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City commits to engineering for natural gas station

COVINGTON -- The city of Covington is moving forward with plans to build a compressed natural gas fueling station.

On Monday, the City Council agreed to fund engineering on the project. Officials are considering locating the station on city-owned property across from Nisshinbo Drive on the east side of Ga. Highway 142.

"The estimate that we have for (engineering) the facility itself and the site work is approximately $30,000, per our consultant Wise Gas," said the city's grant writer, Randy Conner. "However, extensive engineering work will be required for Highway 142 because of the need for a deceleration lane and the desire to take into consideration GDOT's improvements to Highway 142 in the next five years. We plan to make our design compatible with the plans that GDOT has for highway improvements to avoid the negative impact on our site that those improvements may cause."

Engineering could be as much as $100,000 "because of the extensive engineering that will be required as we take into consideration our facility, and the new Covington Airport Terminal Building will be located at the Nisshinbo Drive and Highway 142 intersection. We need to make sure the area is designed properly to not only facilitate the proper development and easy access to these projects and Nisshinbo, but to also make the surrounding property more attractive to future industrial growth," he said.

The council reserved funds in the current budget to cover the expense of the engineering, Conner said.

The city is also considering conversion of a portion of its fleet to run on natural gas. Conner and Utilities Director Bill Meecham visited Snapping Shoals EMC recently to take a look at the company's natural gas fleet and watch vehicles being converted.

Snapping Shoals has used compressed natural gas since 1998 and currently has 25 vehicles that run on natural gas and is converting an additional 25. The cost to convert a lightweight vehicle to natural gas is about $8,200. Conner said the city could expect to recoup that cost once the vehicle has traveled about 50,000 miles.

It won't be long before more vehicles are capable of running on the cleaner, less expensive fuel, he said.

"I don't think it will be five years. It has become such a hot item, especially with the way fuel prices are going up," Conner said.

There is currently no federal grant money available to subsidize the cost of the project.

"I really don't see any hopes of any help from grants. There's just absolutely none. We've looked everywhere for it," Conner said.

A consultant with Wise Gas, a Florida-based company that provides consultation, fueling equipment and vehicle conversions to natural gas, previously told city officials that the city would need to invest about $1.9 million in equipment and site improvements to get the station up and running, with maintenance running about $80,000 a year.

Jeff Greene with Wise Gas said Covington is the ideal spot to open a compressed natural gas station, with its location along the I-20 corridor between Atlanta and the coast. Around 65,000 vehicles pass by Covington exits per day, including 18-wheelers with large fuel tanks that could utilize the station, he said.

"I think there is very substantial potential for additional revenue coming into the city down the road," Greene said.

If the station is used at full capacity of 2,000 to 3,000 gallons per day, the city could get $200,000 a month in revenue, Greene estimated.

After examining both the county and city fleets, Greene determined that the county has 86 vehicles and the city has 37 vehicles, for a total of 123 vehicles, that could be converted to run on natural gas. The county currently pays $338,000 in fuel costs, and the city spends $117,000 on those vehicles. Converting to compressed natural gas would reduce those totals to $236,00 for the county and $82,000 for the city, a yearly combined savings of $137,000, Greene said.

Natural gas typically runs about $1 cheaper at the pump. Sedan owners can save about $10 per fill-up, Greene said, adding that he runs through about 40 gallons of gas per week and saves about $60 per week.

The city could buy the gas even cheaper at the wholesale rate for its fleet.

Once more natural gas stations are in place, Conner predicted there will be more demand.

"When the fuel is there, then people will be interested in doing it. Right now, people are afraid because they've got that fuel anxiety. I'm going to travel out here, can I get back home?"

The Department of Energy has committed $300 million to building compressed natural gas stations throughout the country, according to the Wise Gas consultant, but right now most are being built on the West Coast.

Comments

John 2 years ago

Using the information presented in this article and a bit of information not included, it seems this undertaking does not make a lot of economical sense. Following is my rationale for making this comment: First of all, it appears to get this all going an initial investment of $3,008,600 is required. This total includes is $100,000 for engineering (site, etc) + $1,900,000 for equipment & site + $1,008,600 for conversion of 123 vehicles at a cost of $8200 each (this if all vehicle were in the "light duty" category, any vehicle that is larger than "light duty or equipped with a diesel engine would cost much more. For example, on a diesel engine the head design has to be changed to reduce the compression ration from 22:1 to say 10:1). Nonetheless, it takes over $3 million tax dollars to realize annual gross fuel savings of $137,000, which is reduced to a savings of only $57,000 after spending $80K in annual maintenance for the facility. Now I am going to assume that new employees would need to be hired & trained to run this facility - this is the info not provided in the article. Very conservatively, the annual cost of a new employee with benefits would add an additional $42K/year per employee. This would mean that only 1-1/2 employees could be hired to run it just to almost break even, any more than that it is a losing proposition. Certainly, if the long term goal is to sell to the I-20 traffic the facility would need to be manned beyond the 5 day, 40 hour work week but more like the hours of QT, Raceway, etc. Further the $137K annual fuel savings could not be realized for some period of time after the site is fully functional as: 1.) all 123 city & county vehicles could not be converted at the same time or near the same time; 2.) it would not be economically logical due to thee age of some equipment to have a $8200 fuel system conversion. 3.) once a vehicle is converted to CNG fuel the resale (via auction, wholesale or other method) value drops significantly. History is a good teacher, I recall in the mid to late 1970's "diesel" was the fuel fade for America which faced high prices and shortages. Heck diesel fuel was 25% cheaper than, diesel engines got better fuel economy and diesel were everywhere until GM came out with their diesel engine. Today, diesel engines still get better fuel economy than a comparable gas engine by about 26% better, but the cost/gallon for over the road diesel is about 20% higher than gasoline. Today's almost $4.00/gallon for gas will go down it has several times before. If I have missed something it wasn't included in this article.

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