Corning Natural Gas Corporation CEO Interview: Michael I. German

• On 12:52 pm EDT, Tuesday September 22, 2009

67 WALL STREET, New York - September 22, 2009 - The Wall Street Transcript has just published its Alternative Energy/Clean Energy/Power Generation/Utilities Report offering a timely review of the sector to serious investors and industry executives. This 83 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Long Term Perspective on Alternative Energy Industry -- Leading Indicators for Alternative Energy Components Companies -- Mergers and Acquisitions in the Alternative Energy Industry -- Break Even Business Fundamentals for Carbon Free Energy Providers -- Development of Carbon Free Energy Production Infrastructure -- NAT GAS Act -- New Players in the Alternative Energy Industry -- Solar Power Cell Manufacturers Market Strategy -- Demand Response for Raw Materials for Solar Cell Production -- Alternative Energy Investment Opportunities -- Multiple Stock Winners in Carbon Free Production Industry -- Government Funding of Alternative Energy Power Providers -- Chinese Solar Energy Companies -- Alternative Energy Hedge Fund Investors -- Commodity Cycles -- Determinants of Market Valuations in the Alternative Energy Production Industry -- Carbon Emissions Statistics -- Energy Efficiency Statistics -- Innovations in Solar and Wind Power Generation -- Business Economics for Methane Based Power Generation -- Electric Vehicles Projections and Statistics-- Cap and Trade Projections and Statistics -- Development of Battery Technology -- Regulatory Environment Developments for Solar, Wind, and Alternative Energy -- Hybrid Vehicles Development and Sales Projections

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In the following brief excerpt from the 83 page report, Michael I. German, CEO of Corning Natural Gas Corporation, discusses the outlook for the sector and for investors.

TWST: Please give us a brief history of Corning Natural Gas as well as a short overview of your operations?

Mr. German: Corning Natural Gas is a local gas distribution company in upstate New York. It's the smallest publicly traded gas utility in the country, and the company has been in business for 105 years. It's a little different than the typical utility, in that we have two wholesale utility customers, a number of large industrial customers and extensive connections to local production. We have been growing quite robustly over the last two or three years.

TWST: What are some of the key issues that are currently impacting natural gas companies' strategies and goals, including your own?

Mr. German: Owing to the current recession, the regulatory environment is somewhat more difficult than it has been in the past. So if you are a regulated utility, that's an important factor. In addition, we've seen reduced use per customer and more conservation. But in our area, we're beginning to see a lot of gas drilling in the Marcellus Shale, and that's opened up new opportunities for us. In addition, natural gas is relatively cheap compared to oil, electricity or propane, and hence there are new marketing opportunities opening up relative to other fuels. Construction costs are also down considerably. It is therefore a high priority of the company to accelerate implementation of our strategic initiatives to take advantage of current market conditions, i.e., high demand and low costs.

TWST: Are you the only supplier in your markets or do you have competitors?

Mr. German: We are a utility, so in the distribution of gas, we are the only supplier in our service territory. We are an open-access system, so there are a lot of marketers who move gas on our system, and roughly 80% of the volumes on our system are moved for third-party suppliers. We have a smoothly functioning open access system, more so than virtually any other utility in the country. As regards alternative fuels, natural gas is by far the most price-competitive in our area.

TWST: Give us a sense of the amount of natural gas you deal with as far as throughput is concerned? How you slice your residential, commercial and industrial customers?

Mr. German: We move about 9 billion cubic feet a year, about a third of which is for our wholesale customers. The remaining two-thirds is split equally between large industrial customers, and the smaller residential and commercial sector.E

TWST: Is there anything distinctive about serving the rural customer versus serving a city customer?

Mr. German: I would say the most distinctive feature is our lower cost of construction and operations. For us, we are in a relatively prosperous area. We have a Fortune 100 company headquartered in Corning, Corning Incorporated. There are several other large industrial firms here, and generally it's an area which hasn't seen an economic downturn. We never had a housing boom, so we are not experiencing a housing bust. Another differentiating factor between us and more urban utilities is our local-customer service approach. Approximately one-quarter of our customers pay their gas bills in person at our offices. Every month nearly half of our customers visit our offices. We strive to be a "mom and pop" utility.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 83 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

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