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Rugby officials hear proposal to bring natural gas to city, region

By Staff | Apr 22, 2010

Talk of bringing natural gas to Rugby has been off and on for years, but a recent proposal by a Bismarck engineering firm and a pipeline company has brought the issue front and center to city officials.

Representatives from Kadrmas Lee and Jackson, an engineering and surveying firm, and Major Pipeline LLC, of Grand Rapids, Michigan, met with members of the city council and Rugby Job Development Authority on April 21 to propose a plan to bring natural gas to Rugby for residential and commercial consumers.

Major Pipeline would finance, construct and own and operate a high pressure natural gas system, connecting to Alliance Pipeline’s natural gas line near Towner, and bringing refined gas to Rugby and potentially to the communities of Rolla, Rolette and Belcourt.

Each city or combination of cities would create a municipal natural gas utility, selling the product to signed-on residential and commercial consumers. It’s possible Rugby would serve as the hub, or major supplier to other cities in the regon.

The major benefit of a public utility, of course, is price as the utility would not fall under the same federal and state regulations of privately-owned utility companies.

Of course the discussion is still very preliminary, but city officials plan to discuss the proposal and consider the financing options at greater length next month.

Karla Harmel, city auditor-administrator, said there are some attractive financial options right now for the city to tap into, including federal stimulus funds, toward the multi-million dollar project.

Construction of the high pressure transmission system which would be funded by Major Pipeline is estimated at $12.5 million. The combined cost of the four municipal utility distribution systems is estimated at $6.4 million.

Harmel said project officials from Kadrmas Lee and Jackson and Major Pipeline will schedule public meetings in the future.

Natural gas service to Rugby and the north central region would likely open some doors toward additional light manufacturing business development. It would also be an attractive alternative heating source for existing businesses in the community as well as consumers.

Of course, bringing natural gas does create competition with other utility and fuel providers. The council will need to consider a number of factors before deciding whether to proceed with the project.

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