COVINGTON -- City officials continue to mull over their options for opening a compressed natural gas station.
Following a work session Monday night, officials will need to decide whether to partner with the Municipal Gas Authority of Georgia or to go it alone as far as funding the facility. There was a consensus to approach MGAG to find out more about what the terms of an agreement with the authority would require. MGAG has appropriated $5 million toward CNG infrastructure for member cities.
"Our next step is to prepare a proposal for the Municipal Gas Authority with the end goal of acquiring use of Authority funds for the construction of our facility," said Randy Conner, the city's financial coordinator. "The less capital we need to use in infrastructure, the more we will have to invest in the fleet. We are hopeful of reaching a mutually acceptable arrangement to make this happen."
The city could also go the route of a public/private partnership, but council members were more supportive of a partnership with MGAG or the city having full ownership.
The station will be located at the corner of City Pond Road and Alcovy Road, with the main entrance being on City Pond Road.
The cost of construction could range from $800,000 to $2.3 million, but will likely be close to $1.2 million, Conner said. There would also be an additional cost to convert certain city vehicles to run on compressed natural gas, at between $120,000 and $250,000, but Conner said that will likely never come into play because it would be cheaper to replace than convert those vehicles. A one-time cost of around $150,000 would cover the cost of improvements to the city's present maintenance facility.
"Because CNG is a vapor, different lighting and exhaust equipment is recommended for service bays that are used for the maintenance of the vehicles," Conner said.
CNG vehicles are much safer to own, operate and maintain than gasoline and diesel vehicles, Conner said. The facility will not need to be manned 24-7 but will be manned by gas department staff. The maintenance of the facility as estimated by the city's consultant, will be $18,000 per year, which is figured into the cost of fuel at the pump, Conner said. The city may need to add additional staff, but that staff member would have additional duties as well as the maintenance of the CNG equipment, he said.
The city has set aside more than $800,000 in the budget -- with $500,000 set aside from the sale of city gas facilities no longer in use -- so far for the project. Benefits of having a CNG station include reduction in the city's fleet expense; reduction in fuel cost and maintenance; and increase in utility profitability.
A consultant with Florida-based company Wise Gas previously told the council that Covington is an ideal spot to open a CNG 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.
Snapping Shoals EMC has a natural gas fueling station for its fleet, and pays $1.64 for the equivalent of a gallon of gasoline of CNG, Conner said. However, the city's cost could be less as the distributor, he said.
The Snapping Shoals figure is based on the total cost of operating their own facility and covers the cost of natural gas they purchase from Atlanta Gas Light and the repairs and maintenance cost of the facility itself, Conner said.
"Their numbers and ours are very similar and we appreciate their staff keeping such detailed records over the past 15 plus years on their facility. This give us a very clear picture of what it costs to maintain a facility," he said.
The city is also hoping to eventually service county and school system vehicles -- the three entities use 1.3 million gallons of gasoline each year.
Councilman Chris Smith, who has been a proponent of the city owning a CNG station since discussions began two years ago, said, "We have enough fuel for many generations to come as far as natural gas. I think the city is very smart to be forward thinking."
Councilman Keith Dalton said the demand is "going to explode from where we sit, between Atlanta and Athens and Augusta" and Conner noted that Covington is almost halfway between stations in Birmingham, Ala., and Columbia, S.C.