Washington Gas Energy Services and Shell Energy Enter Into Strategic Supply
HERNDON, Va. -- February 20, 2013
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
WGL Holdings, Inc.
Ruben Rodriguez, 202-624-6620
Douglas Bonawitz, 202-624-6129
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