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CAUD: Newton drops long fused firecrackers, if not bombshells

CAUD Commissioner proposes instituting more frequent, less steep rate increases; proposes CAUD investigate getting into natural gas distribution. GM Lenny Stone says that CAUD would like to acquire the City Gas Company. Mayor Hardwick says, at the moment, he knows of no need to sell gas department, no interest in merger. Mr. Stone cites Metcalfe County's pioneering Philip Smith for making his utility a role model for taking natural gas to rural areas. Mayor Hardwick says city will deliver natural gas wherever it is feasible.
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By Ed Waggener

One of the last items to be addressed at the Thursday, January 12, 2015 regular sessions of the Columbia/Adair Utilities District meeting was in two proposals by Commissioner Mike Newton.

The proposals, if not bombshells, are at least long fused firecrackers which in the realities of Adair County, are almost certain to draw outrage in some quarters, though both, sober minds would agree, should be seriously considered.

Mr. Newton proposed first, that CAUD address the need for more frequent rate increases, and secondly, that the utility seriously investigate going into the natural gas distribution business.

The study of the rate increase, if the past is prologue, is almost sure to draw criticism from a prevalent group in Adair County who hate any tax, any rate increase, regardless of need.

The idea of CAUD going into the gas distribution business may be seen as confrontational by those most closely associated with the City of Columbia, which now is the only real player in the natural gas distribution business.

Mr. Newton's rate increase proposal was, he said, and Mr. Stone confirmed, based on an earlier assurance CAUD had given ratepayers and the Adair County Fiscal Court to revisit rates more frequently and introduce smaller hikes, more often.

Mr. Stone acknowledged that it has been five years since a rate change was made.

Gas distribution idea backed by Adair County CJE Mike Stephens

Adair County Judge Executive Mike Stephens was at the meeting. When the vote was taken to pursue adding natural gas distribution to CAUD's services, GM Lenny Stone said that he recommended it, subject to Judge Stephens' backing. Mr. Newton moved that GM Stone investigate the feasibility of the proposal, and with a second by Commissioner Junior Brown, the CAUD board voted unanimously to proceed.

Judge Stephens said afterward that he believes extending natural gas on a more aggressive basis, and addressing the need for more sewer services in the county would be the biggest boost to economic development the county could make.

After the meeting, GM Lenny Stone said that it would be his wish that CAUD might acquire the City of Columbia Gas Department.

However, Mayor Curtis Hardwick said, in a telephone interview this morning, that as far as he knows, the City Gas Department is not for sale, and he said, at this time he knows of no interest to merge the City Gas Department with CAUD.

Mayor Hardwick said that while the City Gas Department is showing thin margins when depreciation is considered, the gas company is healthy when that non-cash expense is factored in. He said that he and Superintendent Ron Cook think that new contracts for lower cost gas, and a proposal being considered to sell gas on its heat value rather than volume, will both keep the City Gas Department in the black while still delivering a very competitive value to customers.

He said that the City Gas Department is considering every request for gas it receives. "But it has to work," he said. "It has to be feasible. There has to be enough demand to pay for the infrastructure in a reasonable time." Mayor Hardwick noted that he and Superintendent Cook are now exploring the feasibility of three lines: 1) To Coburg to Rob Wilkinson company installation needing a large amount of gas. "We're already in Cane Valley," he said, "So we only have to go a little over a mile or so for that one, and there are a large number of potential users along the way. 2) To the Burton Stone Company on KY 704, another large user. and 3) To A-1 Gate, 7 miles out on KY 206, where a large volume of natural gas would be used in manufacturing expansion.

"If it's feasible," Mayor Hardwick said, "We'll run gas anywhere we legally can - even to Cumberland County if they want it."

GM Stone says Metcalfe County utility is a model

GM Lenny Stone told the board, in recommending the initiative, that he remembers when Phillip Smith ran the Metcalfe County Utility System. "He was one of the smartest men ever in the business," Stone said. "When he would run a water line, he'd run a gas line at the same time. Then he would advertise $35 gas water heaters in the local paper. People would buy those, and then he had the customer base he needed. Metcalfe County still has a top water and gas company," he said.

Judge Stephens says that he was impelled to promote the county gas distribution because of its impact on jobs creation out in the county, and because he thinks the city is not aggressive enough in building new lines.

This story was posted on 2017-01-13 08:25:51
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