City staff seek council approval for Northwest Alabama gas contract and pipeline upgrades

City staff told the council work session they will ask the council next week to approve a natural gas contract with Northwest Alabama Gas District and to fund upgrades to the interconnect and distribution in two separate but related resolutions. A presenter identified as Gary said the city has maintained an existing connection with Northwest Alabama Gas District that was unused for several years after a larger Southern Natural Gas pipeline served the area but that growing regional demand has exhausted available pipeline capacity. "We're fortunate in the fact that we still have this connection area with Northwest Alabama Gas District," Gary said, adding that the city needs the connection as natural gas usage increases and as industries express interest in expanding. He said the new supply arrangement will be "about 5 times the cost of the current legacy rates that they're charging us now." Staff said resolution d (the companion work-order item) would fund refurbishing the physical interconnect where Northwest's system ties to the city's distribution near Cortland and the Champion entrance. Jimmy (staff) described the work as replacing piping and other components where "we're only like 50 feet apart between Northwest and our system" and said the work would reconnect the two systems for operational supply. Separately, staff recommended approval of a professional-services expenditure for P. Wright McAnally to design and permit roughly 6,800 feet of new natural gas main in the Burning Tree area off Red Bank Road, closing currently dead-end lines to create a looped system. The project scope includes engineering and design, topographic and utility surveying, and permitting, including U.S. Fish and Wildlife and ADEM permitting, and staff said it would be funded from the Natural Gas Enhancement Fund. All items were presented as resolutions on next week's agenda; no formal votes were recorded at the work session. If approved, staff said the contract and upgrade work are intended to provide additional firm supply and reduce service risk on dead-end lines as the city's gas demand grows. The presenters did not provide a finalized contract rate schedule at the work session; staff flagged that the new cost structure will be materially higher than historical legacy rates.