JACKSON — On Dec. 3, 2002, Atmos Energy (NYSE: ATO) completed the acquisition of Mississippi Valley Gas, the state’s largest natural gas utility, for about $150 million in cash and stock, and inherited a 5,500-mile distribution system, 335 miles of transmission pipeline and two underground gas storage facilities at Amory and Goodwin in Northeast Mississippi, with a combined working gas capacity of 2.05 billion cubic feet.
The transaction was Atmos Energy’s ninth major acquisition since 1986.
Atmos Energy named J. Kevin Akers, 39, as president of MVG. Matthew L. “Matt” Holleman III, 51, who had served as president and CEO of MVG since 1993, and as an executive officer of the company since 1987, assisted with the transition and stepped down when the sale was complete.
A native of Owensboro, Ky., Akers earned a petroleum engineering degree from the University of Alabama and worked as a senior gas engineer for the Indiana Utility Regulatory Commission. He joined Atmos Energy in 1991 as an engineer and later served, respectively, as vice president of Eastern Region Operations for Atmos Energy’s Kentucky division and vice president of Northern Region Operations for the company’s Louisiana division. Akers led the MVG transition team for Atmos Energy.
The Mississippi Business Journal caught up with Akers, to learn more about one of the state’s newest business leaders, and to ask him why the Dallas-based company, one of the largest natural gas distributors in the U.S., serving about 1.7 million utility customers, chose Jackson as the venue for its annual meeting to be held later this week.
Mississippi Business Journal: Atmos Energy enjoyed a banner year in 2002, with acquisitions that propelled the company to the nation’s third-largest pure gas distributor. Atmos Energy Corp. reported net income of $59.7 million for the fiscal year ended Sept. 30, 2002, compared with net income of $56.1 million for fiscal 2001. Why did Atmos Energy decide to hold its annual meeting in Jackson, Mississippi?
Kevin Akers: Although our annual meeting host location has routinely rotated between the different Atmos business units, we believed this would be a great opportunity to further introduce Atmos to Mississippi and Jackson and show our support for the state and community.
MBJ: Now that MVG is part of the Atmos family, what changes can be expected for MVG’s approximately 260,000 customers in 144 communities throughout 36 counties in Mississippi?
KA: Delivering superior customer service is paramount and we are passionate about it. Atmos Energy has a strong commitment to providing superior customer service. Our customers are the reason we’re in business and we are accountable for and take ownership of their issues. Today’s Atmos Energy-Mississippi Valley Gas customer can look forward to more payment options and benefits including, but not limited to:
• Customer can pay by credit card. The customer provides the necessary information to a customer service representative (CSR). After the information is validated, the transaction is completed and the customer is provided a confirmation number.
• Customer can pay by checking account over the telephone. Same procedure as above.
• Customer can elect levelized billing or budget billing. Levelized billing provides the customer with a rolling 12-month average bill thereby eliminating a “true-up” period. Budget billing provides the customer with the same monthly payment and has “true-up” or adjustment period.
• Customer can choose a specific billing date. Many of our customers, especially those on fixed incomes, like this feature because they can choose the day their gas bills are due each month, regardless of what billing and meter reading cycle they fall in. For instance, a senior citizen can choose to have their bill due on the fifth day of each month to coincide with the receipt of their Social Security check.
• Summary billing. Atmos’ system has the capability to produce summary bills enabling MVG to send customers with service at multiple locations one bill.
• Fraud detection. We utilize Equifax fraud service for customer service verification to prevent customers who have been disconnected for non-payment from being reconnected through fraudulent means or representations.
MBJ: Will the MVG name change?
KA: There are currently no plans to change the name of Mississippi Valley Gas. I will share with you that based on the results of an employee survey conducted last summer, our five other business units decided to change their respective names to reflect the parent company. The employees believed that one name-one company more accurately reflected our vision and culture.
MBJ: How will MVG employees be affected?
KA: Employees will see some improved benefits with Atmos Energy due to economies of scale of a larger company. For example, Mississippi Valley Gas employees will now have greater career opportunities because they are now eligible to apply for other job openings within the 12 states we operate. Employees will also have more healthcare options and a choice of healthcare provider. Training has been and will continue to be a top priority. Almost every employee has been involved in training classes related to new systems.
MBJ: What are Atmos’ growth areas outside Mississippi?
KA: Atmos is a company that has its roots in rural communities. Jackson is the largest city we serve. However, we are uniquely positioned around major metropolitan cities to capture residential and commercial growth. Several such locations are Franklin, Tenn., near Nashville; Olathe, Kan., near Kansas City; Slidell and Covington, La., north of New Orleans.
MBJ: How do Atmos’ price stabilization practices compare to those of MVG?
KA: On stability of gas supply pricing, I believe both programs have the same end result in mind and that is providing an economical source of natural gas for our customers. MVG does utilize a gas supply hedging program as does the Atmos business units to reduce exposure to gas supply price swings during the heating season. Both programs also utilize underground storage as a tool to further reduce or mitigate such price swings.
From a rate design perspective, similar to the MVG Stable Rate Filing, our Louisiana Division does have a Stable Rate Plan. The plans are similar in that routine filings are made to recover costs on a more timely basis, sending more accurate price signals versus the more traditional approach of filing full blown rate cases potentially spanning several years.
We recognize, though, that the most effective price stabilization program is a well-run operation, which encourages customers to do more business with us because of our great customer service and efficient operations. The more customers we serve, the more economical the services we can provide.
MBJ: We understand you are a “Southern boy,” who grew up in Kentucky and attended college at Alabama. How have you found the business climate in Mississippi, and in particular, the MVG corporate culture compared to Atmos?
KA: Corporate culture is as important to a company as is financial stability. I believe that Mississippi Valley Gas and Atmos’ corporate cultures are very similar. The building blocks for both companies were the same, employee focus, customer service and honesty and integrity.
Contact MBJ contributing writer Lynne W. Jeter at email@example.com</a.