Replacement program helps ensure the safety and reliability of natural gas pipeline system

ATLANTA - August 6, 2013 - Atlanta Gas Light Company announced today that it has received the required regulatory approval to replace 756 miles of vintage plastic pipe within its natural gas distribution system. The Georgia Public Service Commission (PSC) voted unanimously to approve an agreement between Atlanta Gas Light and the PSC staff that authorizes a phased-in approach to funding the four-year, $275 million program.

"Safety is at the forefront of everything we do at Atlanta Gas Light," said company President Bryan Batson. "Our vintage plastic replacement program will allow us to replace aging pipeline with newer materials that will make our natural gas system even safer and more reliable," said Batson.

Atlanta Gas Light has about 3,320 miles of vintage plastic pipe within its approximate 33,000 mile natural gas distribution system.  Referred to in the industry as vintage plastic, this classification of pipe was manufactured with certain resins susceptible to premature degradation depending on service conditions. At the time of installation, the industry projected a useful life of between 60 and 70 years.  Like most gas utilities across the country, Atlanta Gas Light installed vintage plastic pipe between 1965 and 1984.  These plastic pipes are used for medium and low-pressure applications while protected steel pipe is reserved for high pressure use.  Although vintage plastic pipe in the Atlanta Gas Light system has not been linked to any reportable incidents involving persons or property, some performance issues have been identified when the pipe is disturbed. 

The PSC authorized replacement of 756 miles of the oldest pipe, with the majority of the pipe - 523 miles - installed in 1974 and earlier. The $275 million construction program will be funded through Atlanta Gas Light pass-through charges that appear on the bills of natural gas marketers. Following the effective date of the PSC's order, gas marketers will adjust monthly pass-through charges by $0.48 through December 2014.  Additional surcharges of $0.48 and $0.49 will be applied in January 2015 and January 2016 respectively, and will continue through 2025. 

"We are mindful of any impact that rate adjustments have on our customers," said Batson. "That is why we are proud that since 1998 our rate adjustments have remained below the rate of inflation, and we do not expect that to change with these new investments," he said.

Atlanta Gas Light has monitored the performance of its vintage plastic pipe since the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) issued federal advisories in the late 1990s and early 2000s.  Under the terms of the stipulation, Atlanta Gas Light will continue to perform enhanced leak surveys on the approximate 2,500 miles of vintage plastic pipe remaining in the system.

Later this year, the company will complete a separate pipeline replacement program started in 1998 involving 2,712 miles of aging bare steel and cast iron pipe. Georgia was one of the first states to adopt such a systematic replacement program, and now over 27 states have some form of pipeline replacement program similar to the Georgia model.

This fall, the PSC also will consider phase 2 of the company's STRIDE program (Strategic Infrastructure Development and Enhancement).  Started in 2009 as part of a 10-year system reinforcement program, Atlanta Gas Light has been upgrading existing pipelines and installing new ones to maintain pressure in high growth areas.  Phase 2 would include $214 million in infrastructure improvements that would boost pressure in Coweta, Fayette, and Hall counties, and northern Gwinnett and Forsyth counties. The company also is proposing to spend up to $46 million to extend its natural gas system into communities throughout the state that are currently underserved or not served.

The vintage plastic pipeline replacement program and STRIDE are all part of a $535 million infrastructure program the utility refers to as Energy for a Growing Georgia. 

Details on the Energy for a Growing Georgia program can be found at www.aglc.com/Legacy. 

About Atlanta Gas Light

Atlanta Gas Light, a wholly owned subsidiary of AGL Resources (NYSE: GAS), provides natural gas delivery service to more than 1.5 million customers in Georgia. In operation since 1856, the company is one of the oldest corporations in the state. For more information, visit http://www.atlantagaslight.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. AGL Resources serves approximately 4.5 million utility customers through its regulated distribution subsidiaries in seven states. The company also serves approximately 630,000 retail energy customers and approximately 1.2 million customer service contracts through its SouthStar Energy Services joint venture and Pivotal Home Solutions, 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.http://www.aglresources.com/. 

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Media Contact

Kristie Swink Benson Office: 404-584-3167

kbenson@aglresources.com


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