southern company logo SouthernCompanyGas.com

Fuel for Life

2020 Progress Report

CONTENTS:

Introduction

Our Customers & Communities

Our Innovation/Our Financials

Our Employees

Our vision, Fuel for Life, guides us in all that we do, and that has never been more evident than in 2020.

In a year unlike any other we’ve seen, our company came together to support each other and the communities we serve. We reemphasized our focus on people and well-being, and the results have been undeniable. Our level of community engagement has never been higher, our customer satisfaction scores continue to rise as a result of our hard work, and we continue to build on our history of operational excellence.

I. Introduction

Introduction - 1

Chairman's Letter

kim greene

A Year of Accomplishments

In our 2020 Progress Report, we want to highlight all the incredible things we’ve accomplished as a company and what we’re excited about in the coming years.

On the customer side, I’m proud of the increasing value we bring to customers. Our renewed focus on customer service and engagement has not only led to our successful launch of Keep Me Informed and digital payment options, but many of you have made a personal difference in your communities by volunteering during this tough year. We responded quickly to the COVID-19 pandemic to ensure the safety and well-being of our customers and employees, and we continue to offer support and relief through our Energy Assistance Programs.

Internally, we launched FUEL, which has been a wonderful mobile app to keep all of us connected with each other and the company in real time. We reinforced our safety processes and culture with programs such as Human Performance and critical risk management. And importantly, in response to the events of this summer, we’ve redoubled our efforts to be a more diverse, equitable and inclusive organization. We are committed to improving our own business practices and being an important voice in our communities. This is a movement, not a moment–and we will be in it for the duration.

We’ve always been a leader in sustainability, and we continue our efforts and progress on the environmental front. In this report, you’ll see how we are taking a portfolio approach to achieve net zero carbon emissions from our operations and broader sustainability objectives.

I’m proud of what we’ve accomplished together to make our workplace and our communities better. We are on the forefront of creating positive change and I’m looking forward to a great 2021.

Sincerely,

kim greene's signature

Kim Greene

Chairman, President and CEO

Southern Company Gas

Introduction - 2

Our Business

Natural gas comprises more than one-quarter of all primary energy used in the U.S. and is directly linked to jobs and economic health.

We provide efficient natural gas solutions for approximately 4.3 million customers through our regulated distribution companies in four states.

There are nearly 75 million natural gas customers in the United States. Natural gas serves nearly 69 million homes; 5.5 million businesses like hotels, restaurants, hospitals, schools and supermarkets; 185,400 factories; and 1,825 electric generating units. On a daily basis, the average U.S. home uses 175 cubic feet of natural gas.

We proudly serve 660,000 retail customers through our companies that market natural gas.

Our Family of Companies

Utilities

  • Atlanta Gas Light
  • Chattanooga Gas
  • Nicor Gas
  • Virginia Natural Gas

Wholesale

  • Nicor Enerchange

Our Family of Companies

Midstream

  • Central Valley Gas Storage
  • Golden Triangle Storage

Retail

  • SouthStar Energy Services

Pipeline Investments

  • Southern Natural Gas
  • Dalton
  • Horizon
  • Magnolia
  • SCG Pipeline
  • PennEast (in development)
atlanta gas light logo

Pedro Cherry

President and CEO,

Atlanta Gas Light and Chattanooga Gas

pedro cherry

2020 Reflections: I joined this summer, in the middle of the COVID-19 pandemic, and I was impressed – we have a family-type environment where people care about each other and do the right thing. Our business adapted well to COVID-19 and we were able to maintain high levels of reliability and resiliency when our customers needed us the most. You can see that reflected in our industry leading customer satisfaction results.

Plans for 2021: Looking ahead to next year, we’re excited about focusing on our five pillars: safety and well-being, employee engagement and culture, customer experience and operational experience, external effectiveness, and growth and profitability.

We’re looking to double down and reemphasize well-being – focusing on taking care of our employees and their families, while improving the customer experience and elevating our community involvement. We’re going to continue empowering our team. More empowerment means we’re more adaptable and agile. We saw this year how that benefits our company, customers and communities.”

–Pedro Cherry

nicor gas logo

John Hudson III

President and CEO,

Nicor Gas

john hudson

2020 Reflections: 2020 was a big milestone year. We filed our first renewable natural gas tariff, which speaks to our net zero goals. We developed and launched the northern Illinois initiative, an economic development initiative among the 600+ communities we serve. We launched our 100% Connected initiative for employees, encouraging everyone to be connected to their communities, to our work, to each other and to our customers. And we substantially completed our meter modernization.

We’re also proud of our efforts at Pembroke, how we’ve been able to serve our customers through COVID-19 and all the care packages we enabled through Shipt.

Our supplier diversity numbers continue to improve. In 2020, 46% of our spend was with diverse suppliers.

Plans for 2021: We’re going to take everything to a whole new level. Southern Company has a net zero goal for 2050 for enterprise operational carbon emissions. At Nicor, we’re trying to get there by 2030 with regards to our methane emissions. It’s bold but doable, and it’s aligned with our vision and our customers.

We’ll also be focusing on our four strategic pillars: safety and reliability, growth, customer and community engagement, and employee engagement.

–John Hudson III

southstar energy services logo

Peter Tuminello

Retired Group President of Commercial Businesses,

Southern Company Gas

peter tuminello

2020 Reflections: We’ve simplified our commercial strategy by exiting some businesses, streamlining and growing others this year. We’ve had to part with some of our commercial businesses that included selling our interest in Pivotal LNG, our interest in the Atlantic Coast Pipeline Project, and Jefferson Island Storage. The Company values the accomplishments of these businesses and I’m proud of our staff who have been tremendously focused in executing on our plan.

SouthStar and its Georgia Natural Gas businesses serve as a strong presence in retail energy – and they outperformed their targets in 2020.
We also have a 50% interest in the Southern Natural Gas Pipeline, together with interest in several other pipelines throughout the eastern half of the country – all performed well.

We served on the Board of the Interstate Natural Gas Association of American (INGAA) and I serve as Chairman of the Climate Subcommittee, where we successfully developed a clear climate policy for INGAA at the end of 2020.

Plans for 2021: We are positioned well for 2021 and beyond. We continue to execute a low-risk commercial business plan for modest growth and will continue to position these businesses for a low-carbon future.

-Peter Tuminello

virginia natural gas logo

Robert Duvall

President,
Virginia National Gas

robert duvall

2020 Reflections: I’m proud of our customer service progress this year. We did employee workshops and training and made operational changes to how we set up appointments and respond to emergency calls. Through it, we saw a sustained customer satisfaction score increase.

This year, we also put a different lens on our philanthropic giving. About 1.6 million people live in the areas we serve, so we asked ourselves, “where in our backyard are there underserved communities?” It’s in those communities where we partnered with local organizations and made donations.

Lastly, we increased our spend with diverse suppliers by 50% over the prior year. That’s important to us, to do business with people whose values line up with ours.

Plans for 2021: In 2021, we implemented our Fueling Equity effort to increase our conversation on race and justice, both internally and with our suppliers.

We’re also excited to continue to promote natural gas as a foundational fuel for a clean energy here in Virginia – and beyond. We deliver an energy source to our customers that is clean, safe, reliable and affordable.

-Robert Duvall

II. Our Customers & Communities

Our Customers & Communities - 1

We’ve transitioned more than 1 million customers to paperless billing.

Working to improve our
customer experience

At Southern Company Gas, we have been putting renewed effort into enhancing our customer service and engagement processes. Not only has our customer base grown and diversified, but our customers’ preferences have evolved as digital channels and technology use have proliferated. To make it easier for our customers to do business with us, we have been implementing new channels of engagement by deploying innovative digital tools. Here are some recent milestones we have reached.

One million customers have opted to receive digital billing statements. Between March and December 2020, approximately 100,000 customers chose to adopt paperless billing, compared to approximately 51,000 customers during the same period in 2019. By switching to digital statements, our 1 million customers are annually using 375 fewer tons of paper, which offsets 6.7 million pounds of carbon dioxide equivalent in the atmosphere, per the Environmental Paper Network Calculator. In addition, these customers are 21% more satisfied than those receiving paper bills, according to company-conducted surveys.

Thanks to hard work, Southern Company Gas is now a leader in offering multiple easily accessible digital billing options through

  • Native smartphone mobile wallets – Apple Wallet or Google Pay
  • My Account online bill management site
  • A bank or credit union’s online banking bill pay section
  • A secure email billing attachment
Our Customers & Communities - 2

Making strides with
Keep Me Informed

Keep Me Informed (KMI), which launched in August 2019, provides customers with status updates about their scheduled appointments. To complement the launch of text messages that customers receive about their appointments, in 2020 we introduced

  • A customer portal with more appointment details, including a picture of the assigned service representative and their estimated time of arrival
  • A rescheduling portal for eligible order types
  • A scheduling portal for customers in need of eligible service reconnections
  • The ability for customers to cancel appointments from KMI text messages
  • The ability for customers to opt in to receive phone call notifications instead of text messages about the status of their appointments

Improving efficiency and
service quality

To improve our billing and meter reading processes, we introduced Robotic Process Automation. RPA is the computer-aided automation of repetitive tasks, data entries, data reconciliation, and more. By adopting RPA, we are now able to automatically process formerly time-consuming manual tasks, such as bill verification and issuing meter credits, and do so 24 hours a day. This not only improves our customer service efficiency, but it is allowing our staff to provide enhanced service quality as we can now focus on the valuable projects and tasks that need human touch.

Responding to COVID-19
on all channels

Our efforts over the past year to increase our digital functionality and channels of engagement have allowed us to quickly address customer needs during COVID-19. For example, we added a texting feature to notify customers with past-due balances stemming from COVID-19 of payment arrangement options available; non-registered My Account customers are now able to make payment arrangements as a guest. We also developed the functionality to personalize emails with helpful information that is specific to the customer, such as grant amounts that were being applied to their accounts.

Our Customers & Communities - 3

We’ve been providing relief and support throughout the COVID-19 Pandemic.

Energy assistance programs

Southern Company Gas utilities have been supporting customers with past-due balances as a result of COVD-19. From flexible payment arrangements to company-funded bill payment assistance programs, we have focused on finding ways to help struggling customers pay their bills.

Atlanta Gas Light

  • Senior Citizens Discount Program
  • Expanded weatherization, appliance relief
  • Gas bill assistance

Chattanooga Gas

  • Chattanooga Gas Alternative Payment Program
  • Chattanooga Gas Warm Neighbors
  • Budget Payment Plan
  • Extended Payment Arrangements
  • LIHEAP (Low Income Home Energy Assistance Program)

Georgia Natural Gas

  • HEAT (Heating Energy Assistance Team)
  • St. Vincent DePaul TrueBlue Award & Grant Recipient
  • Budget Billing Plan
  • Extended Payment Arrangements

Nicor Gas

  • Nicor Gas COVID-19 Bill Payment Assistance Program
  • Nicor Gas Energy Aide Program
  • Percentage of Income Payment Program
  • Nicor Gas Sharing Program
  • Budget Payment Plan
  • Extended Payment Arrangements
  • LIHEAP (Low Income Home Energy Assistance Program)

Virginia Natural Gas

  • Coronavirus Relief Funds
  • Salvation Army EnergyShare
  • LIHEAP (Low Income Home Energy Assistance Program)
  • Budget Payment Plan
  • Extended Payment Arrangements
Our Customers & Communities - 3

Driving excellence with speedy emergency response, empathetic service and quick appointments

Across our Southern Company Gas utility companies, we have an impressive 3.9 million contact points with our customers and have completed approximately 420,000 total service appointments each year. We are proud to report that customers are taking note of our ongoing dedication through these touchpoints, as well as through the customer service and engagement improvements we have made.

Since 2016, our overall J.D. Power Customer Satisfaction Index has risen from 707 to 755. Our year-over-year growth since 2017 of 30 points is double the industry average.

Trending in the right direction

11 years

of continual year-over-year growth in Customer Satisfaction

10%

improvement in keeping customers informed since 2016

25-point

gain in providing choice and ease to view and/or pay bill since 2017

Our Customers & Communities - 4

Serving our communities

We’re not only committed to providing outstanding service to our growing and diversifying customer base but to being better stewards in the communities that we serve. We are increasing our engagement at the community level and working to create a positive impact in the lives of our customers.

Our Pembroke Township and COVID Relief efforts are two different ways in which we have been working hard this year to make a difference.

Working to provide service to Pembroke Township

Pembroke Township, Illinois, about 60 miles south of Chicago, is home to about 2,100 residents. The median income is $16,000, and, according to the U.S. Census Bureau, the township has a 30.2% unemployment rate and a 33.9% poverty rate.

Often referred to as “forgotten,” the township lacks access to natural gas. Instead, residents rely on propane, wood-burning stoves and electric space heaters. Some residents still do not have indoor plumbing and rely on outhouses.

Nicor Gas is working to change that. Nicor is partnering with local and state legislators, community leaders including the Rev. Jesse Jackson and the Rainbow/PUSH coalition to bring natural gas to Pembroke.

“Extending a gas pipeline into Pembroke Township would improve quality of life for residents by providing them with clean, safe, reliable, affordable natural gas. But it also would create a foundation for economic and infrastructure development, creating jobs and encouraging businesses to locate in the community.”

–John Hudson III
Nicor Gas, CEO

It’s a tall order; building a 29-mile pipeline extension would cost more than $8 million, require regulatory changes and support from residents and businesses of Pembroke, the state of Illinois and the U.S. Department of Agriculture. But Nicor Gas is committed to making this expansion project happen.

Our Customers & Communities - 5

Supporting COVID-19 Relief

Local and National Partner Programs Supported

  • United Way
  • Low Income Heat Energy Assistance Program
  • ClearPoint Credit Counseling
  • Illinois Home Weatherization Assistance Program
  • Virginia COVID-19 Energy Assistance Program
  • Salvation Army EnergyShare
  • Crisis Assistance
  • St. Vincent de Paul Georgia
  • H.E.A.T.
  • Project SHARE of the Salvation Army

Charitable Aid Footprint

  • California
  • Georgia
  • Illinois
  • Louisiana
  • Tennessee
  • Texas
  • Virginia

Southern Company Gas and its charitable foundations have invested over $3 million to support COVID-19 relief efforts in our service territories. We’ve also been partnering with local and national organizations who can provide direct assistance to our customers.

graph

Our Customers & Communities - 6

COVID-19 relief efforts by our
employees and customers

In addition, we also partner with our employees and customers to make an even bigger impact. Since March, Southern Company Gas subsidiaries Chattanooga Gas, Nicor Gas and Virginia Natural Gas received $160,000 in donations from customers wanting to help community members facing financial hardship. These funds complement the COVID-19 relief efforts of Southern Company Gas and its subsidiaries and represent a nearly 20% increase over the donations received during the same period in 2019.

Southern Company Gas employees have found creative ways to engage with their communities to curb the escalation of food insecurity and help those in greatest need. For example, Atlanta Gas Light, Nicor Gas, Virginia Natural Gas and Chattanooga Gas held drive-through food drives and facilitated the delivery of 110,000 meals across the Southern Company Gas territories.

Atlanta Gas Light

  • 20,000 pounds of food / 37,254 meals
  • $5,000 in donations
  • 14 Georgia food banks

Nicor Gas

  • Monetary drives supporting 2 food banks
  • $20,000 in donations
  • 60,000 meals

Virginia Natural Gas

  • 3,000 pounds of food / 6,000 meals
  • $1,000 in donations
  • Two Virginia food banks

Chattanooga Gas

  • Virtual Volunteers
  • 500 pounds of food / 3,080 meals
  • $1,000 in donations
  • Chattanooga Area Food Bank

Delivering care packages in partnership with Shipt

A first-of-its-kind charitable effort for Southern Company Gas in 2020 was our partnership with Shipt, Target’s grocery delivery business, to deliver care packages of food and household essentials to customers in need during COVID-19.

Led by our marketers in Georgia, this effort was launched in an impressive two weeks, bringing together more than 15 departments and almost 100 people to plan and execute it across four states. The program was launched on April 9, 2020, and the feedback was nothing short of stunning.

The program was administered by Southern Company Gas representatives during customer service calls. They identified which customers were most in need of receiving a Shipt care package. In the Nicor Gas region, the team also took this opportunity to offer energy savings kits to customers, and more than 5,000 kits were distributed.

“These calls are emotional. People really need this! A lady just started crying and you can hear how much of a help it is for her. It’s really amazing what we are doing here. I am so blessed to be a part of this project.”

– Will Okoye
Senior Marketing and Outreach Energy
Efficiency Representative

While each customer’s situation was unique, there were some stories of people unexpectedly thrown into emergency survival mode because of COVID-19 – there was a family where both spouses lost their jobs; a grown daughter with cancer living with her elderly mother, neither of whom were able to leave their home; and a parent living on disability who suddenly needed to support a son home from college.

Impact we’ve delivered through Shipt

60000+

60,000+

Household Items Provided

5800+

5,800+

Families Assisted

4

States Served

180+

Towns Included

Our Customers & Communities - 7

  • “I am very grateful to Nicor Gas for doing whatever they can to help people out during this time of need. Thank you for reaching out. Thank you for organizing this and I greatly appreciate this and please let the people at Nicor Gas know they are awesome to work with in customer service and all the way around.”

    – Chris
    Lakemore, Illinois

  • “I appreciate you all doing this for others. There are a lot of people that are in need right now.”

    – Mary
    Virginia Beach, Virginia

  • “Thank you so much! This is such a relief!”

    – Gina
    Chattanooga, Tennessee

  • “That would help me so much in this time of need since I have been impacted financially. The care package and help with reducing my gas and electric bill definitely helps since my children are home all day now due to pandemic.”

    – Gabriela
    La Grange, Illinois

  • “Keep doing good, you all are angels in disguise.”

    – Anthony
    Markham, Illinois

  • “It is amazing that you all are doing this at this time and helping those of us that are in need.”

    – Mark
    Cumming, Georgia

Our Customers & Communities - 8

Building upon our
charitable efforts

Each year, the Southern Company Gas Charitable Foundation donates millions to organizations that passionately work to improve the lives of the communities we serve. To date, we have given over $32 million in grants supporting 55 communities across the Southeast.

$1 Million to the Morehouse School of Medicine

Southern Company Gas donated $1 million to support Morehouse School of Medicine’s cutting-edge research and education model, which fosters greater inclusion in not only healthcare, but ultimately our entire society. This provides immediate support to an institution seeking valuable solutions and begins to help address critical health equity issues.

Additional charitable organizations we support

  • Meals on Wheels
  • American Red Cross
  • Salvation Army
  • United Way
  • Caring Place
  • March of Dimes
  • The Giving Kitchen
  • CDC Foundation
  • Home Health Aid Organizations
  • Operation Warm
  • Senior Assistance Organization
  • Posse Foundation

Our charitable focus

Environment

We support organizations that demonstrate environmental stewardship and work to preserve the earth for future generations.

Arts & Education

We believe the enrichment and education of our communities is the cornerstone of a thriving society.

Economic Development

We seek bold, modern ideas that improve quality of life and stimulate the economies of our communities.

Energy Assistance

We believe energy is critical to everyday life–and no one should go without it, especially when times are tough.

III. Our Innovation

Our Innovation - 1

Investing in technologies to make our product cleaner, safer and more reliable

jay sutton

“Our focus in operations is the intersection of innovation and safety. We are using everything at our disposal from a technology and resource standpoint to ensure we are safely delivering natural gas to our customers.”

– Jay Sutton

Senior Vice President and Chief Operations Officer

Southern Company Gas

One of the core tenets of our vision, Fuel for Life, is to invest in innovative solutions to improve our business, making it safer and more reliable for our customers and our communities.

To follow through on that commitment, we invested more than $1.7 billion–an average of more than $4 million a day–in 2020 to renew and reinforce our system.

Thanks to that investment, we have successfully removed all the cast iron pipe in our system, making our system tighter.

And we’re partnering with companies like Urbint, an artificial intelligence company, to use predictive analytics to pinpoint threats to our system ahead of time so we can better protect our lines from third-party damages. We are also extending this capability by building a model to address our crossbore risk and plan to keep evolving this technology for other workflows. Additionally, through the use of AI, we’re able to anticipate call volume and plan resources accordingly.

We’re also in the early stages of using drones outfitted with gas leak detection devices to safely locate potential hazards before they become dangerous.

By the numbers

99%+

Percentage of our 73,000-mile distribution system made up of modern materials

19%

Reduction in third-party damages at Chattanooga Gas Company due to predictive analytics

98.3%

Percentage of leak calls addressed in less than 60 minutes

Our Innovation - 2

Highlights of our 2020 impact

Fueling Possibilities with Natural Gas

Natural gas is a foundation fuel.It is the cleanest, most efficient fuel that can easily be brought to market and enhances the reliabilityand resiliency of the entire energy system

3.4 million jobs

We're connected to direct use of natural gas in 2018

37% Household Reduction in GHG Emissions

Households with natural gas versus all-electric appliances produce 37% lower greenhouse gas emissions

$879 Residential Savings per Year

Households that use natural gas for heating, cooking and clothes drying versus electricity save an average of $879 per year

177 Million

Americans rely on natural gas as a safe, affordable, reliable energy source

61% Reduction in C02 Emissions

Between 2005 and 2019, natural gas contributed to a 33% reduction in carbon dioxide emissions in the electric sector while helping the U.S. economy thrive

$450 Million Saved Over Four Years

Natural gas has saved residential customers $50 million over the past four years

5.3 Million

Commercial customers rely on natural gas to power their business

72% Decline in Methane Emissions

Since 1990, methane emissions from local distribution systems have declined 73%

Record Low Utility Bills for Commercial Customers

In 2020, commercial customers' utility bills reached a new low of $405 on average

Customer Service

Customer service statistics to be proud of:

3.9 Million

Customer Contact interactions

418,000

Total service appointments per year

10 Digital Billing and Payment Options

Serving all customer preferences

70% of Customers

Use a digital payment option

Net Zero and Sustainability

We have always been and continue to be leadersin sustainability Œ

Through pipeline infrastructure investments, our system is now nearly 99.9% efficient

RNG

We are developing ways to capture and utilize waste methane and have interconnection tariffs in place for RNG

Hydrogen

We are actively researching ways to integrate hydrogen with natural gas to reduce emissions

IV. Our Financials

Our Financials - 1 dan tucker

Dan Tucker

Chief Financial Officer, Southern Company Gas
(through December 31, 2020)

Among the many ways our company continues to demonstrate resiliency through challenging times is our strong financial performance. Navigating a year like 2020–with its multitude of impacts on our customers, our communities and our operations–was only made possible by the foundation laid with our state regulatory bodies over many years and by the culture of fiscal responsibility that exists with our employees. Here are some of our financial highlights.

We exceeded our 2020 financial goals

Our main financial goal for 2020, which is measured by Net Income, was to earn $542 million for the year. We far exceeded that goal by earning $562 million and, importantly, we did so while continuing to focus on our customers, providing support to impacted communities and maintaining momentum on our important safety and operational initiatives. Surpassing the 2020 earnings milestone is a direct reflection of our track record of predictable and sustainable financial results. We’ve grown our Net Income 9.3% since 2017, the first full year of our 50% investment in the Southern Natural Gas pipeline and first full year with Southern Company. Over that same time period, excluding earnings from businesses we no longer own, our earnings have grown 14.7%.

Mitigating the impact of COVID-19

In early 2020, we assessed the potential financial impacts of COVID-19.
We identified three major categories:

  • 1. Incremental operating costs to protect our employees and customers
  • 2. Actions to mitigate financial impacts on customers
  • 3. Economic downturn impacts

To counteract the potential negative impact on our company and customers, teams across Southern Company Gas quickly mobilized.

Our company and state regulators took actions to alleviate the financial burden on customers by suspending collections and late fees. Additionally, recognizing the uncertainty and potential hardship customers were facing, we chose to delay requests for rate changes in Virginia and Tennessee that were planned for early 2020. The economic downturn most acutely impacted commercial and industrial customers, many of whom experienced shutdowns or slowdowns in their businesses. Collectively, these pandemic-driven impacts were expected to significantly weigh on our financial performance.

We engaged with our state regulatory bodies to explore deferring many of the pandemic-related operating costs and lost fees for future recovery. Thanks to the robust regulatory frameworks and constructive relationships in our states, all of which had been developed over many years, we were successful in lessening a large portion of the impact.

For financial impacts that could not be addressed through regulatory solutions, each of our businesses and shared service organizations developed plans to reduce operating expenses. While identifying opportunities to reduce spending, our mission was to maintain our focus on safety, sustain our momentum on operational improvement initiatives, and continue providing excellent service to our customers. A revised spending plan was solidified and implemented in May 2020 and was successful in preserving our financial performance throughout the remainder of the year.

Planning ahead for 2021

As we look to 2021 and beyond, Southern Company Gas is well positioned to continue its strong financial performance. Our financial plan assumes new investment of $8 billion over the next five years, which is expected to support a growth rate of approximately 10%. A majority of this investment is driven by safety-related pipeline replacement programs. The remaining investments are a function of customer growth, technology and innovation initiatives, and our focus on a sustainable energy future.

Southern Company Gas maintains strong investment-grade credit ratings from all three of the major rating agencies, S&P, Moody’s and Fitch. These ratings are supported by our constructive regulatory jurisdictions, our low risk business mix, our strong management track record and, importantly, our solid and predictable financial results.

Our financial success in the years to come will continue to require the same disciplined approach to operational expenditures and a thoughtful regulatory strategy, which will be guided by the strength of the Southern Company team and frameworks in place.

David Poroch

Southern Company Gas Names David Poroch Executive Vice President and Chief Financial Officer

David’s new role at Southern Company Gas is to oversee the finance, accounting, business planning and risk management functions for all Southern Company Gas’s distribution, wholesale and retail businesses.

David began his career with Southern Company in 2012 as vice president and chief audit executive for Southern Company Services, and was most recently the executive vice president, CFO and treasurer at Georgia Power.

V. Our Employees Across Our Companies

Our Employees Across Our Companies - 1

Our Employees Across Our Companies – 1

Employee initiative milestones

At Southern Company Gas, we are committed to the safety and success of our more than 4,400 employees, and we continue to innovate the ways in which we engage with each other. Over the past few years, we have launched several initiatives to improve safety, facilitate employee engagement and strengthen our communication.

Connecting with FUEL mobile app

FUEL is our mobile application where employees can get company news and the information they need in real time. FUEL facilitates efficient, user-friendly access to two-way dialogue that traditional communication channels could not support.

By the end of 2020, more than 4,000 employees had downloaded the app since its launch in 2019. Engagement has been significant, with more than 1.2 million unique interactions across 37 channels. And the company received $5,000 in earned media value from employees sharing content from FUEL on their social platforms.

Anthony Oni

“FUEL keeps us connected to each other in real time. Our employees are more informed and more engaged than ever before — something that enabled us to rise to the challenges of COVID-19.”

-Anthony Oni

Vice President Corporate Communications

Southern Company Gas

Impact delivered through FUEL

phone

88%

of employees have downloaded the app

Retention Rate

92%

retention rate

interactions

1200000

1,200,000

unique interactions with FUEL content in 2020

Our Employees Across Our Companies - 2

Reinforcing safety processes and culture

At Southern Company Gas, our highest priority is, and always will be, ensuring the safety of our employees and everyone we come into contact with. We empower all employees to be safety leaders.

  • We practice Safety First.
  • We identify and mitigate critical risks.
  • We utilize stop work authority.

The Southern Company Gas safety strategy focuses on continuous improvement by implementing various safety and wellness programs that promote a safe work environment. The strategy encompasses critical risk management and being a learning organization with a foundation of compliance.

We are advancing our strong safety culture by utilizing human performance principles fostering employee engagement, driving event learnings, and implementing corrective actions to mitigate future injuries and incidents.

2020 brought unprecedented challenges for safety. We implemented new protocols for COVID-19 to protect our employees as well as our customers.

We will continue to be relentless in our safety efforts to keep our employees, customers, and community safe.

Strengthening diversity and inclusion initiatives

We established equity as a strategic pillar in our overall Diversity, Equity and Inclusion efforts. This helps ensure that all people are well represented, included and fairly treated within all levels of the organization and that every employee feels welcomed, valued and respected. Our efforts included the following:

Establishment of the Leadership Empowerment Acceptance and Diversity (LEAD) Council

The LEAD Council is made up of officers who represent our broad footprint. This council strategically supports and advances our enterprise D&I efforts, helping to create a culture that reflects our Total Commitment to our employees, communities and suppliers as stated in Our Values.

Advancement of Employee Resource Groups (ERGs)

ERGs are one of the best mechanisms we have for engaging our diverse talent on our inclusion. In the past five years, Southern Company Gas has expanded its ERGs from two to nine, representing six dimensions of diversity that exist in our workplace and community. In 2020, we launched ERG Leaders Intentional Development program, identified ERG Leader Competency Model, and trained leaders to use ERGs as development to further establish the ERG program. For our overall ERG program expansion and evolution, Southern Company Gas was recognized with a No. 8 ranking on the specialty list in Diversity Inc. and ranked No. 5 in the Talent Dimensions Diversity Impact Awards.

Increased employee engagement

Our 2020 Pulse survey showed a 92% overall Engagement Index, which is an improvement of 5% from 2018. Overall, our employees expressed satisfaction and pride in working for Southern Company Gas and plan to continue working at their operating company for a year or more.

Special mention was made by our employees on how well our company responded to COVID-19. They expressed their satisfaction with the company’s communication and our collective ability to adapt to changes in our work environment and duties.

Impact delivered through process improvement

noInjury

99%

Percentage of our employees who were able to work without sustaining a serious injury

lessInjury

38%

Reduction in work-related injuries

correctiveActions

130

Corrective actions taken from 70+ event learnings

Reinforcing safety processes and culture

At Southern Company Gas, our highest priority is, and always will be, ensuring the safety of our employees and everyone we come into contact with. We empower all employees to be safety leaders.

  • We practice Safety First.
  • We identify and mitigate critical risks.
  • We utilize stop work authority.

The Southern Company Gas safety strategy focuses on continuous improvement by implementing various safety and wellness programs that promote a safe work environment. The strategy encompasses critical risk management and being a learning organization with a foundation of compliance.

We are advancing our strong safety culture by utilizing human performance principles fostering employee engagement, driving event learnings, and implementing corrective actions to mitigate future injuries and incidents.

2020 brought unprecedented challenges for safety. We implemented new protocols for COVID-19 to protect our employees as well as our customers.

We will continue to be relentless in our safety efforts to keep our employees, customers, and community safe.

Strengthening diversity and inclusion initiatives

We established equity as a strategic pillar in our overall Diversity, Equity and Inclusion efforts. This helps ensure that all people are well represented, included and fairly treated within all levels of the organization and that every employee feels welcomed, valued and respected. Our efforts included the following:

Establishment of the Leadership Empowerment Acceptance and Diversity (LEAD) Council

The LEAD Council is made up of officers who represent our broad footprint. This council strategically supports and advances our enterprise D&I efforts, helping to create a culture that reflects our Total Commitment to our employees, communities and suppliers as stated in Our Values.

Advancement of Employee Resource Groups (ERGs)

ERGs are one of the best mechanisms we have for engaging our diverse talent on our inclusion. In the past five years, Southern Company Gas has expanded its ERGs from two to nine, representing six dimensions of diversity that exist in our workplace and community. In 2020, we launched ERG Leaders Intentional Development program, identified ERG Leader Competency Model, and trained leaders to use ERGs as development to further establish the ERG program. For our overall ERG program expansion and evolution, Southern Company Gas was recognized with a No. 8 ranking on the specialty list in Diversity Inc. and ranked No. 5 in the Talent Dimensions Diversity Impact Awards.

Increased employee engagement

Our 2020 Pulse survey showed a 92% overall Engagement Index, which is an improvement of 5% from 2018. Overall, our employees expressed satisfaction and pride in working for Southern Company Gas and plan to continue working at their operating company for a year or more.

Special mention was made by our employees on how well our company responded to COVID-19. They expressed their satisfaction with the company’s communication and our collective ability to adapt to changes in our work environment and duties.

noInjury

99%

Percentage of our employees who were able to work without sustaining a serious injury

lessInjury

38%

Reduction in work-related injuries

correctiveActions

130

Corrective actions taken from 70+ event learnings

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Our unified response to 2020 events

For many, COVID-19 has dramatically affected the ability to pay bills. Southern Company Gas utilities have been offering programs and tools to help customers take control of their energy bills. In addition, we made two important decisions early in the pandemic to ensure we were there for our customers:

First, Southern Company Gas voluntarily suspended service disconnections for customers who are unable to pay their utility bill. Secondly, we continue to serve all of our customers, even those confirmed or suspected to have COVID-19. The health and safety of our employees is our top priority so we have taken precautions to ensure their safety while providing reliable energy to those in need. In April, Atlanta Gas Light had its first known service activation for a customer known to have COVID-19. Atlanta Gas Light Vice President Jesse Killings was on site for the activation and joined employees from our Conyers Service Center with Tier III personal protective equipment and social distancing protocols to safely enter the customer’s home.

“These customers were in need of hot water,” said Region Director Nichole Miles-Sullivan. “Since we’re prepared for this with our new PPE protocols, we were ready to respond and carry out our duty to serve our customers when they needed us most.”

Anthony Oni

“I want our employees to see that I trust our processes and protective gear enough to put myself in their shoes. I would never ask our employees to do something I would not do myself, and it’s important right now for everyone to trust that we’re taking the right precautions."

-Jesse Killings

Senior Vice President, Customer Experience, Safety and Technical Training

Southern Company Gas (former Vice President, Atlanta Gas Light)

In May 2020, Southern Company released the Responsible Reentry Playbook that outlines a phased approach to returning to normal work conditions: Responsible, Measured and Flexible are the three principles.

Each of the communities we serve is different, so the reentry rollout will be different for each of our companies and based on marketplace data. The comprehensive playbook is available on Southern Company’s website. The actionable guidance ensures that each and every employee remains safe, healthy, confident and secure that we are doing everything we can to keep them that way.

Click here to learn more about our response to COVID-19

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Responding to racial injustice

We find ourselves in a critical and historic time. In the summer of 2020, racial tensions broke loose throughout the U.S. Protests against systemic racism and police brutality grew across the country, calling for racial justice, justice for the Black men whose lives were taken and equality for all Black people.

Southern Company Gas and its family of companies abhors racism in any form. As a company, we pledged to act. We redoubled our ongoing efforts to improve relations between all members of the communities where we live and work. Likewise, we are continuing bold and honest discussions within our company about all aspects of diversity, inclusion and acceptance.

Focusing Our Efforts on Four Ideas

  • We fully support those peacefully demonstrating, speaking out and protesting injustice and demanding change. We will not be distracted from the importance of that message by those who seek to inject violence and fear into the conversation.
  • We will fully engage in our local communities–our own, internal community in particular–across all levels and locations of our system.
  • We will not treat this as an event, but rather a long-term continuum of engagement centered on listening, learning and leading in order to achieve sustained institutional improvement.
  • We will leverage all forms of available resources to advance racial justice as well as inclusivity for all, regardless of their differences, while promising to incorporate past and present lessons to foster a society where all feel welcomed, valued, respected and engaged.

We will continue to engage our many employee councils, groups and organizations in renewed conversations for the purpose of better understanding the significant dimensions of diversity, race, social identity and acceptance. We will revisit these strategies to affirm they are working and, if needed, make the appropriate adjustments to do better.

The goal of our community engagement has been and always will be to make our communities better because we are there.

Click here to learn more about Fueling Equity

Doing better

By Kim Greene

Chairman, President and CEO, Southern Company Gas

Right now, we’re in a moment in history that is counting on us to be more intentional in our efforts to listen, learn and act. To do that, we must first take care of each other. As a company, we will further interact with you, community partners and thought leaders in an effort to mobilize an ongoing response to the racial tensions in America.

Over the summer, we began several initiatives, to promote dialogue within our company, including:

  • Employee forums
  • Sharing stories, webinars, announcements and resources on Pipeline
  • Dedicated FUEL channel, Conversations on Race, for employees to share messages, learning and experiences of racial equity
  • Launched Fueling Equity, which is committed to providing an employee experience that fosters equity and inclusion, and harnesses the diversity of talent to shape our culture and communities

Additionally, I sent a message to all honoring Juneteenth. This holiday commemorates the end of legalized slavery in the United States on June 19, 1865. I’m committed to ensuring that this moment in our American history is included in our company’s annual tradition.



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Southern Company Gas is taking a portfolio approach toward decarbonization, both in terms of the clean technologies we pursue and the value chain avenues we impact.

Infrastructure Modernization

Southern Company Gas has led the industry in making proactive system improvements to minimize methane emissions. Between 1998 and 2018, we invested more than $2.2 billion in pipeline infrastructure replacements. These system improvements have reduced annual methane emissions from our distribution system by 50%, even as the system has grown.

Future fuels as a path to Net Zero

Southern Company’s goal is to reduce its greenhouse gas emissions enterprise-wide by 50% from 2007 levels by 2030 and to make its operations net zero by 2050. This includes Southern Company Gas, where we are focused on reducing emissions from our own business and beyond.

Enabling an Economy-Wide Clean Future

Natural gas distribution companies can help facilitate an economy-wide net zero future. Natural gas utilities have played a critical role in reducing emissions for decades, and the enhanced efficient use of natural gas going forward can serve as a reliable energy carrier to both new and existing markets.

Over the past several decades, we have made significant progress to improve the sustainability of our system–and influenced others to make changes as well. Now, we are exploring a portfolio of opportunities to address climate change while providing even greater value to our customers and stakeholders.

Joanne Mello

“As a natural gas company, we are in a unique position to support our society achieving economy-wide net zero emissions. Looking to 2050 and beyond, our ongoing investment in research and development and innovative solutions will help us ensure that our net zero greenhouse gas emissions are implemented across the value chain and continue to meet customers’ needs and preferences.”

-Joanne Mello

Director of Sustainability and Energy Policy

Southern Company Gas

Next-Generation Natural Gas

We are a founding member of Our Nation’s Energy (ONE) Future–a coalition of natural gas companies working to achieve a rate of methane emissions across the entire natural gas supply chain of less than 1% of total production.

Virginia Natural Gas is also raising the bar on lowering emissions by aspiring to provide its customers with Next Generation Natural Gas that is sourced, transported and distributed by companies that pledge to reduce greenhouse gas emissions to less than 1% across the natural gas value chain.

Southern Company Gas also updated its natural gas bid selection process to offer a competitive edge to natural gas suppliers committed to greenhouse gas reductions.

Renewable Natural Gas (RNG) and Hydrogen

RNG is a sustainable and alternative source of natural gas created by capturing and utilizing fugitive methane from non-utility sources like landfills and agricultural waste, food processing waste, municipal waste and water treatment facilities. Hydrogen generates no carbon dioxide when it burns–just water vapor–which means there is tremendous potential to reduce end-use emissions by using hydrogen as a fuel.

We believe that there is tremendous opportunity to use our existing gas infrastructure to affordably support low-carbon fuels, with RNG today and the potential for hydrogen in the future.

Natural Gas Vehicles (NGVs)

Starting in the early 1990s, Atlanta Gas Light started a program to build stations for our customers, including the Metropolitan Atlanta Rapid Transit Authority (MARTA), who began purchasing buses that run on clean burning, compressed natural gas. Since 2012, Atlanta Gas Light has built $30 million worth of public and private compressed natural gas fueling stations. There are now 55 compressed natural gas fueling stations owned by Atlanta Gas Light and others across Georgia.

Customer Empowerment and Energy Efficiency

Empowering our customers to reduce their footprint is vitally important, as it has significant potential to reduce emissions. Southern Company Gas empowers its customers through a variety of programs offered through our subsidiaries. These include carbon offsets, energy efficiency and more.

Bryan Batson

“To achieve true net zero greenhouse gas emissions economy-wide, we must work together–and Southern Company Gas remains committed to the core principles of providing clean, safe, reliable, affordable energy to our customers, now and in the future.”

-Bryan Batson

Executive Vice President of External Affairs and Chief External and Public Affairs Officer

Southern Company Gas