Report: AGL likely buyer of big Illinois gas utility

The acquisition would almost double AGL's current six-state customer base.  It would also knock Atlanta Gas Light off its perch as the largest utility in AGL's system.

Neither Nicor nor AGL would comment on the report. “I can’t comment on this right now,” said AGL spokeswoman Tami Gerke. A Nicor spokesman did not return calls.

AGL now has 2.3 million customers in Georgia, New Jersey, Virginia, Florida, Tennessee and Maryland, after a series of acquisitions several years ago. More than half, or about 1.5 million, of its customers are in Georgia.

Speculation about Nicor began late last week,  after analysts learned the company had been shopping itself for a couple of months.

A Friday report by Morningstar Research suggested that interest in Nicor was "tepid" because of its relatively high stock price and Illinois' tough regulatory climate. The report also said Nicor has had legal problems, including one that could require large refunds to customers and a recently-opened attorney general's probe of an unregulated affiliate.

Then Mergermarket identified AGL as the likely buyer. The report said an announcement could come early this week.

The deal would come on the heels of an October Georgia Public Service Commission vote that made acquisitions more attractive to Atlanta Gas Light's parent company.

The PSC vote allowed the parent company to keep half of the savings achieved from acquisitions for 10 years, instead of passing all of the savings on to Atlanta Gas Light ratepayers. The savings would come from economies of scale.

"The commission thought it was important that the we adopt something that encourages wise investments by the company," said Commissioner Stan Wise, adding that  the company's last two acquisitions saved Atlanta Gas Light customers about $180 million over several years.

"Of course we had no idea that it would have been this timely,"  he said. " Or as timely as the reports that are out there now."