AT Washington Water Power, Bobby Schmidt was appointed director of the company, and Paul A. Redmond announced his retirement as chair and CEO. Redmond started with the company in 1965. Previously...
10 Innovators to Watch in 1999
Rosput that she's "moving backwards."
"'Why would you come back to the regulated business?'" she says they ask her. "And the answer is, these are all variations on the same theme. They all have to do with managing earnings performance."
Atlanta Gas Light's challenge is significant. It is asking Rosput to boost earnings in the face of a deregulating market. The company is the major gas distribution subsidiary of the $1.29-billion AGL Resources Inc. It serves about 1.5 million customers in Georgia and southern Tennessee.
In November, Georgia's gas market opened to competition, in accord with the state's Natural Gas Competition and Deregulation Act. Atlanta Gas Light has decided to stay in the merchant business, forming a marketing subsidiary to sell gas at the retail level. It will compete against 19 marketers certified by the Georgia Public Service Commission. There will be no supplier of last resort, with marketers the de facto suppliers. The local distribution company will continue to own the meter. Customers can choose to receive both sales and delivery services from their utility.
"This isn't an ordinary utility type of assignment here," Rosput says. "This has got components to it that are commodity market oriented ¼ fortunately, Duke and PanEnergy were a great teacher."
Besides building a gas purchase strategy that seeks to minimize its risk on the commodity side, Rosput faces significant challenges on the regulated side of the business.
Prior to her coming on board Sept. 21, the parent company's third-quarter financial results for fiscal 1998 were lackluster. AGL Resources posted a net loss of $1.2 million, blamed on the rate design mandated by the Deregulation Act. Losses also were attributed to start-up marketing expenses for its new retail energy marketing subsidiary and "management restructuring" costs.
The distribution company is adding as many as 50,000 new customers a year, but isn't seeing profit growth. Rosput says Atlanta Gas Light is having a hard time convincing customers of the long-term savings with gas, especially when they can win immediate, electric appliance rebates from competitive co-ops. The utility also has revisited its overly generous line extension policy to reduce how much free footage it allows to housing developers, a source of misused capital.
Atlanta Gas Light's main milestone in 1999, Rosput says, should be consistency and improvement in earnings performance. And it will do so by staying in its own backyard.
Luckily, in some areas, the utility is positioned well. The PSC, following the guidelines of the Deregulation Act, called for a reduction in base rates totalling about $13 million annually and an 11 percent allowed return on equity. Atlanta Gas Light's position in the competitive market also is improved by its 1994 decision to downsize by more than 700 employees.
Rosput says it's anyone's bet as to how the competitive markets will work out. "It's really something all of us will have to watch."
All will be watching but Rosput, that is. She'll be "storming the beaches."
Robert W. Shaw Jr., president, Aretê Corp.
If you asked Robert W. Shaw Jr. to describe his job, his explanation would