Mr. Vincent A. Parisi, Gas Natural's Vice President and General Counsel, added, "It is interesting to note that the order specifically states that 'the findings of Rehmann were noteworthy in part, because all of the issues identified with respect to the operations and management of the Companies, took place during the time Richard Osborne was CEO and chairman of the board of directors of the Companies.' Since new management and our new Board of Directors have governed Gas Natural, we have made great strides."
Since the 2013 PUCO order, many actions have been taken to properly organize and operate Gas Natural.
- Established stronger internal controls and procedures: An independent audit firm was retained to assist in the establishment of processes, procedures and documentation for effective processing of transactional data, informed decision-making, required checks and balances, and sound corporate governance. This included changes in personnel.
- Eliminated related party transactions: Prior relationships were unwound, other than those contractually obligated or necessary to serve customers, and additional practices for engaging with independent third parties were established.
- Established transparent relationships with all regulatory agencies: Communications and reporting with regulatory agencies have measurably improved.
- Segregated corporate offices from utilities offices: To maintain appropriate segregation of duties, as required under the PUCO Order, corporate staff was moved to offices which are separate from the Ohio utilities.
- Established position of internal auditor: A new position of internal auditor has been established and is in the process of being filled. The internal auditor will report directly to the Audit Committee of the Board of Directors.
- Disposed of resource-consuming assets and directed resources toward core earning assets: The Company sold certain assets and operations in Wyoming, Kentucky, Pennsylvania and Ohio and generated nearly $20 million in cash from the divestitures.
- Proposed reorganization and financing structure to regulators: Proposed financing structure that simplifies the balance sheet structure and provides greater financial flexibility. The financing arrangement supports the proposed reorganization of the Company, further separating regulated and non-regulated operations in accordance with best practices.
- Implemented a new enterprise resource planning system: Provides the information technology infrastructure needed to create efficiencies, drive repeatable processes and enable scalability both organically and through acquisitions.
Mr. Gregory Osborne concluded, "This order shows that we have made great progress since new management has taken over, as we addressed challenges created by historic behavior and several lawsuits associated with past management. We are intent upon being transparent in our efforts to facilitate understanding of the significant changes we continue to make within our organization, as we strive to become a benchmark utility."
About Gas Natural Inc.
Gas Natural Inc., a holding company, distributes and sells natural gas to residential, commercial, and industrial customers. It distributes approximately 21 billion cubic feet of natural gas to roughly 68,000 customers through regulated utilities operating in Montana, Ohio, Maine and North Carolina. The Company's other operations include interstate pipeline, natural gas production, and natural gas marketing. The Company's Montana public utility was originally incorporated in 1909. Its strategy for growth is to expand throughput in its markets, while looking for acquisitions that are either adjacent to its existing utilities or in under-served markets. Further information is available on the company's website at www.egas.net.
Safe Harbor Regarding Forward-Looking Statements
The Company is including the following cautionary statement in this release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Gas Natural Inc. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," "believes" and similar expressions. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Factors that may affect forward-looking statements and the Company's business generally include, but are not limited to the Company's ability to consummate the corporate reorganization and debt refinancing on terms that are acceptable to the Company, or at all; the Company's ability to successfully integrate the operations of the companies it has acquired and consummate additional acquisitions; the Company's continued ability to make or increase dividend payments; the Company's ability to implement its business plan, grow earnings and improve returns on investment; fluctuating energy commodity prices; the possibility that regulators may not permit the Company to pass through all of its increased costs to its customers; changes in the utility regulatory environment; wholesale and retail competition; the Company's ability to satisfy its debt obligations, including compliance with financial covenants; weather conditions; litigation risks; and various other matters, many of which are beyond the Company's control; the risk factors and cautionary statements made in the Company's public filings with the Securities and Exchange Commission; and other factors that the Company is currently unable to identify or quantify, but may exist in the future. Gas Natural Inc. expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Gas Natural Inc.'s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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SOURCE Gas Natural Inc.