AGL plans $400 million pipe upgrade – Atlanta Business Chronicle:

The subsidiary of Atlanta-based is expected to file a requesf with the Georgia Public Service Commissiobn June 12 to boost the capacity of pipelinesx throughout metro Atlanta and threde liquefied naturalgas (LNG) storage facilitiez in Cherokee and Rockdale counties and Macon. The 10-year project would be financed by increasing a surchargd the utility already is collecting for a pipelinereplacementg program. The proposal is designed to keep pace with a rapidlyggrowing state. Population projections AGL obtainexfrom Moodyseconomy.com show that Georgia’s 20 fastest-growing countiezs are expected to gain 477,000 residenta between 2008 and 2018.
Anothet factor beyond the numbers themselvex is where that growthis occurring. Accordin to the Web site’s projections, the state’sd five fastest-growing counties by percentage from 2008 to 2018 willbe Paulding, Newton, Henry and Barrow, all in metr o Atlanta’s outer reaches. “The growtnh has shifted away from our interstatwe supply points andexistingg high-pressure pipeline system,” said Jay Sutton, AGL’s vice presidenft of engineering and operations. “Industrhy standards indicate we need to reinforcs the system and prepare for forecasted The newproposal isn’t the only projecg on AGL’s plate.
A $43 million plan to bring additionap gas supplies to Atlanta through an LNG terminal on Elba Island near Savannah is due to go on line in saidDavid Weaver, director of state regulatorh affairs for AGL. The project will providee enough capacity toserve 52,589 customers. The PSC voted in 2005 to extendthe 10-yea pipeline replacement program AGL began in 1998 untill 2013. That work is being funded througu a monthly surchargeof $1.95 per residential It’s that surcharge AGL is proposing to raisse to pay for the new project. If the PSC approvea the utility’s request, residential customers wouls pay an additional 95 cents per montgh for a totalof $2.90.
The monthly surcharger for small commercial customersof $5.84 would increase by $2.85, a total of Consumer advocates tend to look askancee at surcharges because they allow utilities to recovetr project costs outside of rate cases, the usual venues for the PSC to consider rate-hike requests. “In traditional rate making, the commission looksd at all revenues and expenses for a snapshoftin time, and everything — earningd and expenses — are considered,” said forme Commissioner Angela Speir Phelps, now a senior director for Georgias Watch, a statewide consumer advocacy group.
“When multipler recovery methods such as ridersare used, it is very easy to inadvertentlu create a system that allows double recovery, whic can result in over-earnings for the compangy and overcharges for customers.” But AGL President Suzanne Sitherwoord said the surcharge approach would offer more cost certainty to both the utilityh and customers than incorporating the project into a broaderf rate case. “It is important we use a recovery mechanism in which investors and financial institutions are she said.
“We should get access to readyu capital and at favorable The ultimate beneficiary will be our who will pay less and benefi from the improved operating capabilities ofour system.” Alongh with the financing plan, another issue likely to play a role in the PSC’ s deliberations over the project is the need for additional Weaver said AGL has been adding only 7,000 to 10,00o0 new customers a year during the recession, far below the growtj it was experiencing earlier in this decade.
But he said that trendr is not expectedto “The economy is in a downturm that’s not permanent,” he “We’re trying to get ahead of the Sitherwood said it’s a smart business decision to invest in infrastructure improvements during a recession becaus e both construction and interest costs are lower. She said the projecf is expected to create 150 to 200construction jobs. Weavere said AGL is planning to seek approval from the PSC in He said the firsft installment calls foran investment of $184 million during the project’sz first three years.

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