Following an approval handed down by the Virginia StateCorporation Commission, AGL Energy Services will now provide energyservices including natural gas acquisition and gas transportationmanagement to Norfolk-based Virginia Natural Gas’ 230,000 customersin southeastern Virginia.

“This is a unique opportunity to create value for the Virginiaconsumer which translates into savings, lower rates and is a meansfor the utility to continue managing its gas assets in a costeffective and efficient manner,” said Hank Linginfelter, presidentof VNG.

Under the agreement, which is a first of its kind in the state,VNG will allow AGL Energy Services (AGLES) to buy and sell naturalgas, manage Virginia Natural Gas’ (VNG) interstate pipelinetransportation and storage contracted assets and two propaneplants.

The contract also stipulates that AGLES, an AGL Resourcessubsidiary, is accountable for maintaining service reliability atVNG’s traditional levels and that AGLES may choose to partner withother companies to achieve greater economies of scale while addingvalue to VNG’s customer base.

“This agreement would enable Virginia Natural Gas Companycustomers to realize benefits of innovative natural gas procurementand asset management strategies that might not have been availableto us as a stand-alone company,” said Linginfelter. “We hope thatby bringing together the procurement and asset management services,we can achieve competencies that will eliminate duplication ofpersonnel and facilities, so that the price to customers of VNG’sdelivered natural gas can be reduced.”

The commission also approved a sharing revenues mechanism, whichwill allow AGLES and VNG to share the revenues gained from theseservices. Customers’ savings from the program will show up in theform of credits through the purchased gas adjustment clause.

Alex Steis

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