New Jersey regulators last Tuesday approved the sale of NUI Corp., which operates Elizabethtown Gas in the state as well as other gas utilities, to Atlanta, GA-based AGL Resources Inc.

The action by the New Jersey Board of Public Utilities (BPU) followed similar approvals from state regulators in Maryland and Virginia. Florida, where NUI also operates a gas utility, only requires notification 10 days after the closing of the sale. The transaction still must be authorized by the Securities and Exchange Commission (SEC). Barring any delays at the SEC, AGL Resources said it expects to close the sale by the end of the year.

Assuming the SEC approves the transaction and the closing occurs, AGL Resources reported it will pay all NUI shareholders of record $13.70 per share to conclude the purchase. Under the purchase agreement, AGL Resources will assume the outstanding portion of the $28 million refund still owed to Elizabethtown Gas customers along with the remaining portion of a $2 million penalty ordered by the BPU.

It’s estimated AGL Resources with pay $690 million for NUI, including $220 million in cash and the rest in debt assumption.

“We are proud to step up and keep the promises made. We intend to restore customer confidence in Elizabethtown Gas’ operations and demonstrate our commitment to New Jersey communities from Day One,” said Kevin P. Madden, executive vice president of AGL Resources’ utility operations. If the sale closes as planned, Elizabethtown Gas customers can expected to see the refund reflected as rebates on their bills starting in January 2005, according to the company.

Notably, the approval features a five-year rate freeze, with a performance-based rate plan in the fourth and fifth years that would enable customers to share in the company’s success, AGL Resources said. The deal also calls for Sequent Energy Management, an AGL Resources subsidiary, to manage Elizabethtown Gas assets.

In addition to Elizabethtown Gas, NUI’s other gas utility operations include City Gas Co. in Florida and Elkton Gas in Maryland. AGL Resources’ gas utilities include Atlanta Gas Light, Virginia Natural Gas and Chattanooga Gas, which serve approximately 1.8 million customers in three states.

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