American Gas - March 2011 - (Page 6)

PeoPle Trends evenTs news Three Major Mergers Pending, More May Be on The Way Three Major mergers pending in the energy industry utility sector may be only the beginning, financial analysts report. The deals are: The combination of Duke Energy and Progress Energy, announced in January, which would create the largest utility in the country, with 7.1 million electric and 500,000 natural gas customers. The AGL Resources–Nicor merger, announced in December 2010, which would create the largest natural gas distribution company in the United States, with 4.5 million customers. The merger of Northeast Utilities, parent of Yankee Gas, and NSTAR, announced in October 2010, which would create a major New England utility with 3 million electric and 500,000 natural gas customers. Todd A. Shipman, credit analyst for Standard and Poor’s, in a report focusing on the electric utility sector, which includes electricgas combination companies, said the DukeProgress deal represents the beginning of the acceleration of the industry’s long-anticipated consolidation. “From our perspective, that kind of future would mean an improving credit-quality picture that could eventually return the average industry rating back to the ‘A’ category where it was before the deregulation trend began a generation ago,” Shipman said. Fitch Ratings, in its annual credit outlook for U.S. investor-owned midstream businesses, said market conditions in 2011, including pressure on profits from power generation, low interest rates and open financial markets, will favor mergers and consolidation as well as asset divestitures among energy utilities. Fitch also said: Low market prices for natural gas and electricity are expected to continue in 2011. Low power prices and new Environmental Protection Agency regulations will favor retirement of older coal-fired electric generating units. Natural gas distributors and pipelines will face increased scrutiny of pipeline safety. Although the increase in customers’ 6 March 2011 AmericAn GAs

Table of Contents for the Digital Edition of American Gas - March 2011

American Gas - March 2011
Contents
President’s Message Greetings
Industry News
Safety First Keeping Safety First
To Be the Best To Your Credit
Ask AGA The Value of Participation
A Passion for Excellence
Vendor News
Noteworthies
Marketplace
Places to Be
Jobline
Advertisers’ Index
Facts on Gas

American Gas - March 2011