THE SOURCE - Spring 2016 - (Page 10)

feature Natural Gas industry to Benefit from New Business Partnership L By Hank P. Linginfelter ast August, Southern Company and AGL Resources announced that their respective boards of directors had approved a merger agreement to create the second-largest electric and gas utility company by customer count in the United States, with 11 regulated electric and natural gas companies and 9 million customers in nine states. Under this agreement, AGL Resources would become the third-largest operating subsidiary of Southern Company. The AGL Resources management team and board of directors wholeheartedly support the transaction, and AGL Resources' shareholders nodded yes when they voted to accept the agreement in November. The response and interest from industry leaders about the announcement has been highly favorable. But why would the oldest corporation in Georgia (AGL Resources utility Atlanta Gas Light was incorporated in 1856) and largest natural gas-only company in the U.S. be willing to be acquired by one of the nation's largest producers of electricity? The conversation actually began around a dinner table where the two corporations' top leaders, Southern Company chief executive Tom Fanning and AGL Resources chief executive John Somerhalder, discussed how important natural gas is not just to Southern Company's business, but also to our nation's energy future. Tom shared that before he was at the helm of Southern Company, the company was producing about 70 percent of its energy from coal and only about 16 percent from natural gas. Today, Southern Company is producing about 36 percent from coal and 46 percent from natural gas, so the company is already one of America's largest consumers of natural gas. While Tom's view of Southern Company's portfolio is that it needs to maintain a mix of all kinds of energy resources, he also sees the portfolio shifting more toward natural gas as it continues to replace its coal-fired generation. And as renewable resources continue to play a larger role in the country's energy mix, natural gas becomes a more important fuel to back-up the intermittent nature of those alternatives. Aside from its own consumption, Southern Company is bullish about the natural gas industry for many reasons- technology advances that have allowed for abundant and inexpensive shale 10 THE SOURCE | THE vOiCE and CHOiCE Of pUbliC gaS gas, affordable prices that will likely increase the use of gas across most sectors, and the importance of natural gas for reducing carbon emissions and improving the environment, among other reasons. And of course, AGL Resources and Southern Company recognize the potential for investing in natural gas pipelines and gas utility assets as more infrastructure is expected to be needed to fulfill the increase in demand over the next decade and beyond. AGL Resources has plenty of experience in pipeline investments through partnerships with other companies. Current projects are the Atlantic Coast Pipeline, PennEast Pipeline, and Dalton Lateral. Atlantic Coast Pipeline, a joint venture between Dominion, Duke, Piedmont and AGL Resources, is a 500-mile pipeline that will deliver gas from the Marcellus and Utica plays to customers in Virginia and North Carolina. PennEast Pipeline is a 100-mile pipeline from Pennsylvania to New Jersey and a joint venture between NJR Pipeline Co., a subsidiary of New Jersey Resources Corp.; South Jersey Industries Inc.; UGI Energy Services, a subsidiary of UGI Corp.; PSEG Power LLC; AGL Resources and Spectra Energy Partners. The Dalton Lateral project is a 100-mile pipeline coming off the Transcontinental, or Transco, gas pipeline and is slated to serve Atlanta Gas Light's customers and the 1,250-megawatt natural gas plant for

Table of Contents for the Digital Edition of THE SOURCE - Spring 2016

First Person
APGA Events
A Friendly Business Partnership of Two of the Nation’s Largest Utilities Can Benefit the Natural Gas Industry
Natural Gas Direct-Use in Net Zero Energy Buildings
Henry Hub and Changing Liquidity in the North American Gas Market
Cold Season Planning Preparedness: From Supply to Delivery
Natural Gas Power Plant Opportunities
Legislative Outlook
The Pipeline
Marketing Matters
Advertisers’ Index/
At Last

THE SOURCE - Spring 2016