Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Energy Gas Procurement topic
No spam. Unsubscribe anytime.
City of Perry approves another long-term discounted gas transaction with MGAG
Summary
The City of Perry agreed to participate in an additional 30-year, discounted natural-gas transaction offered by the Municipal Gas Authority of Georgia and Citibank, adding about 104 decatherms per day and bringing the city to its authorized 80% hedging target.
The City of Perry City Council voted on March 11 to authorize participation in one additional long-term discounted gas transaction offered through the Municipal Gas Authority of Georgia (MGAG) in partnership with Citibank.
Katie Hall, general manager and chief executive officer of Florida Gas Utility, told the council MGAG is offering a minimum discount of $0.65 per decatherm for the tranche under consideration. The proposed volume for the city would be 104 decatherms per day in the winter and would bring the city to roughly 80% of its average daily natural-gas use, Hall said.
The council’s vote followed Hall’s presentation detailing the structure and savings of these transactions. Hall said the deals run 30 years and repricing occurs every five to seven years; the city may step aside if a repricing produces a minimum discount below $0.23 per decatherm. She described the MGAG/Citibank offer as “by far” the city’s largest discount compared with earlier deals, which ranged between $0.29 and $0.47 per decatherm.
Hall provided figures on the city’s realized savings from these arrangements: she said current discounts yield roughly $7,500 per month under existing transactions, about $44,000 fiscal year to date and “almost $200,000 a year” since the deals were placed in flow. Councilmembers asked how the MGAG transaction interacts with the council’s existing hedging strategy; Hall said the discount layers on top of hedges, allowing the city to lock in price and obtain the discount simultaneously.
Councilmember votes recorded on the motion were unanimous in favor. The council did not record a mover or seconder in the transcript. The decision authorizes city staff and Florida Gas Utility to proceed under the board-set parameters Hall described.
The council’s approval continues the city’s multi-year participation in long-term discount transactions the utility has arranged for municipal members.
