Washington Gas Energy Services and Shell Energy Enter Into Strategic Supply Arrangement
HERNDON, Va.--(BUSINESS WIRE)--
Washington Gas Energy Services, Inc. (WGES) announced today that it has
entered a five-year secured supply arrangement with Shell Energy North
America (US), L.P. (Shell Energy). Under this arrangement, WGES will
have the ability to purchase the majority of its power, natural gas and
related products from Shell Energy in a structure that reduces WGES'
cash flow risk from collateral posting requirements. As a result of this
credit support agreement, Shell Energy will have a lien on WGES' assets,
principally its retail accounts receivables and contracts.
"Looking to the future, we are pleased that Shell Energy will be working
with us as our primary supplier of gas and electricity for WGES. With
this arrangement, we will be able to build upon our successful track
record of reducing earnings volatility at WGES, by reducing cash flow
volatility that can result from collateral obligations," said Terry D.
McCallister, Chairman and Chief Executive Officer of WGL Holdings, Inc.
"WGES' ability to secure customer contracts fits well with Shell
Energy's expertise in commodity supply markets, and this arrangement
will allow WGL Holdings, Inc. to grow WGES while reducing capital
reserved to cover contingent collateral needs."
"We are excited about this innovative commercial structure, which allows
us to become the primary supply source for power, natural gas and
related products for WGES," commented Frans Everts, President of Shell
Energy North America. "Through our agreement, Shell Energy expands its
footprint in the mid-Atlantic region of the U.S."
About Washington Gas Energy Services, Inc.
Washington Gas Energy Services, Inc. is one of the largest competitive
providers of electricity and natural gas in the mid‐Atlantic region and
supplies more than 350,000 customers in Maryland, Delaware, the District
of Columbia, Pennsylvania and Virginia. In 2011, the U.S. Department of
Energy (DOE) named WGES the Green Power Supplier of the Year in the
non‐utility category. Headquartered in Herndon, Va., Washington Gas
Energy Services is an affiliate of Washington Gas Light Company and is a
subsidiary of WGL Holdings, Inc. (NYSE:WGL). www.wges.com.
About WGL Holdings, Inc.
Headquartered in Washington, D.C., WGL Holdings, Inc. has four operating
segments: (i) the regulated utility segment which primarily
consists of Washington Gas, a natural gas utility that serves over one
million customers throughout metropolitan Washington, D.C., and the
surrounding region; (ii) the retail-energy marketing segment
which consists of Washington Gas Energy Services, Inc., a third-party
marketer that competitively sells natural gas and electricity; (iii)
the commercial energy systems segment which consists of Washington Gas
Energy Systems, Inc., a provider of design-build energy efficiency
solutions to government and commercial clients, commercial solar
projects, and the operations of WGSW, a holding company formed to invest
in alternative energy assets and (iv) the wholesale energy
solutions segment which consists of Capitol Energy Ventures Corp., an
asset optimization business that acquires, manages and optimizes natural
gas storage and transportation assets. Additional information about WGL
Holdings, Inc. is available on our website, www.wglholdings.com.
About Shell Energy North America (US), L.P.
Houston-based Shell Energy North America (US), L.P., a wholly owned
subsidiary of Royal Dutch Shell plc (Shell), serves its customers
through its regional offices located throughout North America. As an
integral part of the Shell Trading network of companies, Shell Energy
North America (US), L.P. is the primary marketer of Shell's equity
natural gas in North America. As a leader in gas and power marketing,
Shell Energy North America (US), L.P. and its subsidiaries, trade and
market natural gas, wholesale power, environmental products and risk
management products with counterparties and customers throughout the
region. More information is available online at www.shell.com/us/energy.
WGL Holdings, Inc.
Douglas Bonawitz, 202-624-6129
Source: WGL Holdings, Inc.
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