In the US State of Georgia the Public Service Commission (PSC) has approved investments of $11.57 million in compressed natural gas (CNG) fueling infrastructure for up to 10 stations that could be constructed over the next five years, based on the size of each station. The new CNG stations may be located throughout metro Atlanta and along major transportation corridors in the state depending on demand. Atlanta Gas Light (AGL), a natural gas distributor and subsidiary of AGL Resources, will provide a new CNG service under a PSC-approved rate to retail station owners. A portion of the proceeds from the program would also allow AGL to offer affordable low-cost leases of home refueling appliances to individuals that own CNG vehicles.
“Georgia is positioned geographically to be the hub for CNG fueling station expansion in the Southeast, and this new program will enable AGL to partner with private CNG investors to meet the region’s growing demand for CNG,” said Ian Skelton, Director of AGL’s natural gas vehicle program. “Fleet owners and vehicle manufacturers recognize the significant price advantage CNG holds over petroleum and now AGL will be ready to serve the market as these Georgia-based commercial and municipal fleets switch to CNG.” The average retail price for all grades of gasoline and diesel fuel has stayed above $3.50 per gallon for most of this year.
AGL proposed a plan several months ago that proposed utilization of the State’s Universal Service Funds (USF) to expand CNG infrastructure.
The USF was established in 1998: (1) To cover a portion of the uncollectible losses of marketers who serve poorly paying customers; and (2) To continue expansion of the distribution system into areas that are currently not served by natural gas. In March, the Georgia General Assembly gave expressed authorization for USF to be utilized for natural gas fueling infrastructure for motor vehicles.
The AGL program is designed to stimulate private investment in fleet vehicles and CNG stations by allowing AGL to invest in CNG equipment at each new station using proceeds from USF. Station costs can range from $600,000 to approximately $1.5 million to build.
In order to qualify for funding, applicants must demonstrate they can secure the real estate for the station, develop the site consistent with local zoning, fund 100 percent of the CNG station costs, and hold contracts with fleet customers to utilize what amounts to approximately 30 percent of a proposed station’s capacity.
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 would use the stations.
Public Access Stations will allow any CNG customer to obtain refueling services using fleet management cards or standard credit cards. Limited Access Stations can be set up to serve municipal, county, state or other governmental fleets where no public access is practical. Leases for home refueling appliances are estimated to cost customers approximately $50-$60 per month.
AGL will own and maintain the CNG equipment connected to its traditional natural gas distribution system and provide utility services to station owners. Transportation delivery charges and actual costs associated with operations and maintenance will be collected from the 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 appliances, constructing additional CNG facilities, and making replacing major components of the CNG equipment.
Contracts between AGL and potential CNG retailers will occur following a request for proposal (RFP) process that will begin early next year. The RFP process should last into the third quarter of 2012 with construction proceeding later in the year.
(This article primarily compiled using information from an AGL Resources, Inc. press release)
