As Piedmont Natural Gas Co. reported record net income Friday atits annual shareholders meeting in Charlotte, NC, Chairman and CEOJohn H. Maxheim announced his retirement from active operation ofthe company after 22 years. Maxheim said the company’s board hasnamed former Piedmont Natural Gas President and COO Ware F.Schiefer to succeed him as president and CEO.

Last year, Maxheim stepped down as president but retained histitles of chairman and CEO. He will remain chairman but will not beinvolved in the company’s day-to-day activities. Under hisleadership, Piedmont became the second-largest gas utility in theSoutheast and the fastest-growing in the nation in terms ofcustomer additions — Piedmont adds customers at a 5.5% annualrate, three times the national average.

Maxheim leaves a company with a 17.8% annual compound rate ofreturn. The number of customers has surged from 185,000 when tookover in 1978, to 710,000 gas customers today. He was instrumentalin Piedmont’s March 1995 acquisition of Nashville Gas and led theutilities into the deregulated era with the formation of thecompany’s SouthStar joint venture with AGL Resources Inc. andDynegy Inc. Now the company’s joint venture is called DBA GeorgiaNatural Gas Services and serves 490,000 gas customers in Georgia,the largest market share of 15 companies competing in the state.

Piedmont recently entered into an agreement to form a jointventure to combine its propane operations with the propaneoperations of AGL Resources, Atmos Energy and TECO. The combinedentity, to be named US Propane, L.P., will be among the 10 largestpropane retailers in the nation with nearly 200,000 customers inAlabama, Florida, Georgia, Kentucky, North Carolina, South Carolinaand Tennessee.

Meanwhile, Piedmont reported strong earnings growth despite awarm November and December. Earnings were positively affected bySouthStar and from the new Pine Needle LNG joint venture storagefacility with Williams-Transcontinental Gas Pipe Line. The PineNeedle facility began operations in May and SouthStar began servingmost of its customers in the unregulated Georgia market in the fallof 1999.

For the quarter, the company reported net income of $44.1million, an 8.7% increase from the $40.6 million for the similarperiod of the prior year. Basic earnings per share increased 6.8%to $1.41 from $1.32. For the trailing twelve-month period, netincome rose 3.5% from $59.6 million for the previous similar periodto $61.7 million. Basic earnings per share were up 1.5% from theprior year’s trailing twelve-month period. Natural gas grosscustomer additions achieved in FY1999 totaled 34,700, a 5.5% annualcustomer addition growth rate.

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