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Atlanta Gas Light Company Files Plan to Accelerate Infrastructure Deployment While Natural Gas Prices Are Low

ATLANTA – Dec. 1, 2017 – As natural gas prices hover at twenty year lows and customers are paying less today for gas service than 10 years ago, Atlanta Gas Light Company (“Atlanta Gas Light”) is asking the state Public Service Commission (“PSC”) for approval to raise basic service rates for the average residential customer by 98 cents monthly, in part to pay for accelerated infrastructure projects. Approximately fifty percent of the increase is necessary to fund higher compliance costs, such as federal safety mandates, and higher operating expenses, such as rising requests by telecommunications companies to locate natural gas lines when laying fiber optic cable. 

Atlanta Gas Light’s rates are governed under a ratemaking mechanism known as GRAM (Georgia Rate Adjustment Mechanism).  The PSC requires Atlanta Gas Light to make annual filings that include certain financials and capital expenditure plans used in determining basic service rates.  In its December 1, 2017 GRAM filing, Atlanta Gas Light seeks an increase of approximately $22.3 million, with nearly fifty percent of the increase, or just over $10 million, going towards pipeline projects that boost capacity for future growth and serve customers on the coldest days of the year, extend services to underserved or unserved areas of the state, and replace aging vintage pipe nearing the end of its useful life.

In a public service video supporting the filing released to the PSC and on the Company’s website, found here, Atlanta Gas Light touts its accomplishments in system infrastructure improvements, much of which have been undertaken since natural gas prices plunged in 2009 as abundant shale supplies hit the market.  Infrastructure accomplishments include:

  • Complete replacement of 2,712 miles of cast-iron and bare steel pipe.
  • Removal of a large portion (756 miles) of aging vintage pipe susceptible to premature degradation.
  • Installation of 126 miles of new pipelines needed to maintain service to 200,000 customers and also boost capacity and provide for future system growth.
  • Line extensions into under served areas for economic development projects or to provide service to first-time customers.

In the public service video, Atlanta Gas Light President Bryan Batson asks the PSC to “stay the course” and allow the company to continue to accelerate system improvements for the next three years while natural gas prices and borrowing costs remain low. 

“Deferring these investments, perhaps to a time when gas rates and borrowing costs are significantly higher, only makes it more expensive for our customers in the long-run,” says Batson.  “These continued investments in our system allow Atlanta Gas Light to meet our mission of safely providing clean and abundant energy to a growing Georgia at affordable rates, just as we have done for over 160 years,” he says in the video’s closing.

To illustrate to customers the benefit of accelerating the infrastructure improvements while natural gas prices are forecasted to stay low, the Company released a comparison of what customers were paying in total charges (delivery rates and gas costs) in 2016 versus 2007. Based on the comparison, which uses actual pricing offered by natural gas marketers, customers paid $214 less on average than 10 years ago.

The PSC is expected to establish a scheduling order in the coming weeks to review the request. If approved, the new rates would go into effect no later than June 1, 2018.  Even with the adjustment going into effect, a rate study performed by an independent national consulting firm, Concentric Energy Advisors, indicates Atlanta Gas Light’s residential delivery charges would remain among the lower half of southeastern local distribution companies and the lowest among its peer group of companies with similar-sized customer bases and financials.

About Atlanta Gas Light
Atlanta Gas Light is one of seven natural gas distribution companies of Southern Company Gas, a wholly owned subsidiary of Southern Company (NYSE: SO). Atlanta Gas Light provides natural gas delivery service to more than 1.6 million customers in Georgia. In operation since 1856, the company is one of the oldest corporations in the state. For more information, visit atlantagaslight.com.

About Southern Company Gas
Southern Company Gas is a wholly owned subsidiary of Atlanta-based Southern Company (NYSE:SO), America’s premier energy company.  Southern Company Gas serves approximately 4.6 million natural gas utility customers through its regulated distribution companies in seven states and more than 1 million retail customers through its companies that market natural gas and related home services. Other non-utility businesses include investments in interstate pipelines, asset management for natural gas wholesale customers and ownership and operation of natural gas storage facilities. For more information, visit Southern Company Gas at southerncompanygas.com.

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Media Contact:
Mekka Parish
o: 404.584.4165  |  c: 404.387.8067 |  msparish@southernco.com