County Commission Approves Natural Gas Agreement for 2024

In a recent County Commission Meeting, Commissioners deliberated on the Natural Gas Agreement for 2024. According to Kansas law, commercial customers have the option to procure natural gas from non-utility providers and have it delivered through the incumbent gas utility's lines, subject to a delivery fee, known as "gas transport." Typically, this arrangement is cost-effective for large natural gas users, while smaller businesses usually rely on traditional utility providers. Notably, various county government facilities, including the Sheriff’s Office, Senior Center, and Health Department, find it more economical to purchase natural gas directly from the market through a broker. For the past decade, the County has engaged with Symmetry Energy Solutions (Symmetry), formerly known as another entity due to corporate mergers.

In the fall of 2021, the County Commission formalized an agreement with Symmetry for the mentioned facilities, addressing issues arising from the Winter Storm Uri gas price spike. The current agreement, set to expire on December 31, 2023, involves Symmetry purchasing gas on the County's behalf at a monthly price determined by a gas industry publication, with additional delivery charges totaling 64.6 cents per million metric British thermal units (MMBtu). Symmetry has proposed a new agreement consolidating and reducing the delivery charge to 59 cents per MMBtu, with alternative terms offering even lower charges, potentially resulting in annual savings of $134 to $268.

Commissioners, during a Concept Discussion on November 21, expressed interest in exploring savings through gas transport compared to traditional utility services. Analysis over a 12-month period revealed that Symmetry's pricing averaged $3.34 per MMBtu, significantly lower than the Kansas Gas Service (KGS) average of $7.39.

While the Sheriff’s Office transitioned to gas transport, Symmetry assisted in negotiating with KGS to revert the old office back to traditional utility service due to anticipated reduced gas usage. Despite projections, actual usage may vary, prompting staff to recommend a one-year agreement for flexibility.

In considering fixed-price options, Symmetry proposes a fixed rate of $3.99 per MMBtu for 2024, potentially yielding cost savings. However, due to fluctuating prices, the fixed price will be disclosed on December 18. Staff recommends authorizing the County Administrator to execute the agreement via DocuSign if the price aligns with the quote presented to the Commission.

In response to Commissioner inquiries about other facilities, the Expo Center remains on KGS utility, while Road & Bridge, exceeding 800 MMBtu annually, could benefit from gas transport. However, a securitization fee imposed after Winter Storm Uri is a significant hurdle, leading staff to recommend postponing this decision.

In summary, the motion to approve two agreements with Symmetry for natural gas services, incorporating a mix of fixed and variable pricing, and to explore potential changes for Road & Bridge was approved unanimously, aiming to achieve modest savings in comparison to the budget assumptions for 2024.

The motion to approve to authorize the County Administrator to execute by DocuSign two agreements, to provide natural gas for the Sheriff’s Office, Senior Center and Health Department for the period January 1, 2024, through December 31, 2024, at first-of-the-month pricing through Symmetry but with 50% of anticipated volumes delivered at a fixed price so long as that price does not exceed by more than five percent the price quoted, and to direct staff to move the largest meter at Road & Bridge from the General Sales Transport Eligible rate to the General Sales Large Commercial rate, was approved 5-0.