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Elizabethtown Gas Seeks to Recover Cost of Upgrading Aging Distribution System

Elizabethtown Gas, a unit of AGL Resources Inc., last week petitioned New Jersey regulators to establish a Pipeline Replacement Program (PRP) Recovery Rider allowing it to collect costs from customers for the accelerated replacement of about 88 miles of elevated pressure 8- to 12-inch cast iron main on its distribution system.

The three-year PRP program initiative is expected to cost a total of $42 million, according the Union, NJ-based local distribution company. In October 2006, the utility would begin recovering about $1 per month per average customer bill through the rider program, and it would continue for three years through the effective date of new base rates. Under a prior order approved by the New Jersey Board of Public Utilities, new base rates for Elizabethtown Gas are scheduled to start in January 2010.

"Accelerating the replacement of the 8-inch to 12-inch main will further enhance the safety and reliability of our natural gas distribution system," said Eric Martinez, vice president and general manager of Elizabethtown Gas. He noted that aging infrastructure dating back to the late 1800s to the 1950s would be replaced in a number of New Jersey communities.

Elizabethtown Gas, which serves 265,000 residential, business and industrial natural gas customers in New Jersey, currently is replacing small diameter (4- to 6-inch) bare-steel and cast-iron main. The project is due to be completed in 2008.

In addition to Elizabethtown Gas, AGL Resources, an Atlanta-based energy services holding company, has a number of other gas utility subsidiaries, including Atlanta Gas Light, Virginia Natural Gas, Florida City Gas, Chattanooga Gas and Elkton Gas in Maryland.

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