Story highlights:
- The Southern Co.'s acquisition of AGL Resources for $8 billion will likely pass through the state's regulatory process "smoothly," Gov. Nathan Deal says.
- A majority of the members of the state's Public Service Commission, which would have to OK the deal, spoke favorably about it Monday.
- Energy lobbyists are among the biggest players at the state Capitol. Lobbyists directly employed by energy companies have spent more than $45,000 on lawmakers and other public officials so far this year.
- Some legislators are urging regulators to take extra caution as they vet the deal.
The blockbuster deal struck by Southern Co. to buy AGL Resources for $8 billion would require approval from Georgia regulators before it becomes the nation’s second-largest utility company. And getting that sign-off is considered likely, given the close ties between the utility industry and many top Georgia politicians.
Many of the state’s policymakers were given advance notice of the merger over the weekend, and Gov. Nathan Deal said Monday that he expected the regulatory approval process in Georgia to go “smoothly.” Four of the five Public Service Commission members said in interviews that their initial reactions to the deal were also overwhelmingly positive.
“I couldn’t sleep last night because I was thinking about all this,” said Commissioner Stan Wise, who said he was notified about the deal on Sunday night. “But I couldn’t come up with any negatives.”
Commissioner Doug Everett had a similar take. He called it a "win-win."
“I have thought about this ever since I heard about it over the weekend,” Everett said. “And I have yet to come up with a negative — I’m looking for them — but everything I can think about it is on the positive side.”
Power players
Energy lobbyists are among the biggest players at the state Capitol, and top firms such as Georgia Power and Atlanta Gas Light routinely employ dozens of lobbyists and subcontract droves more even when they don’t have major legislation pending.
Their influence is hard to measure, but lobbyist disclosures analyzed by The Atlanta Journal-Constitution help paint a picture.
Lobbyists directly employed by energy companies have spent more than $45,000 on lawmakers and other public officials so far this year. Contract lobbyists, including well-connected operatives such as Pete Robinson and Trip Martin, have spent thousands more.
Some of that spending is focused on the staff and board of the Public Service Commission, whose five members are all Republicans. Atlanta Gas Light recently treated Everett and Wise to dinners worth $67 and $71, respectively, during a meeting of the National Association of Regulatory Utility Commissioners.
And Georgia Power, Southern Co.’s main subsidiary in Georgia, spent more than $270 on meals for Everett, Wise and Lauren “Bubba” McDonald in July. They also wined and dined key lawmakers and Public Service Commission staff. All told, energy lobbyists spent more than $11,000 in July — one-third of all lobbyist spending for the month.
Georgia’s public utility commission isn’t the only agency that will scrutinize the deal. The merger must also be approved in at least four states, as well as by federal regulators. But a failure to pass muster in its home state would be a tremendous blow to the merger’s future.
Big questions
Commission Chairman Chuck Eaton said the deal makes business sense, given the growing demand for natural gas amid new regulations on coal-fired power plants. And Tim Echols, another commissioner, said his first reaction is that the merger would help Georgia consumers.
“The commission will review the merger, and I will be looking to see if it could potentially help provide additional natural gas infrastructure, economies of scale, more expertise to Georgia Power, and ultimately more customer choice,” he said.
It also has the full-throated support of Deal, who endorsed the merger hours after it was announced. Noting that oil prices had dropped below $40 a barrel, he said the deal would bring more stability to Georgia customers while ensuring a new energy behemoth stays in Atlanta.
“We certainly believe it’s good for the state of Georgia and good for consumers,” the governor said Monday shortly after the deal was announced. “I think there will be an economy of scale achieved by this as you broaden the scope of energy alternatives available by any one company.”
Only one of the commission’s five members, McDonald, could not be reached for comment. An aide said McDonald was traveling to a conference this week.
Some are urging regulators to take extra caution as they vet the deal. Senate Minority Leader Steve Henson, D-Tucker, said there’s a “high level of burden” on the PSC to ensure it is closely evaluating the implications of the deal. And state Rep. Stacey Evans urged the commissioners to act as “responsible watchdogs” to make sure rates don’t spike.
“The ratepayers can’t lose out,” said Evans, D-Smyrna. “That’s the most important thing.”
Wise echoed other commissioners by promising to hold open hearings about the merger’s fallout.
“If there’s things I’m not seeing that are problems, they’ll come out in the ensuing months,” he said. “But it could help coordinate delivery of gas and electric. And they will benefit economic development. And we will continue to grow the gas network so parts of the state that don’t have natural gas will benefit from it.”
