Atmos Energy 1998 Annual Report Download - page 10

The Company is committed to improving the profitability of its propane operations through
internal growth and through acquisitions. Currently, Atmos Propane, Inc. is the 33rd largest
propane company in the United States. Our non-utility operations also include a 45 percent
interest in Woodward Marketing, LLC, a natural gas services firm. Woodward’s strategy
for continued growth is to increase gas usage by existing customers and to add new
customers. We also may seek an electric partner to become a member of Woodward
Marketing, LLC, and create the opportunity to market electricity to Woodward customers.
How does Atmos plan to offer retail services to its customers?
The cornerstone of our retail services strategy is to position the Company to sell the gas
commodity to customers behind the meter through partnerships with commodity
providers. We are limited in our ability to implement this part of our retail strategy until
the states in which we operate permit us to offer these services. Until unbundling
occurs, we are focusing on three key areas. First, we are preparing to sell other products
and services to our customers by establishing partnerships with third parties that have
mass marketing expertise. Our focus is on products and services that have recurring
monthly revenues. A second key area is restructuring our non-regulated agricultural and
industrial businesses to separate them from the utility so that we can clearly focus on
the needs and expectations of these customers. The third key area is identifying tech-
nological opportunities that can increase our cash flow, earnings and gas throughput, such
as introducing natural gas-fired electric generator units for irrigation.
We believe our approach to retail services offers many advantages, including minimal
investment or operating expenses with limited risk. Our retail strategy also positions the
Company for unbundling when it does occur.
What competitive advantages does Atmos have in providing services in an
unbundled environment?
Tomorrow’s customers will insist on competitive rates, a choice of providers, superior
customer service that exceeds expectations, and enhanced product and service offerings
beyond the core business. We believe unbundling will occur in the long-term, although
it may be slower and less comprehensive than some have predicted. The states we serve
are taking a very measured, cautious approach to make sure that customers receive real
benefits. We have developed a consistent set of guiding principles for unbundling across
all regulatory jurisdictions in the areas we serve, and are participating in the proceedings
in those jurisdictions to ensure rules being developed provide for a level playing field.
As unbundling occurs, we believe that the incumbent utility or one of its affiliates will
have an advantage, both as a seller of the natural gas commodity and as the seller of other
products and services. We have an organization that is efficient and responsive to customers,
and our desire is to make it convenient for customers to do business with us.
How is Atmos using technology to support its vision for growth?
We are using technology to gain efficiencies in our current operations and to enhance
the services and convenience provided to our customers. We plan to eventually allow
customers the opportunity to receive their bills on line and remit payment electronically,
Total Assets
■ 94 $ 829,385
■ 95 $ 900,948
■ 96 $1,010,610
■ 97 $1,088,311
■ 98 $1,141,390
94 95 96 97 98
QAA Conversation with Bob Best (continued)
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