AGL, VNG Enter into an Energy Services' First
Following an approval handed down by the Virginia State
Corporation Commission, AGL Energy Services will now provide energy
services including natural gas acquisition and gas transportation
management to Norfolk-based Virginia Natural Gas' 230,000 customers
in southeastern Virginia.
"This is a unique opportunity to create value for the Virginia
consumer which translates into savings, lower rates and is a means
for the utility to continue managing its gas assets in a cost
effective and efficient manner," said Hank Linginfelter, president
Under the agreement, which is a first of its kind in the state,
VNG will allow AGL Energy Services (AGLES) to buy and sell natural
gas, manage Virginia Natural Gas' (VNG) interstate pipeline
transportation and storage contracted assets and two propane
The contract also stipulates that AGLES, an AGL Resources
subsidiary, is accountable for maintaining service reliability at
VNG's traditional levels and that AGLES may choose to partner with
other companies to achieve greater economies of scale while adding
value to VNG's customer base.
"This agreement would enable Virginia Natural Gas Company
customers to realize benefits of innovative natural gas procurement
and asset management strategies that might not have been available
to us as a stand-alone company," said Linginfelter. "We hope that
by bringing together the procurement and asset management services,
we can achieve competencies that will eliminate duplication of
personnel and facilities, so that the price to customers of VNG's
delivered natural gas can be reduced."
The commission also approved a sharing revenues mechanism, which
will allow AGLES and VNG to share the revenues gained from these
services. Customers' savings from the program will show up in the
form of credits through the purchased gas adjustment clause.
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