Peachtree Natural Gas, the bankrupt supplier to over 170,000customers in Georgia, and Atlanta Gas Light (AGL), Peachtree’sbiggest creditor, forged an interim solution in bankruptcy courtyesterday in which Peachtree will continue serving its customersuntil the court reconvenes on Nov. 15. Both the LDC and the courthave been assured that Peachtree can reliably provide service forthe 10-day period.

In the meantime, however, the Georgia Public Service Commission(GPSC) was busy yesterday preparing a process in case a supplier oflast resort is needed. After holding a 24-hour RFP, the GPSCselected Shell Energy Services to be the interim pooler until April1, 2000.

“This probably should have been done during the make-up of thederegulation legislation, but this whole process has been alearning experience,” said Bubba McDonald, a GPSC Commissioner. “Wedidn’t think about it until a situation came up that brought it toour attention.” The commissioner pointed out that the interimpooler process was undertaken as a preparatory measure and in noway is specific to Peachtree’s customers.

Under the state’s gas deregulation law, AGL is supposed to bethe supplier of last resort (SOLR). According to Bobby Baker,another GPSC Commissioner, the LDC didn’t want the job. “AGL hasmade it clear that it does not want to be the SOLR. If AGL isn’tinterested and there is another marketer willing to step up to theplate, then that is fine.” Baker said four other marketers filed tobe interim poolers. Scana, Reliant Energy Services, Energy Americaand Southstar did not get the assignment.

The agreement yesterday between Peachtree and AGL is similar tothe one made last week, in which Peachtree bought the right to keepdistributing gas to its customers by supplying a fee to AGL and itsother creditors. This stint will cost the Roswell, GA-basedmarketer $2.2 million in fees to AGL. Peachtree is buying its timewith the hope that it can finalize its attempted sale to CoServ, aCorinth, TX-based electric cooperative. Although a letter of intentto buy Peachtree has been signed by CoServ, the cooperative isstill performing due diligence on the transaction and no sale hasbeen announced.

“Although we do not want to make a practice of this, we’rebasically operating in a pay as you go fashion,” said MillicentHunter, a spokeswoman for AGL. “Our priorities are the reliabilityof service for the customers and the integrity of the system. Asthe situation currently stands, these interim solutions in whichPeachtree basically puts up the money to continue doing business,is the best way to maintain reliability at this point.”

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