Washington Gas Energy Services enters agreement with Shell Energy
- February 22, 2013
Herndon-based Washington Gas Energy Services Inc. has entered a five-year secured supply arrangement with Shell Energy North America (US) LP.
Under this arrangement, WGES will be able to buy the majority of its power, natural gas and related products from Shell Energy in a structure that reduces WGES’ cash flow risk. As a result of this Shell Energy will have a lien on WGES’ assets, principally its retail accounts receivables and contracts.
“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,” Terry D. McCallister, chairman and CEO of WGL Holding, Inc., said in a statement. “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.”
Washington Gas Energy Services Inc. is one of the largest competitive providers of electricity and natural gas in the mid‐Atlantic region. It supplies more than 350,000 customers in Maryland, Delaware, the District of Columbia, Pennsylvania and Virginia. Washington Gas Energy Services is an affiliate of Washington Gas Light Co. and is a subsidiary of WGL Holdings Inc.
Houston-based Shell Energy is a subsidiary of Royal Dutch Shell plc (Shell).