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Preliminary natural gas study findings discussed

By Staff | Jul 8, 2016

On Tuesday evening, representatives of Kadrmas, Lee & Jackson, Inc. and Northwest Gas met with the Rugby City Council to discuss preliminary findings of a feasibility study to bring natural gas to Rugby.

Doug Lee, of KLJ, said based on study findings that bringing gas via pipeline was not an economically viable option.

At an average cost of $49.55 per dekatherm, a pipeline would cost the city over $499,000 per month in expenses-including $451,000 a month in pipeline fees ($174,706.25 in operations and $276,293.75 in monthly payments)-or over $5.9 million per year. A liquid natural gas option would cost $111,225 per month, or over $1.3 million per year, at a rate of $11.03 per dekatherm. Gas conversion and delivery would cost over $673,000 per year. Storage and vaporization would cost $983,400, the cost of which would be spread at 5 percent interest through a 20-year amortization period. Equipment and shipping would cost over $1.35 million.

The study found there is interest in having natural gas, especially in commercial and industrial businesses, however there was more of a preference toward an investor-owned versus municipal utility.

Mike Gorham, of Northwest Gas, discussed how an investor-owned utility would work.

Rugby mayor Arland Geiszler said that if an investor-owned utility were the favored route, Public Service Commission regulations and legislation could be the first hurdle. Gorham said they spoke with the PSC once.

Ward 3 Councilman Joel Berg asked whether distribution can be expanded based on demand. Gorham said the system would lend itself to upgrades.

“I would be shocked if a pipeline doesn’t come through Rugby,” Gorham said.

Rugby Chamber of Commerce and Convention & Visitors Bureau executive director Shelley Block questioned what during the feasibility study led to Northwest Gas involvement, and expressed dismay at the amount of responses received so far. Preliminary findings noted 48 questionnaire responses received, and of the 48 only 18 were received with comments.

“Really we don’t have everyone’s input,” Block said.

Gorham said: “In our experience, (low response rates are) fairly typical.”

Lee said that voter apathy may have also played a part in the response rate.

“Natural gas in Rugby has been talked about for 25 years,” Lee said.

Comments in favor of natural gas included:

“Let’s get this done.”

“Let’s get this up and running.”

“About time.”

“This capital improvement would bring Rugby up to the 21st century fossil fuel standards for cleaner air requirements-Our commercial and residential community will benefit in the long run.”

Comments against included:

“This town is great the way it is. Quit trying to raise taxes and sales tax and other extra expenses to make it impossible to live here.”

“This is something we do not need!”

“We don’t need another expensive mess like we have with sewer, water and garbage.”

Lee said another packet of responses would be coming.

Ward 4 Councilwoman Sue Steinke asked what location in town would be suitable for a liquid natural gas plant. Lee said 2.5 to 5-acre space would be needed, and the industrial park would be an ideal spot.

WARD 2 VACANCY FILLED

The council accepted the appointment of Randy Fossum to the vacant Ward 2 council seat. The seat was previously held by Dave Bednarz, who retired in June.

Fossum was absent for the meeting.

OTHER ACTIONS

The council discussed abandoned houses and vehicles being parked on lawns in Ward 1. Ward 1 Councilman Bruce Allen Rheault expressed frustration with the lack of action on those issues. Ward 2 Councilman Gary Kraft questioned whether an organized system was in place regarding complaints being filed and handled.

Geiszler suggested to the ordinance committee to look into whether an ordinance would be needed for drones. The council received copies of an article in the June 14 edition in the Bottineau Courant that the Bottineau City Council approved a first reading of a drone ordinance.

The council accepted City Auditor Elizabeth Heisey’s resignation. In August, Heisey and family will head to the Houston, Texas, area.

The council approved a bid from Hardware Hank for a Toro Model 5000 Series Professional Gas EFI engine commercial mower with rear discharge for $9,758, as recommended by the Public Works committee at their June 22 meeting.

The council changed committee meeting times on the third Wednesday of each month.

The council accepted an engineering services agreement with Interstate Engineering for phase two of improvement projects at the Water Treatment Plant.

The council learned that the chip seal project for the city streets could start later this month.

The council tabled action on a petition to vacate and close 150 feet north and south of an alley between 609 3rd St SE and 615 3rd St SE. Petition signers Leah Lehman, Nathan Kunde, Amber Sattler and Mark Simonson alleged the partial alley serves no public purpose and does not service or connect to real estate that would be inaccessible by its closure. The council made a motion to table as it was unknown whether a water or sewer line goes through the alley.

The council approved the June meeting minutes, bills and financial statements, and the Municipal Judge’s report.

City council regular meetings are usually held at 7:30 p.m. on the first Monday of each month, however the meeting was held Tuesday night due to the July 4 holiday.

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