| 
News
Releases
FMPA
Helps Create Partnership to Buy Natural Gas Reserves
ORLANDO,
Fla., Nov. 16, 2004 – Florida Municipal Power Agency
(FMPA) signed an agreement yesterday with six other public
gas and electric utilities in five different states to form
a first-of-its-kind gas supply agency called Public Gas Partners,
Inc.
Public
Gas Partners (PGP) was created to secure economical, long-term
wholesale natural gas supplies for its seven member agencies
to stabilize and reduce the cost of natural gas. The innovative
partnership among governmental entities was motivated by the
common need for a long-term, secure stream of economical natural
gas supplies.
At PGP’s
first official governing board meeting Nov. 15 in Atlanta,
the Board of Directors elected Roger Fontes of FMPA as Chairman
of the Board, James H. Smith of Southeast Alabama Gas District
as Vice Chairman, and Katrina Vaughan of Florida Gas Utility
as Secretary/Treasurer. The Board also appointed Susan Reeves,
Chief Financial Officer of the Municipal Gas Authority of
Georgia, as President of PGP.
In recent
years, natural gas prices have risen dramatically—doubling
and even tripling in short periods of time. The price of natural
gas in the United States, which historically moved in a fairly
narrow range around a price of approximately $2 per MMBtu,
has demonstrated significant volatility in recent years and
currently is trading near $8 per MMBtu. The long-term prospects
suggest continued price volatility.
By pooling
the natural gas needs of its members, PGP will acquire producing
reserves or other long-term gas supplies to create discounts
and economies of scale for everyone in the group, and in turn,
their customers. PGP members anticipate acquiring a portfolio
of long-term supplies primarily made up of producing natural
gas reserves. The group favors a portfolio approach to diversify
assets and mitigate risk associated with long-term supplies.
PGP expects
to target an initial supply portfolio capable of producing
approximately 60,000 MMBtu per day or 219 Bcf over 10 years.
FMPA projects that approximately 20% of its daily gas needs
eventually will be supplied by the new partnership, yielding
significant cost savings below current market prices.
“We
are very excited about what this new gas supply venture can
do for each of the members and, importantly, what it can do
for all of our consumers,” said Roger Fontes, newly-elected
Chairman of PGP. “At this time, we have put a small
portion of our natural gas requirements into PGP, and as PGP
builds the kind of high quality portfolio of gas reserves
we expect over the next several years, FMPA and the other
members will likely increase the amount of their long-term
requirements met by PGP.”
“It
is so great to see both gas and electric public agencies pool
our resources together in joint-action to create the synergy
and economies of scale that will yield win-win results for
all involved,” said PGP Vice Chairman James H. Smith.
Fontes added, “Expanding joint action from state-level
operations to regional, super-joint-action operations promises
significant cost savings and expanded opportunities for consumer-owned
utilities.”
The day-to-day
operations of PGP will be performed under contract by the
Municipal Gas Authority of Georgia. All operation and management
costs for PGP will be funded through fees to its membership.
Each member has appointed a representative to the PGP Board
of Directors.
The members
of Public Gas Partners include Municipal Gas Authority of
Georgia (MGAG), Florida Municipal Power Agency (FMPA), Florida
Gas Utility (FGU), Lower Alabama Gas District (LA Gas), Patriots
Energy Group (PEG), Southeast Alabama Gas District (SEAGD),
and Tennessee Energy Acquisition Corporation (TEAC).
-------------
Florida
Municipal Power Agency (FMPA) is a wholesale power company
owned by 29 municipal electric utilities. FMPA provides economies
of scale in power generation and related services to support
community-owned electric utilities. The members of FMPA serve
approximately 1.8 million Floridians. FMPA’s members
include Alachua, Bartow, Bushnell, Chattahoochee, Clewiston,
Fort Meade, Fort Pierce, Gainesville, Green Cove Springs,
Havana, Homestead, Jacksonville Beach, Key West, Kissimmee,
Lake Worth, Lakeland, Leesburg, Moore Haven, Mount Dora, New
Smyrna Beach, Newberry, Ocala, Orlando, Quincy, St. Cloud,
Starke, Vero Beach, Wauchula and Williston. Additional information
is available on the Internet at www.fmpa.com.
FMPA
Contact:
Mark McCain
Public Relations/Public Affairs Manager
407 355-7767
|
