By Angie Thompson, Senior Reporter
TIFTON — The Tifton City Council was advised Thursday afternoon to concentrate on selling natural gas to new customers, raising the rate it charges for natural gas to industrial customers and to decreasing the amount of money deducted from the natural gas fund to pay other city expenses. The suggestions came from Arthur Corbin, the president and CEO of the Municipal Gas Authority of Georgia. Corbin spoke to the council in an informational session held Thursday.
Corbin said the purpose of the MGA is to provide gas to Georgia municipalities at lower rates, and to help cities that sell natural gas determine how to budget the price they charge. Corbin said approximately 400 cities in Georgia provide natural gas, and that 230 have franchised with Atlanta Gas and Light to provide the fuel to customers. He said forefathers in 84 municipal systems in the state’s rural areas had the foresight to bring gas to rural areas and that “it was a good move.”
Corbin said natural gas is “a service that must be sold.”
“People don’t have to put in natural gas, and can go with electricity,” Corbin said. “You can’t overprice and put yourself out of business.”
The city hasn’t raised the price it charges to industrial customers for natural gas since 1986 or 1987. One of Corbin’s recommendations for the city’s 2010-2011 budget is to raise the rates it charges industrial customers by 5 percent. He said the increase was reasonable considering that the city hasn’t raised the rate for over 20 years, and that the cost to transport the fuel from Texas and Louisiana has risen over the years. He said the city’s industrial natural gas customers had “gotten a good value for many years.”
Figures included in Corbin’s presentation indicate the closing of industrial plants such as Shaw Industries and Chickasha, and the reduction in natural gas purchases by such industrial customers as Tifton Aluminum, now Tifton Extrusions, caused a reduction from 363,781 in gas volume sales units in 2004-2005 to 16,348 in 2008-2009. He also said the reduction in residential and commercial customers (from 257,998 in 2004-2005 to 209,494 in 2008-2009) is noteworthy. The total gas volume sale by the city was 1,024,681 in 2004-2005, and 419,802 in 2008-2009.
Corbin’s financial summary for the city’s natural gas department also indicated the department had a surplus of $109,043 for the year 2004-2005, and a deficit balance of $492,229 for the year 2008-2009. He said the reserve funds in the department’s budget have been depleted over the years because of the transfers of monies to other city funds. He said the gas fund needed to be balanced, and the reserves needed to be increased so as to provide for money needed in the future to replace pipes and make other needed repairs to the system.
Corbin did tell council members the future looked bright for the natural gas business. He said that electricity rates and oil and propane prices were predicted to increase in the coming years, and if the city concentrated on increasing its customer base for the fuel, it should be able to build up reserve funds for the department.
The city’s natural gas department was awarded the Marketing Excellence Award from the Municipal Gas Authority of Georgia in 2005, recognizing it as “an industry leader for responsible and conservative use of dollars to market natural gas to their service area.” In October 2004, a regional group of cities formed the South Georgia Natural Gas Consortium, consisting of Adel, Americus, Ashburn, Bainbridge, Douglas, Fitzgerald, Nashville, Quincy, Fla., Tifton and Vienna with the goal of increasing consumer awareness of the benefits of natural gas home heating, water heating and other economical natural gas home appliances.
By working together, the cities achieved significant cost savings over typical television advertising rates with three local cable television providers: CityNet, Mediacom and Comcast.
Natural gas commercials began airing in October on popular national channels Fox News, Home and Garden Television, The Weather Channel and Lifetime Movie Network. Since the inception of the advertising program, there have been three natural gas commercials produced.
Each city receives exposure at the end of the commercial enabling the consumer to identify and contact their local municipal natural gas provider.
To contact senior reporter Angie Thompson, call 382-4321.
