APPLICATION FOR NATURAL GAS CERTIFICATE OF AUTHORITY 

Please attach additional pages as necessary.  If any information is contained in an attached 10K report, audited financial reports, or any similar documents, please reference specific document and page number. Please file one electronic version, eight (8) hardcopies, and at least three (3) copies of any attachments.

I.	APPLICANT ADDRESS

Name of Company	Valdosta Natural Gas Services, LLC.
Address:	Street	1011 Slater Street
    		City	Valdosta	  State 	GA
Zip	31601
Phone No. (912) 259-0604
Fax No.	     (912) 259-9907
Email address	Pending

Name, address and telephone number of employee designated to receive and respond to Commission requests and who will notify the Commission of any changes to the information provided in this application while pending:
Name		Brent Phelts	
Title		Partner
Address:  (if different from above)
Street	1478 Mecaslin St. NW	
City	Atlanta		 State GA 
Zip 	30309
Phone No.  	(404) 875-7077
Fax No.		(404) 873-1289

II.	REGISTERED AGENT
If applicant is a non-resident of Georgia, give name and address of an agent or attorney in fact in this state upon whom process may be served in any suit against applicant.
Name of Agent 		Not Applicable
Name of Firm 							
Address:	Street						
		City     				  State 		
Zip 				
Phone No. 				 
Fax No. 				

III.	ORGANIZATION
1.	If a corporation, attach copy of charter marked “Exhibit A”.  Also attach a list of all directors and principal stockholders with the number of shares held by each, marked “Exhibit B”, and give name and addresses of the following officers:
President 					 Address 			
                           				      	  			
Vice President 					 Address 			
											
Treasurer					 Address 			
							   			
Secretary					 Address 			
							  			
Incorporated Information:  State 		  Date 			
2.	If applicable, provide the name(s) and business address(es) of the applicant’s principal and corporate officers in Georgia, if different from those above.
President 					 Address 			
                           				      	  			
Vice President 					 Address 			

Treasurer					 Address 			
							   			
Secretary					 Address 			
							  			
3.	Type of Organization:  (Check One)
	[X ]    Limited Liability Company
	[   ]    Individual
	[   ]    Partnership
	[   ]    Corporation
	[   ]    Mutual or Cooperative 
(Incorporated/Unincorporated)
	[   ]    Other						
4.	If a corporation or limited partnership, give Secretary of State’s seven (7) digit charter or file identification number 		
5.	Tax Identification Number  		58-2402237
6.	GA Revenue Sales Tax Number		Pending
7.	If applicant is a partnership or cooperative, give names and addresses of partners, officers and/or members.
Ron Borders – Partner				Celeste Martinez - Partner	
1714 Williams St.				1003 Williamsburg Dr.
Valdosta, GA 31601				Valdosta, GA 31602

Marcus Holt – Partner				Brent Phelts - Partner
203 Merwin St.					1478 Mecaslin St. NW			
Hahira, GA 31632				Atlanta, GA 30309

8.	Are any directors, partners, officers, or members affiliated with any other natural gas or energy-related company doing business in Georgia?
	Yes.
7.	If so, name company and affiliation. W. Brent Phelts, PE, dba Phelts Associates – an independent natural gas agency and consulting firm. 

8.	List the natural gas or energy-related companies doing business in Georgia with whom the applicant has affiliated relationships, including joint ventures and partnerships.
	Not Applicable
IV.	
AUTHORITY REQUESTED

1.	What delivery group(s) does the applicant seek to serve?
	[   ]	All Pools			[   ]	Columbus
[   ]  	Atlanta				[   ]	Gainesville
	[   ]	Ex-Atl. SNG			[   ]	Macon
	[   ]	Ex-Atl. Transco			[   ]	Rome
	[   ]	Augusta			[   ]	Savannah
	[   ]	Brunswick			[X]	Valdosta
	[   ]	Other					

V.	FINANCIAL CAPABILITY

1.          (A)	Demonstrate that the applicant’s capital base or other financial resources can withstand the business and financial risk and absorb the losses that might occur in providing this certificated service in Georgia.  
		
Valdosta Natural Gas Services, LLC  has the financial resources necessary to succeed in retail marketing of natural gas to residential and small business customers in Valdosta. The Company is a start-up and is going to operate in the smallest of the pipeline groups. As of right now the Company does not have any customers, but has lines to capital through personal wealth and investors. The Company has experience in residential gas sales, experience in gas supply and has sound business contacts in Valdosta. Three of the partners currently reside in either Valdosta or Hahira. Mr. Borders and Mr. Holt currently own and operate successful businesses in Valdosta. Mr. Borders is currently running for the State House of Representative seat vacated by Tim Golden in district 177. Mrs. Martinez worked for AGLC’s marketing department for seven years. Her first six years were in consumer education and information and her last year was in residential gas sales. Mr. Phelts is an expert in gas operations, terms of service, commodity purchase, transportation, sales and rates. He worked for AGLC in operations, sales and marketing and then helped AGLC start the Energy Spring. The partnership brings the best of business, residential gas sales and gas supply experience. 
 
(B)	Demonstrate that the applicant’s financial plans and resources will provide the means to implement the applicant’s business/marketing plans for this certificated service in Georgia. 

Since Valdosta Natural Gas Services will operate and sell gas in the Valdosta’s delivery group,  they will not need the resources as if they were attempting to  serve AGLC’s 1.4 million customers. Valdosta has approximately 12,000 customers and is served solely by South Georgia Natural. Since Valdosta Natural Gas Services will not be the only company selling gas to customers in Valdosta it is unknown at this time how many customers will enroll. A letter from Valdosta Bank and Trust will extend to Valdosta Natural Gas Services a $100,000 line of credit. This will be meet the initial financial requirements considering the limited customer base.

2.          (A)	Demonstrate that the applicant’s credit rating is currently equivalent to `BBB-` from Standard and Poor’s or `Baa3` from Moody’s; or

Valdosta Natural Gas Services does not have a credit rating from neither Standard and Poor’s or Moody.

(B)	Provide documentation that access to lines of credit, or agreements with other parties to provide financial support exist. 

See attached line of credit document from Valdosta Bank and Trust.

3.            (A)	Is a parent company or other  entity providing support for the applicant’s contractual obligations?  
			
	Not Applicable

(B)	If so, provide documentation verifying that such support exists, and to what degree.

Not Applicable

4.	Provide the applicant’s audited financial statements for the past three (3) years.  The financial statements must include balance sheets, related income, and cash flow statements for each of the past three (3) years.  If a parent company will support the applicant, the parent’s financial statements for the past three (3) years should also be provided.

Since Valdosta Natural Gas Services was set up this year to sell gas in the Valdosta delivery pools, they do not have audited financial statements.

5.	Provide details of any unconditional purchase obligations that require payments by the applicant in future periods. 

Since Valdosta Natural Gas Services is a start-up company there are no purchase obligations at this time.

6.	Provide a schedule of applicant’s non-cancelable operating lease commitments.

Valdosta Natural Gas Services has no non-cancelable operating lease commitments that would adversely affect its performance.

7.	Provide schedules detailing applicant’s long-term debt and available credit facilities.  Include in the response the installments due on long-term debt for the five years following the date of this application.

Valdosta Natural Gas Services has no long term debt at this time.

8.	Provide details of any joint venture(s) or general partnership agreements between the applicant and other parties.

Valdosta Natural Gas Services has no joint ventures or general partnership agreements with other parties at this time.

9.	Provide proposed terms of service, expected revenues, and rules for contracting with firm customers as referenced in O.C.G.A. §§ 46-4-153(a)(2)(C) and 46-4-160(c).

(A)	The rules for contracting with firm customers shall include, but are not limited to the following:

1)	The bills and contracts must be written in clear and plain language.  

2)	The bills must contain sufficient information to allow customers to verify the accuracy of their bills.

3)	The pricing structure must be clearly explained, including any late fees or interest charges.

4)	The contract terms must be specified, along with any termination rights.

[a]	Firm customers must be allowed to cancel their contract without penalty within 48 hours of signing.

[b]	Firm customers must be given the right to cancel their contract if they relocate out of the delivery group.

(1)	The bill must include an emergency telephone number.

Because the final rules for retail sales in Georgia have not been issued, Valdosta Natural Gas Services has not made all of its final decisions concerning the above issues. Valdosta Natural Gas Services will follow the rules set forth by the Georgia Public Service Commission for contracting with firm customers. All items above will be strictly followed. Valdosta Natural Gas Services will forward to the Commission contracts, finalized rules as they are completed. Valdosta Natural Gas Services does not plan to use contractors to sell to customers or to use telemarketers as the Company feels they intrude on the privacy of the customer.  Valdosta Natural Gas Services plans to use the standard contract approved by the Gas Industry Standards Board.

•	Valdosta Natural Gas Services will provide definitions of the terms and conditions of service so that the agreement between Valdosta Natural Gas Services and the customer is clear as possible. Valdosta Natural Gas Services will not purposely try to mislead the customer in any way.
•	All late payment charges or finance charges will be clearly stated.
•	All telephonic conversations that lead to a verbal contract will be followed up by a written confirmation including terms and conditions of service.
•	Valdosta Natural Gas Services will follow the rules for disconnecting or reconnecting gas to customers as dictated by the Commission or AGLC.
•	Valdosta Natural Gas Services will provide gas supply and retail sales to customers with the terms and conditions agreed upon under the specific contractual agreement with that customer. 
•	Valdosta Natural Gas Services will provide a local telephone number with a local contact for questions concerning their billing or payment. The bill will provide AGLC’s emergency number.
•	Meter reading information will be clearly stated on the bill so that end use customers can determine the volume consumed. Questions concerning meter reading will be directed to AGLC until that service is deregulated.
•	All charges including but not limited to, late charges,  deposits, etc. will be set out clearly on the bill.
•	All contracts and bills will be items that would be standardized for the industry for content. 

(B)		The applicant acknowledges the fact that it must comply with Federal 	Telemarketing Rules and Georgia Consumer Protection Laws.

Valdosta Natural Gas Services will comply with all Federal Telemarketing Rules and Georgia Consumer Protection Laws. Valdosta Natural Gas Services does not plan to use telemarketing.

10.	Provide applicant’s plan to provide for funds to be held in escrow by an independent third party in the event that prepaid services are to be offered or deposits are required.

Currently Valdosta Natural Gas Services does not plan to offer prepaid services as an option, therefore we have no plans to escrow such funds. However, if such plans become available for customers, then an agent w

As for deposits, the policy of Valdosta Natural Gas Services is not to require a deposit from a new, prior, or existing customer provided that the customer either passes Valdosta Natural Gas Services’ credit check or provides another form of security satisfactory to Valdosta Natural Gas Services. Valdosta Natural Gas Services may require a deposit if a customer’s credit is, or becomes unsatisfactory during the term of its agreement with Valdosta Natural Gas Services. The amount of any deposit shall be determined by an appropriate percentage of the estimated charge for service for 12 months. Payment of a deposit is a condition precedent to the receipt or continued receipt of any service for which a deposit is required.

If a deposit is accepted from a customer, Valdosta Natural Gas Services plans to apply the following rules for administering the funds:

Deposits shall bear simple interest at the per annum rate, if any, specified from time to time for payment by the Commission; and such interest shall be payable at the time the deposit is refunded to depositor provided said deposit remains continuously with Valdosta Natural Gas Services for a period of six months or longer. Deposits shall cease to bear interest upon refunded of the deposit, either by credit to the customer’s account, or otherwise, or upon discontinuance of service or termination or cancellation of customer’s contract.

Retention by Valdosta Natural Gas Services prior to final settlement of a deposit shall not be considered as a payment of any bill for service. Valdosta Natural Gas Services may, however, apply a deposit against unpaid bills for service; in such case, the customer will be required to reestablish a deposit in an amount satisfactory to Valdosta Natural Gas Services.

Upon discontinuance of service with Valdosta Natural Gas Services or termination or cancellation of customer’s contract, Valdosta Natural Gas Services shall have a reasonable time in which to read the meters and to ascertain that the obligations of the customer have been fully performed before being required to return a deposit. Upon final discontinuance of the service with Valdosta Natural Gas Services and full settlement of all bills by the customer, any deposit accrued interest not previously refunded, if any, will be returned to the customer, or the deposit may be applied to the payment of any unpaid accounts of the customer and the balance, if any, returned to the customer.

The contract when complete will have the final information about the deposit. This information will be a guide until all rulings are final.

11.	With respect to any pending litigation and actual claims assessment:

(A)	Provide the amount or range of damages claimed by the adverse party.

(B)	Provide information relevant to whether an estimated claim from a loss contingency has been accrued by a charge to income.

Valdosta Natural Gas Services has no loss contingency as there is no pending or known litigation or claims exist.

12.	Provide the applicant’s plans (with respect to the applicant’s ability to continue as a going concern) for dealing with any of the following existing conditions or events:

(A)	Recurring operating losses.

(B)	Working capital deficiencies.

(C)	Negative cash flows from operating activities.

(D)	Denial of credit from suppliers.

(E)	Restructuring of debt.

(F)	Need to dispose of substantial assets.

(G)	Substantial dependence on the success of a particular project.

(H)	Uneconomic long-term commitments.

(I)	Need to significantly revise operations.

(J)	Legal proceedings, legislation or similar matters that might jeopardize the 	applicant’s ability to operate.

(K)	Loss of a key franchise or certificate of authority.

(L)	Loss of a principal customer or supplier.

Valdosta Natural Gas Services is a newly formed company. None of the conditions set forth in A – L currently exist. Valdosta Natural Gas Service will diversify and not be dependant on one supplier, or customer.

13.	Provide any other information that the applicant believes is relevant to the evaluation of financial capability.

VI.	TECHNICAL CAPABILITY 

1.	Provide the name, business address, principle place of business, and a brief statement of experience and qualifications of the management team which will direct the Georgia operations; include the designated contact employee.

Ron Borders – Partner
Mr. Borders is a real estate broker in Lowndes County. Mr. Borders currently operates a real estate brokerage. He is a former city councilman and served as Mayor-Pro Term in Valdosta for eight years. Mr. Borders is currently running for District 177 seat in the Georgia House of Representatives. Mr. Borders has  been president of Habitat for Humanity for the past three years. He brings extensive management skills to the corporation as well as the many business contacts in Valdosta.

Marcus Holt – Partner
Mr. Marcus Holt is a real estate developer and builder of commercial buildings. He currently resides in Hahira, Georgia. Mr. Holt runs his own construction business and has been very successful. He brings to the Company vast management experience in running a small business as will as many business contacts in Hahira and Valdosta.

Celeste Martinez – Partner
Ms. Martinez graduated from the University of Georgia and was hired by Atlanta Gas Light Company in 1989. Ms. Martinez worked in the consumer education department. She provided Atlanta Gas Light Company’s customers with safety programs as well as the fundamentals of the pipeline system. She later worked in residential sales and gained valuable outside sales experience. Ms. Martinez brings to the Company the knowledge of natural gas safety, application and residential sales.

Brent Phelts – Partner
The day to day operations management will be headed by W. Brent Phelts, located at 1478 Mecalsin Street, Atlanta, Georgia 30309.  

W. Brent Phelts, PE is a partner of Valdosta Natural Gas, LLC. and owner of Phelts Associates, an independent natural gas agency and consulting firm.  Mr. Phelts is a registered professional engineer in Georgia and has more than 24 years experience in the natural gas distribution, engineering and transportation.  He retired from Atlanta Gas Light Company (AGLC) with 23 years service as a gas distribution engineer, construction supervisor and highway coordinator, Division and Chief Industrial Engineer,  and Director of Commercial and Industrial Marketing.  Mr. Phelts was involved with gas deregulation, pipeline allocation requirements and implemented gas transportation programs and rates for Atlanta Gas Light Company beginning in 1985.   He was the Director responsible for the implementation of consistent gas delivery policies and rules for energy users served by AGLC’s from 1991 to 1995.  

Additionally, Mr. Phelts was the key experienced member of the start up team of Atlanta Gas Light Company’s unregulated affiliate, The Energy Spring, Inc.  Mr.Phelts currently manages natural gas purchasing, nominations, rate negotiations and risk management for large industrial, and commercial facilities located in Georgia, South Carolina, North Carolina, Alabama, Ohio, and Mississippi. He also has been awarded gas consulting and management contracts with several State of Georgia facilities.

Mr. Phelts participated in developing daily priority allocation, service line extension  rules, curtailment policies, balancing methods, contracts, and billing formats for AGLC. Some of these remain in use under current rates. It is significant that he has first hand knowledge and experience documenting all end use priorities and implementing practical rules to protect the safety and integrity of the gas distribution system during force majeure conditions.

The Staff  to manage local communications, nominations, balancing, and invoicing have not been hired to date.   An agreement to manage transportation on the interstate pipeline and provide access to major gas production has been reached with major existing natural gas pooler.  This pooler is authorized and met credit requirements on Southern Natural Gas Company and Atlanta Gas Light Company. 

All four of the partners together make a great fit for starting and operating a successful small business. The management experience in operating a small business, residential gas sales, natural gas knowledge, and gas supply fit every piece of puzzle needed to operate an energy marketing company.

2.	Provide the following information:
(A)	A list and description of the applicant’s comparable gas marketing activities in other jurisdictions, (annual sales, volumes, or other measure of activity).
This is a new corporation specifically formed to supply natural gas to retail customers of the Electing Distribution Company, therefore the company depends on other agreements with other gas providers. Brent Phelts is an agent and provider of natural gas on the primary pipelines serving south Georgia.  He has an agreement for supply with a major gas marketing firm who is currently delivering more than 150,000 MMBtus per day of gas moving on Southern Natural Gas Company’s pipeline.   Brent has arranged gas management contracts in Georgia for Firm Transportation, Interruptible transportation and gas supply for many large industrial facilities in the southeast.

(B)	Any information as to whether certificates of authority or other jurisdictional authority for the sale of natural gas have ever been issued by any other state(s) and whether such certificates are current.  Also disclose whether any application for certification has ever been denied and whether any certificate of authority issued to it or an affiliate has ever been suspended, revoked, modified, or sanctioned. 
This corporation nor their affiliates have not made any other application for a Certificate of Authority to sell natural gas.  Thus there has been no revocation or rejection of such authority.

(C)	The applicant’s estimated or anticipated gas supply and capacity, as well as limitations, if any, on gas supply.  If appropriate, this may be filed as trade secret.
	The estimated capacity required is approximately 20,000 MMBtus per Day. 	This may vary as the market develops. 

	The Company will have access to virtually all major gas producers through strategic alliances and trade agreements with existing gas marketing firms.   SCANA, Natural Gas Clearing House, Texican, SONAT and other large marketing firms can supply our needs from the receipt point to Atlanta Gas Light Company’s system.  An agreement has been reached with a gas marketer which  provides the full access to the  gas supply and all necessary services to deliver gas services to retail and interruptible customeers.

	The firm transportation capacity and storage for Certified Marketers will be from AGLC. Use of this capacity asset will be the primary function for Marketers. We can compete with other gas marketers through the existing agreements for access to all well head pricing opportunities.  Additionally, we have access to Firm Transportation Capacity and gas supply through  gas  supplier agreements.

(D)	The applicant’s contingency plan to provide gas to firm customers in the event that a supply disruption occurs.
The contingency plan to supply gas service during a supply disruption will be similar to all other marketers.  We do not expect to loose supply any differently than any other marketer,  therefore many marketers will be involved in the same situation.  Under emergency conditions we will implement a plan where interruptible customers would be curtailed first, then customers with alternate fuels would be advised of the problem and finally a plan to limit gas based on end use priority, ( see (E) below ). Under this situation public health and safety are paramount to price or profit  These conditions are unlikely to occur, but all marketers would be effected..

	For a localized and specific  disruption of our supply plan incorporates supplier receipt point and pipeline diversity.  We will constantly  monitor availability and  access to AGLC’s peaking services and LNG, underground pipeline storage, balancing gas, and other suppliers ability to support the system. Typically, we will reroute gas supplies and nominations to other pipelines, and suppliers.   We have access to non AGLC  Firm Capacity and Supply that may avoid any disruption.

(E)	The procedures that will be employed in a gas-related emergency (i.e., force majeure, interstate limitations).
Our company will have every customer prioritized by need, alternate fuel and load.  A contact list will be maintained for a Force Majeure situation where gas supply may be disrupted in an emergency situation.  The current trend to curtail based on price is not appropriate for residential and most commercial. For force majeure situations we will implement the priority of service requirements once approved and used by AGLC for protecting their gas distribution systems. Simply protect the gas system limiting the highest priority users last.  These are as follows: Residential, housing, healthcare, essential agricultural, commercial, and then general industrial.  The curtailment plan for a force majeure condition will be similar to that published in AGLC’s Terms of Service prior to October 1993.  This will not necessarily be the curtailment plan for Interruptible Customers.

(F)	A notarized document stating that the applicant has met or has the ability to meet the creditworthiness standards of the interstate pipelines serving the state of Georgia and the Commission approved creditworthiness standards of the applicable electing distribution company.
The technical capability of the company is based on the experience and knowledge of Brent Phelts and an agreement with existing poolers on both Southern Natural Gas Company and Atlanta Gas Light Company.  The primary supply agreement is with a firm successfully operation in Georgia for more than 10 years. The long term success managing firm capacity for industrial and municipal facilities demonstrates capability for Transportation and Exchange operations.  

	Gas will be purchased from one or more qualified gas suppliers owning production, pipeline capacity, and accessible 24 hours a day.   Gas supply on the interstate pipeline will be managed by  Brent Phelts under an agreement with the qualified gas pooler.  The credit requirements have been met at both Southern Natural Gas Company and Atlanta Gas Light Company.  Additionally, credit has been extended to the supplier from other major gas produces.
2.	Provide any other information that the applicant believes is relevant to the evaluation of technical capability.

VII.	DISPOSITIONS

1.           
(A)	Has the applicant, any of its officers and/or its directors declared bankruptcy or had a civil judgment rendered against it/him/her?

Not Applicable

(B)	Has the applicant, any of its officers and/or its directors been convicted of or pleaded guilty or nolo contendere to any misdemeanor, felony or crime of moral turpitude?

Not Applicable

If either question is answered affirmatively, please provide certified copies of the legal disposition papers.

2.	A statement disclosing any existing, pending, or past adverse rulings, judgments, litigations, contingent liabilities, revocations of authority, administrative regulatory investigation (i.e., FERC, SEC) and other matters relating to financial or operational status for the past three (3) years that materially affect the financial or operational status.
Not Applicable

VIII.	AGREEMENT

This applicant agrees to abide by all applicable laws under the official code of Georgia annotated, all applicable rules and regulations of the Georgia Public Service Commission and findings, conclusions, terms and conditions set forth in pertinent Commission orders.

Officer or Attorney/Agent
						
Name		  W. Brent Phelts		
Address:	Street 	1478 Mecaslin Street
City 	Atlanta,  Georgia
Zip 	30309
	   	Phone No. 404-875-7077

IX.	ATTESTATION
Under penalties of perjury, I declare and affirm that the statements made in the foregoing application, including accompanying statements and attachments are true, complete and correct.  I understand that any false or misleading information in, or in connection with my application may be cause for denial or loss of certificate.

W. Brent Phelts		
Printed Name
Partner						
Position
							
Signature
							
Date

Subscribed and sworn before me this
		 day of  		 , 19 		

(Notary Public)