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Cordele moves to explore joining Municipal Gas Authority and to buy summer gas to fill reserves
Summary
Following a presentation by the Municipal Gas Authority of Georgia, Cordele commissioners authorized staff to review contracts and begin stockpiling gas in June to fill winter reserves, after hearing advice that June prices (~$3/MMBtu) make summer purchases favorable.
Commissioners authorized staff on June 2 to review potential membership in the Municipal Gas Authority of Georgia and to begin purchasing natural gas this summer to refill storage ahead of winter.
Eric Broom, representing the Municipal Gas Authority of Georgia, told the commission the authority acts as a joint action agency for municipal gas systems and helps members maximize pipeline and storage assets and obtain economies of scale. He said Cordele’s current supplier contract ends in late September and that, if Cordele chooses to join, the practical membership date would be October 1 with a roughly 60-day notice to a current supplier.
On pricing and storage, Broom recommended taking advantage of current summer pricing to inject gas into salt-dome storage and avoid paying higher winter prices. He advised filling reserves in June and revisiting the purchase plan on July 1 because July prices can rise when power-sector demand increases.
City staff said the system typically uses about 126,000 MMBtu during the winter months; Cordele’s on-hand and prearranged storage left roughly a 60,000-MMBtu shortfall that the city needs to cover for winter. Commissioners voted to authorize starting purchases to build reserves and to have staff provide contract documents for legal review prior to any membership vote.
Next steps: the city will have its attorney and manager review MAG membership contracts and staff will return with legal and fiscal analyses and a recommended purchase schedule for June injections.
