindsey.
Managed by Sequent Energy Management, another AGL Resources company, the progressive value sharing program since 2003 will have saved CGC customers more than $7 million in natural gas costs once the TRA approves CGC's request to accelerate $4.5 million credit.
In addition, CGC would like to increase the total amount being refunded through the program to $5 million this winter to reflect an advance payment for some of the asset management sharing projected to be generated during 2006. Sequent has agreed to make an advance payment of $500,000 from the expected 2006 calendar year asset management sharing.
If the TRA approves CGC's request to accelerating the asset management sharing from 2005 and advance a portion of the sharing from 2006, residential customers will receive a credit totaling $43 on their bills during the first quarter of 2006.
"Chattanooga Gas has a proud tradition of giving back to the communities we serve in Tennessee," said Lindsey. "Doing all we can to help our friends and neighbors stay warm during the winter months is part of our core values and mission."
In December, CGC distributed energy assistance grants totaling $50,000 to two city department of human services in Tennessee -- $45,000 to the Department of Human Services (City of Chattanooga), and $5,000 to the Department of Human Services (City of Cleveland). The corporate funds are being used to help low-income elderly residents in the Chattanooga area stay warm this winter by providing heating bill assistance.
About Chattanooga Gas Chattanooga Gas, a wholly owned subsidiary of AGL Resources (NYSE: ATG), provides retail natural gas sales and transportation services to approximately 61,000 customers in Hamilton and Bradley counties in southeast Tennessee. The Chattanooga Gas service area includes the communities of Chattanooga, Cleveland, Red Bank, East Ridge, Lookout Mountain and Signal Mountain. The Chattanooga Gas natural gas pipeline system delivers approximately 20 billion cubic feet of gas per year. For more information, please see
www.chattanoogagas.com.
About Sequent Energy Management Sequent Energy Management, a wholly owned subsidiary of AGL Resources Inc. (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.
About AGL Resources AGL Resources (NYSE: ATG), an Atlanta-based energy services holding company, serves 2.2 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 No. 250 in the Forbes Platinum 400 in 2006 as well as a Fortune 1000 company in 2005, AGL Resources reported revenue of $2.7 billion and net income of $193 million in 2005. 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.
CONTACT: AGL Resources Public Affairs Martha Monfried, 908-662-8190 Cellular: 404-274-2269 mmonfrie@aglresources.com SOURCE: AGL Resources