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Elizabethtown Gas, a subsidiary of energy services holding company AGL Resources Inc. (GAS - Analyst Report), has got an approval from New Jersey Board of Public Utilities (BPU) to spend up to $115.0 million for accelerated infrastructure replacement (AIR) program.

Elizabethtown Gas will invest the amount over a period of four years, for improving the safety, integrity and reliability of its distribution business. Moreover, this program will support New Jersey State’s plan to tighten energy security and lower energy expenses by investing in natural gas infrastructure. Elizabethtown Gas will bear the cost initially and will file a rate case to cover up its construction expenses before Sep 1, 2016.    

The BPU sanction follows a similar infrastructure enhancement program achieved by Georgia-based Atlanta Gas Light Company – another affiliate of AGL Resources – two weeks back. As per that program, Georgia Public Service Commission (PSC) gave Atlanta Gas Light Company approval to invest roughly $275.0 million over a time span of four years for the replacement of vintage plastic pipes that spread over more than 750 miles.

The construction cost is expected to be initially financed by charging an extra 48 cents from customers up to Dec 2014. In Jan 2015 and Jan 2016 additional 48 cents and 49 cents will be charged, which is believed to continue till 2025.

Founded in 1856, Atlanta-based AGL Resources is an energy services holding company whose is principally involved in gas distribution. Through its seven utilities (Atlanta Gas Light, Chattanooga Gas, Elizabethtown Gas, Elkton Gas, Florida City Gas, Nicor Gas and Virginia Natural Gas) the company builds, manages and maintains intrastate natural gas pipelines, distribution facilities and peaking and storage facilities.

Primarily a gas distributor, AGL Resources’ earnings largely depend on weather patterns. Colder-than-normal temperatures could result in higher usage that may positively affect the company's financial results.

AGL Resources currently carries a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.

Apart from AGL Resources, one can consider other utility gas distributors like Atmos Energy Corp. (ATO - Snapshot Report), New Jersey Resources Corp. (NJR - Snapshot Report) and Piedmont Natural Gas Co. Inc. (PNY - Snapshot Report) as attractive investments. All the stocks sport a Zacks Rank #2 (Buy).

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