ATLANTA, June 12, 2002 — Southern Co. has signed a letter of intent to acquire the Georgia customers currently being served by The New Power Company.
Southern Co. would pay approximately $28 million, or $131.00 per flowing customer, for the customer contract and its customer care and billing systems. Southern Co. would also pay an additional amount for the rights to use New Power’s risk management system. In addition, Southern Co. would pay approximately $32 million for New Power’s Georgia natural gas inventory and accounts receivable.
Southern Co. has formed a new entity, Southern Co. Gas LLC, from which the Georgia gas operations will be run. The new entity will seek certification from the Georgia Public Service Commission to become a natural gas marketer in Georgia. Terms of the New Power deal are subject to bankruptcy court and regulatory approvals.
New Power provides natural gas in Georgia to approximately 210,000 residential and small commercial customers, which is a 15 percent share of the market. On Tuesday, June 11, New Power filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U. S. Bankruptcy Court for the Northern District of Georgia.
“The acquisition of New Power’s Georgia customers would fit our strategic plan to offer energy-related new products and services, apart from our traditional sales of electricity,” said Allen Franklin, chairman, president and CEO of Southern Co.. “Our emphasis will always be on the customer. Our goal would be to provide retail natural gas customers with the same high level of customer service and competitive prices that they have come to expect from all of our companies.”
“We would expect that the New Power acquisition would enhance Southern Co. earnings in the first few months after the acquisition closes,” said Gale Klappa, Southern Co.’s chief financial officer.
With 4 million customers and nearly 35,000 megawatts of generating capacity, Atlanta-based Southern Co. is the premier super-regional energy company in the Southeast and a leading U.S. producer of electricity. Southern Co. owns five electric utilities, a fast-growing competitive generation company and an energy services business, as well as fiber optics and wireless communications.