Southern Co. Touts "Strong Margin Contribution" From Retail Markets in AGL Acquisition

Although AGL Resources' retail operations were not a focus for Southern Company in its targeting of AGL Resources for acquisition (see yesterday's story), Southern Company did tout the "strong margin contribution from retail markets" as a value driver of the transaction during an investor presentation yesterday.

Although not specific, AGL typically uses the term "retail" to encompass both its retail commodity suppliers, such as SouthStar Energy Services, as well as its home protection and repair company.

In response to a question from an analyst regarding Southern's view on the retail businesses, and whether the merged company would do anything to de-risk the retail businesses, AGL executives cited the, "stability in those [retail] businesses," and said that the businesses have "performed well" over the last decade.

AGL executives did stress that non-regulated retail businesses account for less than 20% of earnings, with the bulk of earnings from regulated businesses.

Executives said that SouthStar Energy Services serves over 700,000 customers.