Atmos Energy 1999 Annual Report Download - page 21

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Atmos
Energy
Corporation
17
Woodward Marketing, LLC. Woodward Marketing, LLC contributed $7.2 million pre-tax
earnings in 1999, up from $3.9 million in 1998, due to increased sales to existing customers,
adoption of EITF 98-10 in 1999 and new customer additions. Atmos owns a 45 percent
interest in the natural gas services company, which serves the Company, industrial customers,
municipalities and natural gas utilities in the Southeast, Midwest and California. Atmos
expects Woodward’s growth to continue through increased gas usage by existing customers
and by the addition of new customers. Atmos is considering opportunities to market
electricity as an added service through Woodward Marketing, LLC.
Enermart Energy Services, Inc. The Company serves a large agricultural market and also
industrial customers in West Texas through Enermart Energy Services, Inc. The Company
took significant steps in 1999 to restructure its industrial and agricultural marketing business
and to separate it from the Company’s utility operations.
Enermart markets natural gas to farmers for powering irrigation pumps during the spring
and summer months. Irrigation revenues in West Texas decreased by 45 percent in 1999
compared with last year, due to rainfall that exceeded average rainfall levels for the region
by more than 32 percent.
Industrial customers include feedlots and cotton gins, as well as other non-agricultural
large natural gas users. Enermart also promotes new natural gas technologies, such as gas-
powered electric generators. The Company sells the generators, performs the installation,
assists with the startup and provides project financing. The generators significantly reduce
electricity costs, require little maintenance and are portable. In 1999, Enermart opened
three customer service centers to provide hands-on customer support, including analysis of
customer needs and information about new gas equipment and technologies.
Atmos Energy Services, Inc. Atmos Energy Services, Inc. (AESI) is preparing to market
new retail products and services to Atmos‘ approximately one million existing natural gas
customers. AESI is evaluating a number of products and services to offer to customers by
developing partnerships with experienced mass marketers. The Company conducted a pilot
offering of a utility security product during 1999, and received a very favorable response to
the offering. In addition, when unbundling does occur, AESI will offer customers the natural
gas commodity, and possibly electricity, as well.
Natural gas storage. The Company’s natural gas storage facilities contributed $1.3 million
in net income in 1999, compared with $1.8 million in 1998. Underground storage facilities
in Kansas and Kentucky allow the Company to purchase natural gas during the summer
when prices are lower, and store it for use by the Company or to sell to others during the
winter when natural gas prices are typically higher.