Release Date: Thursday, October 17, 2002

AGL RESOURCES CEO SAYS AMERICA'S RUSH TO DEREGULATE INDUSTRIES HAS UNLEASHED DESTRUCTIVE VOLATILITY

ATLANTA, Ga. — Paula Rosput, chairman and CEO of AGL Resources Inc., said history will not look kindly on the United States' rush to deregulate major industries like airlines, energy and telecommunications.

"I think we will be struck by how public policy and American business came to have such a profound belief that market forces could order up the economy much more efficiently than government and traditional regulation," Rosput said.

Rosput made her remarks while speaking October 17 to a group of Terry College of Business alumni and guests at the University of Georgia's Atlanta Alumni Center.

AGL Resources, based in Atlanta, is the parent company of Atlanta Gas Light, Virginia Natural Gas, SouthStar Energy Services, and other energy infrastructure holdings.

Reviewing the recent history of deregulation in America, Rosput said gradual deregulation of industries has been avoided in favor of wholesale dismantling of the regulatory framework, which she maintained has been less profitable and more disruptive to consumers. Deregulation has been especially tumultuous to the natural gas industry, where wholesale prices can vary dramatically due to supply and demand.

"This winter we're facing gas prices at wholesale that are twice what they were last winter at this time, and there's nothing we can do about it because this is all deregulated," Rosput said. Utilities have always had to collect back their costs, she said, but regulators used to be able moderate price increases by spreading the costs out over longer periods of time to keep consumers' rates from spiraling all at once. Without that moderating influence, the resulting price fluctuations are having destructive consequences.

"You've lost that common sense management flexibility in this deregulation, so you've got a terrifically volatile product, no price protection for the consumer, and no role for the regulator to try to manage that situation," she said. "Everytime we let this volatility unleash itself, we destroy a little bit of the demand for the product in this country."

A lack of regulation in California contributed to the energy shortages experienced in that state last summer, not to mention the collapse of some of the state's biggest energy suppliers, Enron among them. Rosput said she now expects that public policymakers in Georgia and the rest of the country will be forced to readdress deregulation.

"The Public Service Commission here in Georgia is looking at whether it should put some form of price control in place in the Georgia market," she said.

Rosput was named president and CEO of AGL Resources in August 2000. She was awarded the additional title of chairman this past February. She joined the company in 1998 as president and chief operating officer of Atlanta Gas Light Company.

Rosput was the featured speaker at the Terry Third Thursday executive speaker series, held on the third Thursday of each month at the Atlanta Financial Center in Buckhead. The program is co-sponsored by UGA's Terry College of Business and the Atlanta Business Chronicle.

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