Perry council votes to expand natural gas contract

The Perry City Council did something during its work session Monday it doesn’t often do. In fact, Mayor Jimmy Faircloth said it was rare and added he wasn’t sure if they had ever done it. The something was to take a vote.

The council voted unanimously to authorize a change in the level of firm contract service it will receive in conjunction with the Elba Express Expansion service. The city already had a contract to receive a daily quantity of 500 Decatherms of natural gas from the expansion. The vote was to increase it to 1,000.

Now here’s the kicker.

The expansion is not slated to come online until 2016. So, why was there a sense of urgency and the council feeling the need to vote on it?

“We’ve had some things come about in the last week that have really spurred this on,” said Rusty Hough of the Municipal Gas Authority.

In particular, he explained, was the fact “peaking” will not be allowed when 2016 comes around. Peaking, he explained, was when you went over your allocated allowance of natural gas, but continued to pull from the line.

“In the past,” he said, “you used to get calls (from the authority), ‘Hey, try to stay within your guidelines. Be a good steward.’ In 2012, 2013 those increased significantly. So they’re trying to keep members to stay within their contracts.

“If you go over, there are penalties (they can levy). Those can range from $10 a Decatherm to $20. It depends on the severity of the contract.”

Now times have changed.

“In 2013 to ’14,” he said, “there were no, ‘Hey, try to stay within your guidelines.’ Everything was a Type 3 OFO (Operational Flow Order) violation. It’s the first time since I’ve been doing this, and I’ve been in it for 15 years, they have been levying fines. And we anticipate they will continue to be levied for those that exceed their capacity.”

The driving factor(s) behind how and why things have changed, Hough explained, was the fact more and more industrial businesses over the years have switched from being “interruptible” customers to being “firm” customers. Interruptible, he explained, meant the customers were only on the line when they, the particular businesses, were at excess capacity. Firm means they are on there per their contract and what it allots.

The result has become: “There is no room on the pipe.” Using the illustration of a water pipe Hough said: “You can only get so much water out of it. When all are on the pipe, it cannot serve all.”

That also meant if Perry or another entity was over its quota, it was basically taking someone else’s gas (peaking). And that was indeed the case for the city at times, Hough said. On one particular day, he said the city subscribed to 650 and got 994. And, “if in affect you would have been in violation 16 of 21 days.”

The Elba contract, in particular the vote to increase the daily quantity from 500 to 1,000, should settle that. The immediate action – the vote – was to get ahead of the competition and the possibility other municipalities will also try to gain as much access as possible to the expansion and it too should run out of space.

So, that settles 2016 and beyond. But what happens in between, as in 2015? Good question and one brought up by Councilman Randall Walker (but obviously shared by all on the council)?

“Our operations and planning people, we’re working and digging and pulling our hair out right now trying to find options,” Hogue said. One option mentioned was the possibility of purchasing from other municipalities – it was noted there are 27 potentials in Perry’s crosshairs – and purchasing from them. That could/might bring with it the obvious: Higher costs.

“You also have three interruptibles that would have to be pulled offline,” he said. “You could pull those off, but we’re continually looking for other options.”

As far as additional costs for the Elba service, it was estimated at $55-$80 per customer annually.

It was also noted that Perry has the lowest natural gas prices in Central and East Georgia, and that trend would continue.

In other action from the council’s regular meeting on Tuesday, it voted to void the award of a zero turn mower – industrial grade – it had approved at its last regular meeting. It turns out, explained City Manager Lee Gilmour, the lowest bidder did not meet the city’s specifications. But, neither did any of the other bidders, he added, so the city voted to send it out for re-bid.

It did award two bids to LaKay Enterprises, Inc., of Fort Valley. Both were for sidewalks. One was for $140,025 and for those along Highway 41 North, Kings Chapel Road and Keith Drive. It also included ADA wheelchair ramps.

The other was for $41,126 and for those, including lighting, along Macon Road from Main to Carroll streets.

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