VIRGINIA BEACH, Va., Dec. 20, 2011 /PRNewswire/ -- The Virginia State Corporation Commission (VSCC) today accepted the terms of a settlement reached by Virginia Natural Gas and several parties resolving the company's rate case petition.
Today's approval allows the company to continue delivering safe and reliable service to its more than 275,000 customers, while meeting the critical infrastructure needs of a growing region. It also represents the first base rate increase of customer charges since 1996.
"We have avoided increasing the base rates for 15 years by working smartly and more efficiently," said Jodi Gidley, president of Virginia Natural Gas. "In such challenging economic times, I believe this settlement is a fair compromise to the issues raised in our rate case, and is in the best interests of our customers. The rate increase recognizes our operational cost increases and our significant infrastructure investments, including the Hampton Roads Crossing pipeline."
The approved agreement provides for an $11.3 million increase in base revenues and establishes an authorized return on equity of 10 percent for Virginia Natural Gas with an overall return on rate base set at 7.38 percent. Additionally, $3.1 million of costs previously recovered through base rates will now be recovered through the company's gas cost recovery rate. As previously disclosed, the outcome of the rate case is expected to be immaterial to AGL Resources' earnings per share, as the company was previously collecting AFUDC (allowance for funds used during construction) on the Hampton Roads Crossing project.
The new rate will increase the average residential customer's monthly bill by less than $3.50 per month depending on usage.
Customers' bills will be credited to refund the difference between the final approved rates and interim rate increase, which began with usage on and after Oct. 1, 2011.
The Hampton Roads Crossing is a 24-inch diameter pipeline running beneath Hampton Roads Harbor to link previously unconnected distribution systems between the Peninsula and South Hampton Roads. The project also included construction of two pipeline compression facilities in Caroline and Charles City counties.
The negotiating parties included representatives from the VSCC, Office of the Attorney General, Division of Consumer Counsel and Virginia Industrial Gas Users' Association.
About Virginia Natural Gas
Virginia Natural Gas, a wholly owned subsidiary of AGL Resources (NYSE: GAS), provides retail natural gas sales and distribution services to 275,000 customers in southeast Virginia. For more information, visit www.virginianaturalgas.com.
About AGL Resources
AGL Resources (NYSE: GAS) is an Atlanta-based energy services holding company with operations in natural gas distribution, retail operations, wholesale services, midstream operations and cargo shipping. As the nation's largest natural gas-only distributor based on customer count, AGL Resources serves approximately 4.5 million utility customers through its regulated distribution subsidiaries in seven states. The company also serves more than one million retail customers through its SouthStar Energy Services joint venture and Nicor National, which market natural gas and related home services. Other non-utility businesses include asset management for natural gas wholesale customers through Sequent Energy Management, ownership and operation of natural gas storage facilities, and ownership of Tropical Shipping, one of the largest containerized cargo carriers serving the Bahamas and Caribbean region. AGL Resources is a member of the S&P 500 Index. For more information, visit www.aglresources.com.
Forward-Looking Statements
Certain expectations and projections regarding our future performance referenced in this press release are forward-looking statements. Forward-looking statements involve matters that are not historical facts, such as statements regarding our future operations, prospects, strategies, financial condition, economic performance (including growth and earnings), industry conditions and demand for our products and services. Because these statements involve anticipated events or conditions, forward-looking statements often include words such as "anticipate," "assume," "believe," "can," "could," "estimate," "expect," "forecast," "future," "goal," "indicate," "intend," "may," "outlook," "plan," "potential," "predict," "project," "seek," "should," "target," "would," or similar expressions. Forward-looking statements contained in this press release include, without limitation, the expectation that the outcome of the rate case will be immaterial to our earnings per share. Our expectations are not guarantees and are based on currently available competitive, financial and economic data along with our operating plans. While we believe our expectations are reasonable in view of the currently available information, our expectations are subject to future events, risks and uncertainties, and there are several factors - many beyond our control - that could cause results to differ significantly from our expectations.
Such events, risks and uncertainties include, but are not limited to, changes in price, supply and demand for natural gas and related products; the impact of changes in state and federal legislation and regulation including changes related to climate change; actions taken by government agencies on rates and other matters; concentration of credit risk; utility and energy industry consolidation; the impact on cost and timeliness of construction projects by government and other approvals, development project delays, adequacy of supply of diversified vendors, unexpected change in project costs, including the cost of funds to finance these projects; the impact of acquisitions and divestitures; including the proposed Nicor merger, limits on natural gas pipeline capacity, direct or indirect effects on our business, financial condition or liquidity resulting from a change in our credit ratings or the credit ratings of our counterparties or competitors; interest rate fluctuations; financial market conditions, including disruptions in the capital markets and lending environment and the current economic uncertainty; general economic conditions; uncertainties about environmental issues and the related impact of such issues; the impact of changes in weather, including climate change, on the temperature-sensitive portions of our business; the impact of natural disasters such as hurricanes on the supply and price of natural gas; acts of war or terrorism; and other factors which are provided in detail in our filings with the Securities and Exchange Commission, which we incorporate by reference in this press release. Forward-looking statements are only as of the date they are made, and we do not undertake to update these statements to reflect subsequent changes.
SOURCE Virginia Natural Gas
