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AGL, VNG Enter into an Energy Services' First

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 of 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 natural gas, manage Virginia Natural Gas' (VNG) interstate pipeline transportation and storage contracted assets and two propane plants.

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.

Alex Steis

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