CLEVELAND, Jan. 28, 2015 /PRNewswire/ -- Gas Natural Inc. (NYSE MKT: EGAS) commented on the investigative audit which was conducted by Rehmann Corporate Investigative Services as required by the Public Utilities Commission of Ohio ("PUCO"). The report was filed with the PUCO on Friday, January 23, 2015. This investigative audit was required in the Opinion and Order issued by the PUCO on November 13, 2013 concerning Gas Natural's Ohio utilities and their affiliates and related entities. The audit was initiated on June 21, 2014. It focused on several specific areas, including the calculation of the gas cost recovery rate ("GCR"), gas supply management and retention, internal controls within the companies, corporate and management structure, and related party transactions.
While the examination focused primarily on past practices and procedures, it recognized changes initiated by Gas Natural's current leadership team. As anticipated, there are multiple recommendations cited within the audit report to ensure that the Company's utilities are operating in the best interests of its ratepayers going forward. While we are focused on the execution of our growth strategy, we recognize that a strong foundation is necessary to support our efforts. We have made, and are still making, significant internal changes to this organization to address the issues raised in the audit report as well as address additional opportunities to improve the operations of the Company. A few of the actions thus far include the following:
- Designing and implementing a complete system of internal controls and procedures. In 2014, we engaged Freed Maxick CPAs, P.C. to assist us with this process not only in our Ohio operations, but throughout our organization. In the last year, we have established a solid, well documented system to better ensure effective processing of transactional data, informed decision-making, required checks and balances, and sound corporate governance. This included changes in personnel. While a significant advancement over past practices within our Ohio utilities, there is still progress to be made in those operations.
- Eliminated related party transactions other than those contractually obligated. We have unwound prior relationships and established prudent practices with independent third parties going forward.
- Establishing transparent relationships with all regulatory bodies. We have increased communications with the PUCO Staff to ensure compliance with GCR filings.
- Segregating corporate offices from utilities offices. To maintain appropriate segregation of duties, as required under the PUCO Order, we have moved our corporate staff into offices separate from our Ohio utilities, having negotiated favorable lease arrangements in downtown Cleveland.
- Investigating establishment of an independent internal audit department. Such organization would report directly to the Audit Committee of our Board of Directors.
- Focusing on core assets. We have carefully assessed our portfolio and are divesting of assets that are not core to our growth plans so that such proceeds can be redeployed in the expansion of the business and better maximize shareholder value.
We are working to improve the operating structure of the organization to also improve efficiencies and earnings power. And, we are intent upon being transparent in our efforts to help in the understanding of the significant changes we are making within this organization. We expect our actions will release the untapped value inherent in this Company.
Gregory J. Osborne
President & Chief Executive Officer
A copy of the Rehmann report can be found at this link: http://dis.puc.state.oh.us/TiffToPDf/A1001001A15A23B51403F75695.pdf
About Gas Natural Inc.
Gas Natural Inc., a holding company, distributes and sells natural gas to end-use residential, commercial, and industrial customers. It distributes approximately 35 billion cubic feet of natural gas to approximately 67,000 customers through regulated utilities operating in Montana, Ohio, Pennsylvania, Maine, North Carolina and Kentucky. 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 the Maine and North Carolina markets, while looking for acquisitions that are either adjacent to its existing utilities or in under saturated markets.
Gas Natural Inc. regularly posts information on its 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 successfully integrate the operations of the companies it has recently acquired and consummate additional acquisitions, the Company's continued ability to make dividend payments, the Company's ability to implement its business plan, 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.
SOURCE Gas Natural Inc.