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Peachtree Files Suit Against AGL

Peachtree Files Suit Against AGL

The first of the marketers to bow out of natural gas deregulation in Georgia is going on the offensive almost a year after the company filed for bankruptcy. Peachtree Natural Gas which is still in bankruptcy court, filed a $50 million suit against AGL Resources, Atlanta Gas Light and billing provider Utilipro in the State Court of Fulton County.

The marketer claims the defendants "have intentionally, maliciously, and without privilege interfered with existing and prospective contractual and business relations between Peachtree Natural Gas and its potential and existing customers."

"It's something we handle in the normal course of our business. We were not surprised by the suit and we will defend ourselves vigorously in court on this," said AGL's spokesperson Nick Gold. "We feel the suit is without merit."

In the filing, Peachtree claims that Utilipro did not carry out its agreement to provide accurate billing as well as other services. Peachtree said its customer's bills were often mis-calculated, sent to the wrong address, or were never sent in the first place, while Utilipro, which is 80% AGL-owned, provided accurate billing and other collection-related services for customers of AGL Resources' affiliate Georgia Natural Gas.

Peachtree alleges that "AGL, by itself, and in conjunction with its corporate affiliates, including Atlanta Gas Light and Georgia Natural Gas, directed and procured many of Utilipro's failures and violations of its agreements with Peachtree Natural Gas.....to increase Georgia Natural Gas' market share among natural gas customers in Georgia and, ultimately, benefit AGL at Peachtree Natural Gas' expense."

Peachtree filed for bankruptcy in October citing "unexpected capital needs and billing problems." At that time, Deborah Latham, Peachtree's CEO, pointed toward the Georgia Public Service Commission's (GPSC) requirement for suppliers to purchase liquefied natural gas supplies from AGL and delays in billing by Utilipro as the causes for the debt (see NGI, Nov. 1, 1999).

As a result, the Georgia bankruptcy court in November named Shell Energy Services the winning bidder for Peachtree Natural Gas' 170,000 customers. Shell's $19.3 million offering beat out the only other company involved in the bidding, Georgia Natural Gas (see NGI, Nov. 22, 1999).

Earlier this year, Utilipro, which serves electric and gas suppliers in California, Georgia, New Jersey, Nevada, and Pennsylvania, said it was forced to cut staff members and reorganize the company due to deregulation taking hold too slowly. Utilicorp's CEO Brian Gillespie acknowledged the problems with Peachtree, but said the situation in Georgia was not a contributing factor to the reorganization. He said at the time, "Certainly, Peachtree was a good company, but it had other issues besides our billing that caused their problems" (see NGI, April 10).

Gold said his company must respond to the suit within 30 days, but added, "this is just the beginning of this whole process which, as suits play out, could take years."

Alex Steis

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