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Friday, May 6, 2016

Sharp County Natural Gas system closer to becoming reality

Friday, April 2, 2010

For many, the prospect of the area getting a natural gas pipeline has been a long time coming.

Following a March 22 meeting with Sharp County Judge Larry Brown and mayors of Highland, Cherokee Village and Hardy, as well as representative Jeff Spencer from the USDA, the organization who will fund the project if it is deemed financially feasible, and Stewart Nolan, an engineer with Crist Engineering, the company who performed the initial feasibility study, the results look very favorable for the new system finally becoming a reality.

Due to many acts of unkindness laid on the county by Mother Nature since the Delta Regional Authority awarded a grant to the county to conduct a natural gas feasibility study in 2007, the process has been very slow. After the study was completed by Crist Engineering from Little Rock, the company commissioned by the Delta Regional Authority to conduct the study, mayors of Highland, Ash Flat, Cherokee Village, Sidney, Hardy, Evening Shade and Sharp County Judge Larry Brown have all joined forces, and rallied to get a gas system for the county. The support of the community has been overwhelming and many of the meetings have had an extremely large turnout.

The project was put on the backburner due to the tornado, floods and ice storms in 2008. Late in 2008, Noland made a presentation to the Sharp County Quorum Court regarding the specifics of the possible project. Noland let the group know where the county was in regard to the project as well as what the road ahead entailed for the gas system to become a reality. Noland told of the advantage the county had due to funding available through the USDA in the form of a rural development loan to the county. The $30 million loan will be for 40 years with the first two years payments being deferred to allow the proposed system to be constructed and begin gathering revenue.

The proposed gas line would be the first county wide gas system in the state and would begin at an existing high pressure gas line near Evening Shade. Since, several meetings, including a town hall type meeting have been held at Highland to give the public time to ask questions and voice concerns regarding the proposed system.

In June 2009, a draft of a proposed user agreement was submitted to representatives with the USDA for their consideration. The proposed minimum charge of $40 became a major issue with locals and USDA also agreed the price should be lower.

Later in the year, the USDA requested the user agreement's be mailed with water bills by area water company's and required the user agreements be accompanies by the initial $100 deposit. Later in the year, it was determined a base bill of about $20 would be agreeable.

Since the user agreements have been mailed, more and more residents have come forward to sign up for the program which will undoubtedly provide the county with much needed economic stimulation, including both jobs and the ability to compete with neighboring counties for industry. The total count was 619 at the meeting with the mayors. This included all city halls in the city's interested, as well as numerous businesses. In Ash Flat, 55 residents and 13 businesses signed up, One resident in Calamine, 16 in Cave City including 8 chicken houses, 302 in Cherokee Village, including three fire stations and 11 business or civic organizations, 11 homes and the Evening Shade School in Evening Shade, 67 residents and 22 businesses in Hardy. In Highland, 45 residents, the schools and the Fire Department, 11 in Sidney, including two chicken houses, two in Smithville, one in Strawberry and one in Williford. March 29, the total number who had signed up was 639, according to Sharp County Judge Larry Brown.

Brown said Aaron Green, a student with the EAST program at Cave City is currently working very hard to get the addresses of those signed up on a map to create a visual representation of the possible gas system in respect to each city. This is a step required by the USDA to determine if the gas system will be cost effective, although both Spencer and Noland seemed to be very pleased with the numbers of resident's who have signed up. The deadline for sign up was extended until March 29, at which time, the county and cities could continue to take the user agreements, but the cost of sign up may go up. The map should be complete and ready for submission for the financial feasibility study in the early part of the week, with results coming back sometime in May, as both a USDA study and that of a third party auditor are required.

Numerous questions to representatives of both the USDA and Crist Engineering were posed during the meeting. Nolan, compared the gas system to a water system and encouraged as many people as possible in concentrated areas to sign up. He said that gives them a better chance that if they are not served in the initial phase, that they will be in future expansions of the proposed project. He said the project was designed to expand 50 percent from it's original construction. Noland referred to a system at Portia, saying that during the initial phase of that system's natural gas construction, not everyone signed up or was served, but now there are 100 percent on the system.

One concern voiced by residents of the area at previous meetings included the concern that if the county governed the system, assessments added to the initial cost could make the gas price expensive. Spencer said if the prices were not going to be competitive, the USDA would not fund the project. He further elaborated stating that there must be annual reports made to the USDA for review. He said the USDA only provides for operation costs, maintenance and building up reserves for expansion. During the first year of the proposed project, the county wide system will be required to submit quarterly reports to the USDA. He again, compared the project to that of a new water system.

Others were concerned with the cost of conversions. Spencer said when the project gets going, there are low income loans available at 1 percent interest for those 62 and older to assist with the cost of converting and even to redo heating and air units. He said when and if the project is deemed financially feasible, there will by community meetings about the available loans. He said the payment on these loans will be about $3 per $1,000 borrowed.

Another economic solution natural gas provides, according to representatives, is that many large trucks are converting to compressed natural gas, saving on gasoline prices. One person attending the meeting even brought up vehicle filling systems that are possible with natural gas.

Many advantages of natural gas over propane were also discussed including increased property values. Cherokee Village Mayor Lloyd Hefley discussed the fluctuation in the prices of liquified petroleum with the price of oil. Others discussed safety issues with propane being highly combustible because it is much heavier than natural gas, which has much less pressure and is lighter. One attendee discussed that propane companies will only deliver quantities of 100 gallons of gas at a time.

The main item to note in funding the project is that while the county stands to gain extreme economic advantages, time is of the essence in regard to signing up for the project, because Spencer said that the money would not always be there for the project. In September, it will be gone. He said while to many the initial cost may be overwhelming when compared to the actual number of people who have signed up. Noland said "I am incredibly impressed with the 619 and I am willing to bet my next paycheck by the time it starts up that number will double." He further stated, "I would be willing to move forward with this and continue with sign up." Noland said, "It is important to sign up early to be included in the feasibility study."

The county and city offices will continue to take user agreements even after the deadline of March 29, but after that date, the sign up fee may be subject to change."

Brown said, "I don't want this thing to go on if it's not financially feasible and if the cost isn't going to be competitive." Brown indicated that it would be great for the area, but assured attendees that he had the best interest of the county in mind when referring to the financial feasibility of the proposed project.

Representatives supporting the system from Evening Shade were also at the meeting. Evening Shade was late in mailing out their user agreements so those who fill these out will also be included in the numbers, although it is unclear if they will have their agreements turned in for the initial count to be included in the initial financial feasibility study.

Results are expected back from the financial feasibility study in May. If the system is deemed feasible, construction on the project could begin in the spring of 2011.

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user agreement is a binding contract and it is written like a blank check. they gave no information on what gas meter would cost. people did not want to sign the user agreement for that reason and not because they did not want the natural gas. just saying you want it sign if you don't, don't sign it is not much information.

-- Posted by kitty2 on Fri, Apr 2, 2010, at 9:22 PM

$40 a month base fee would be WAY too much.

So would twenty.

Propane costs $3 a month for tank rent.

Home heating season is only about 4 months a year.

As much as I'd love to have natural gas i just don't see how it can pay with our low population density.

-- Posted by oldjimh on Wed, Apr 7, 2010, at 6:07 PM

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