Atlanta Gas Light Company – an affiliate of AGL Resources (GAS) – entered into a service contract with the City of Atlanta and three other commercial operators.
Per the agreement, Atlanta Gas will set up five new compressed natural gas (:CNG) fueling stations throughout Georgia. The company will incur an investment of about $6.5 million for the installation of compression and storage equipment at the stations.
In the coming years, Atlanta Gas has the option to strike service deals with other station owners for the investment of an additional $5 million fund that was authorized by the Public Service Commission.
In November, last year, the Public Service Commission gave a nod to Atlanta Gas’ proposal for an investment of $11.57 million to bring in equipments at the CNG fueling stations. The Commission has also approved a new rate for the services provided by Atlanta Gas.
This happens to be the first state-sponsored investment program in the Southeast, where a company is able to upgrade infrastructural facilities in the market without burdening customers.
The five to-be opened fueling units will span across Downtown Atlanta, Forest Park, Savannah and Valdosta. Of these, three stations will render public access.
Atlanta, Georgia-based AGL Resources is an energy services holding company, whose principal business is gas distribution. Through its seven utilities (Atlanta Gas Light, Chattanooga Gas, Elizabethtown Gas, Elkton Gas, Florida City Gas, Nicor Gas and Virginia Natural Gas) the company builds, manages and maintains intrastate natural gas pipelines, distribution facilities along with peaking and storage facilities.
AGL Resources – one of the major distributors of natural gas in the nation along with the likes of Atmos Energy Corp. (ATO) – currently retains a Zacks #3 Rank (short-term Hold rating). We are also maintaining our long-term Neutral recommendation on the stock.
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