Monday, May 16, 2011

Atlanta Gas Light Files Plan to Construct CNG Vehicle Fueling Stations

/PRNewswire/ -- With gasoline and diesel pump prices in Georgia hovering in the $4.00 range, Atlanta Gas Light (AGL) today (May 12) filed a plan with the Georgia Public Service Commission (PSC) to build a network of Compressed Natural Gas (CNG) fueling stations over the next five years in the metropolitan Atlanta region and along major transportation corridors in the state. The plan also includes low-cost equipment leasing options for home fueling stations. CNG retail prices are over a third less than that of petroleum - $2.19 per gallon of gas equivalent – as currently posted at Georgia retailers.

"Demand for CNG is growing in the United States, and Atlanta Gas Light is committed to attracting interest in this important new investment opportunity to Georgia," said Ian Skelton, director of Atlanta Gas Light's natural gas vehicle program. "Natural gas is abundant and clean, and the U.S. is estimated to have a one hundred year supply that is readily deliverable to Georgia. Fleet owners and vehicle manufacturers are beginning to recognize the significant price advantage CNG holds over petroleum at the pump and, as a result, demand for CNG should increase. Making CNG stations more prevalent and accessible makes sense for Georgia, for businesses and for consumers."

Under the plan to be considered by the PSC later this summer, AGL proposes to invest nearly $12 million dollars to stimulate private investment in the construction of approximately 10 to 15 fueling stations, depending on the size of the station and the level of private investment. The stations would be owned and operated by private retailers who must invest approximately 50 percent of the cost of the CNG station. Retailers would purchase natural gas from certificated marketers and resell it as CNG to the public. The initial station locations will be largely determined based on proximity to commercial fleet customers who contract for service.

The capital used to seed the market would be expended from the Universal Service Fund, which is funded from rates paid by industrial customers and proceeds shared by energy asset management firms. AGL annually requests funds from the USF for line extensions to serve new customers and new regions of the state. The recessed economy has stalled line extensions that normally would come with growth, leaving a temporary surplus in the fund that can be used to foster CNG growth.

Atlanta Gas Light will not sell CNG to the public nor participate in the commercial operation of the stations as part of this program. AGL will own and maintain the CNG equipment connected to its traditional natural gas distribution system, enabling USF dollars to be used to construct the CNG facilities. Atlanta Gas Light will collect transportation delivery charges and actual costs associated with operations and maintenance from retailers. Revenue collected from a separate equipment utilization fee will be placed in a reserve account to fund a portion of the cost of leasing home refueling stations, erecting additional CNG facilities, and making repairs and replacing the CNG equipment.

In order to qualify for funding, applicants must demonstrate financial resources sufficient to secure the real estate for the station, develop the site consistent with local zoning, fund at least 50 percent of the total CNG station costs, and produce contracts with fleet or end use customers that utilize no less than 15,000 gas equivalent gallons per year for five years. The 50 percent match requirement is reduced to 20 percent after the first year if there are sufficient funds remaining.

The plan is the product of months of market studies and public hearings followed by legislative action. After filing a conceptual plan last September at the urging of PSC Commissioner Doug Everett, two public hearings were held in November 2010 and January 2011 to refine the plan. In March, the Georgia General Assembly gave express authorization for USF funds to be utilized for natural gas fueling infrastructure for motor vehicles.

Construction and maintenance of CNG facilities is not new to Atlanta Gas Light. The company installed its first CNG pumps at a public station in downtown Atlanta in the early 1990's. In 1996, AGL began its service to MARTA (Metropolitan Atlanta Rapid Transit Authority) when the transportation agency converted its bus fleet to CNG in advance of Atlanta hosting the Summer Olympics. Currently, the company owns equipment located at 10 CNG stations operated by private fleets and located on customer-owned premises, including municipal transit agencies, and has installed numerous others. The company also provides maintenance services to about 40 additional fleet customers who own their own CNG stations.

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