AGL proposes statewide natural gas vehicle refueling network

Atlanta Gas Light Co. has proposed creating a network of compressed natural gas refueling stations throughout Georgia, which would eventually make the technology broadly available to small businesses and members of the public for the first time.

Macon is one of the locations outside metro Atlanta that the company has identified as a likely location. Currently, there are two compressed natural gas fueling locations in Middle Georgia, which are owned by the city of Macon and Robins Air Force Base and aren’t open to the public. The Macon station has allowed people from outside the city to top off at its station in the past, although there’s been no demand for it in the last year and a half, said Sam Hughley, Macon’s director of vehicle maintenance.

“I think we’re the only station between Atlanta and Florida,” said Hughley, who is also the president of the Middle Georgia Clean Cities Coalition.

AGL’s proposal

Atlanta Gas Light provided a conceptual plan to the state Public Service Commission last month, and hearings are planned for November and January before the PSC approves a fine-tuned version of the plan.

PSC Commissioner Doug Everett said he had been talking with Atlanta Gas Light about creating a CNG network for about a year, and he issued a public challenge to the company in July.

Everett explained why he sees a need for a company such as Atlanta Gas Light to drive the market: “It’s like the chicken or the egg,” he said. “Nobody wanted to buy CNG vehicles or manufacture them because there were no stations, and nobody wanted to build stations because there weren’t CNG vehicles.”

He noted that the recent discovery of large domestic natural gas reserves in shale formations and the development of methods to remove it economically make this the best time to convert to natural gas vehicles.

Atlanta Gas Light basically proposes to pay to install the refueling infrastructure and pumps at perhaps 20 locations, including 10 in metro Atlanta and 10 elsewhere in the state, and it would not increase rates to cover the cost.

According to the company’s plan, the first phase would likely consist of five to eight stations, with the first locations being at places a vehicle fleet agrees to purchase 20 percent of the natural gas sold. (Everett said he hopes 10 stations will be built in the first phase.)

The general public would also be able to purchase compressed natural gas at these stations, although they could be located either at a traditional gas station like a truck stop or on property owned by the fleet, Everett said.

It’s possible all the initial stations would be in Atlanta, since the infrastructure there for natural gas fuel is more developed, Everett said. But Ian Skelton, manager of business development for Atlanta Gas Light, said the company would like to locate stations throughout the state, particularly making a corridor along Interstate 75 and Interstate 95.

Skelton said the company would like to be part of a regional approach, but most federal funding is available on a state-by-state basis that makes creating regional corridors tougher.

So far, Middle Georgia’s alternative fleets have focused on crop-based alternative fuel such as biodiesel, said Charise Stephens, executive director of the Middle Georgia Clean Cities Coalition.

“Atlanta has more CNG, and south Georgia has more biodiesel,” she said. “We’re in the perfect position in the middle to be the best of both worlds.”

Atlanta Gas Light listed fleets that have expressed interest in compressed natural gas vehicles, including Atlanta area and Augusta governments, the Georgia Port Authority, Emory University, and private companies such as AT&T and Cox Enterprises. These fleets would basically anchor the system, providing enough stability and income to justify building the new stations, the company’s proposal states. The net revenue from the retail sales would then be invested in building further stations.

The initial investment for the program would come from the company’s universal service fund, a financial cushion the company maintains from its investments and other sources that pays for service expansion. The fund now has $40 million in undedicated money. The company’s proposal estimates its cost for establishing each fueling station at $1 million to $1.6 million.

Encouraging natural gas vehicle use

Besides creating public infrastructure that would encourage investment in natural gas vehicles, the Atlanta Gas Light proposal also includes a leasing program that would allow small businesses or individual residents to rent small compressors that can be installed to supply the fuel at a home or business. The program would provide lease rebates for the first 500 participants, reducing the price to $25 to $50 a month.

Everett said there is no timeline set for even the first phase of the project, but that will be worked out during the hearing process. The first hearing is scheduled for Nov. 16, to coincide with a national meeting of an association of utility regulators. Everett said representatives from other states with networks for gas vehicles have been invited to share what worked for them.

Everett, who used to own a propane gas company, ran his vehicles on compressed natural gas as early as the 1960s. They required little maintenance and were cheaper to operate, he recalled. Now compressed natural gas is about half the price of unleaded gasoline, and it’s much cleaner.

But the investment up front is greater, Stephens noted. About seven years ago, the city of Macon owned about 60 compressed natural gas vehicles. It owns just six now, because the city has been unable to get a grant to help make it cheaper to replace them, Hughley said.

Congress is considering several bills that could encourage investment in natural gas vehicles, Skelton said.

Possible measures include extending a per-gallon tax credit for natural gas vehicle fuel, providing grants for installing new stations, giving tax credits or rebates for buying cars and trucks that run on compressed natural gas, and allowing state and local governments to finance gas vehicle projects with tax exempt bonds.

The Public Service Commission is expected to vote on a finalized proposal from Atlanta Gas Light sometime after a January hearing, Everett said.