We Won’t Pass Gas – Natural Gas !

Those of you who signed up earlier this year in regards to the natrual gas feasability study and have been  waiting to hear the findings of the United States Department of Agricultural’s review. It appears to be a NO GAS PASS.  After a couple of years of studies, meetings and finally a sign-up earlier in the year for the natural gas system, the findings have been delivered to Sharp County Judge Larry Brown.

Brown received a letter from the USDA June 11 citing the Preliminary Engineering Report (PER).  Included in the report were several concerns the USDA had regarding the system. Brown has said since the onset of the proposed project that he only wants it if it is economically feasible for the county.

The letter from the USDA said that the projected cost of the project would be $14 million. During the initial sign up period over 800 local residents paid their $100 required deposit to help the USDA determine an approximate number of users who would actually take part in the system. However, as promised, if deemed not feasible, these monies would be returned.

Many of the USDA’s numerous concerns regarding the project are listed below as addressed in the letter from Jeffery Spencer, area director for the USDA to Brown.

According to Jeffery Spencer, area director for the USDA, “The projected monthly minimum bill in the original projection was shown to be $23.  However, a minimum monthly bill per user just to meet the debt service payments and reserves would have to be around $82. In addition, a portion of the projected operation and maintenance (O&M) costs that must be met on a monthly basis would also need to be included in the monthly minimum bill. The total projected O&M costs in the PER is $32.23 per user. If $18 of the total projected O & M is added to the $82 mentioned above, the total monthly bill would have to be at least $100 per user,” Spencer said.

Further, Spencer’s explanation of the concerns stated that since 100 percent of the those who signed up initially would most likely not take the service immediately. This could be either because the system would not reach their home during the initial phase or for other reasons, a 90 percent number of customers from the original 830 was used, creating a minimum bill for residential users of $130 and $323 for 90 percent of the 83 commercial users who signed up for the proposed project.

In his letter to Brown, Spencer also addressed the fact that there was no information regarding the cost of butane or propane conversions for customers. He said customers might be required to purchase new appliances if theirs were not able to be converted. Other concerns included the additional financial burden on potential customers for the costs associated with converting transmission pipes that were not suitable for carrying the natural gas to the home or business.

Spencer also cited the fact that there has been no exact costs quoted for tapping the Ozark Transmission line, the main line that lies between Evening Shade and Cave City. That service would be required to bring the natural gas to Sharp County. Spencer noted that items such as land acquisition costs, system regulation, overpressure protection and or odorization facility costs should also be taken into consideration and were not.

Spencer concluded by stating, “At this stime, USDA-Rural Development staff does not encourage Sharp County to proceed with further processing of the application or obtaining a Financial Feasibility Study.”

Judge Brown said that for the time being “this option is not being explored any further”. He said he will be exploring other options, but at this time, it is obvious, “We can’t afford it now and be able to be competitive.”  Those who paid the $100 fee should be getting you money back sometime after July 2010.