Gas marketers raise concern about Southern pipeline deal

[private]The Southern Co.’s planned acquisition of a natural gas pipeline system is raising concerns among Georgia’s gas marketers, who spelled out their worries to the Public Service Commission at an informal Thursday hearing.

Southern announced last month it will pay $1.5 billion for a 50 percent stake in a natural gas pipeline system, Southern Natural Gas, that is operated by Kinder Morgan Inc., a Texas-based energy firm.

This announcement came on the heels of Southern’s completion of a $12 billion merger with AGL Resources, a major natural gas company.

A group of natural gas marketers told the PSC this vertical integration of natural gas distribution facilities could result in anti-competitive behavior that harms the marketers.

“The transaction could create an incentive to suppress new entry into natural gas markets,” said Meredith Hodges, who was speaking for Gas South, Scana, and Walton Natural Gas.  “The transaction raises the perception and potential for anti-competitive behavior.”

“We would rely on you, the commission, to monitor appropriate transactions and data,” Hodges said.

Kevin Greene, an attorney representing Southern Co., said the combining of gas and electric utilities into one holding company is “not uncommon” and did not present a threat to the gas marketers.

“The structure of this transaction provides no opportunity and no incentive to negatively affect the wholesale or retail gas markets here in Georgia or in the southeast,” Greene contended. “There is already in place a robust system of state and federal oversight and regulation that precludes potential harm and the concerns that were just outlined to you.”

“Natural gas is becoming an increasingly important part of the energy future in Georgia and throughout the southeast,” Greene added. “Southern recognizes that and it needs to be involved in that on behalf of our customers.”

While the PSC doesn’t have the authority to stop the Southern Co. acquisition, Commissioner Stan Wise said he wanted to call Thursday’s hearing as a precautionary measure.

“Clearly, there’s a potential for impact and I was concerned if there was anything our staff and the commission needed to think about, to monitor,” Wise said.

© 2016 by The Georgia Report

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Tags: gas marketers , gas pipeline , PSC , Southern Co.