Highland Energy, a wholly owned competitive market subsidiary of RGC Resources, Inc., based in Roanoke, VA, says it has entered into an agreement to sell gas supply contracts along with related business records to Atmos Energy Marketing LLC for $414,270.
Atmos will pay Highland Energy $233,216 at closing in August. The remaining $181,054 will be paid by Atmos on the first anniversary of the closing provided that all customers with assigned contracts remain customers of Atmos Energy as of the anniversary date. The latter amount will be adjusted downward by a prescribed amount to the extent customers leave or reduce their usage by a specified amount.
Highland provided natural gas to medium and large commercial/industrial interruptible customers. Its parent, RBC, operates two gas utilities, Roanoke Gas in Virginia and Bluefield Gas in Virginia and West Virginia.
As a result of the sale, RGC recognized a loss of $147,000 related to the unassigned basis (the transportation component of the gas purchase agreements) not acquired by Atmos. The loss reflects the difference in the original cost of such basis in excess of the current net realizable value that Highland Energy expects to receive for resale of the basis in current gas market conditions.
The date of transfer is set as the date from the first meter read performed for each of the end-user customers on or after Aug. 1.
Highland Energy and RGC Resources agreed not sell any gas to an existing customer at any facility serviced under the assigned contracts through with Atmos until July 1, 2009 with the exception of tariff gas sales by a public utility subsidiary or affiliate.
Atmos Energy, based in Dallas, TX, is the largest pure natural gas distributor in the United States, delivering natural gas to 3.2 million residential, commercial, industrial, agricultural and public-authority customers.
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