FAIRBANK — The Fairbank City Council on Monday discussed a new ordinance for gas billing because the natural gas company that supplies the city, Northern Natural, aims to increase rates and is going through a rate case to do so.
Public Works Director Dave Ryan spoke with the city’s gas broker from Clayton Energy.
Northern Natural is asking for a dime increase to the base average, from 39 to 49 cents.
“It’s getting trimmed back but it’s still going to be an increase,” Ryan said. “Our pricing structure doesn’t have room for that kind of increase.”
The city adds 49 cents per CCF (hundred cubic feet) on top of the gas price, for residential use. Corn dryers are among the few that use enough gas for the next-lower pricing tier from the city, which only adds 40 cents a CCF.
The contact person at Clayton Energy proposed a formula that will make the city’s gas price fluctuate with the price of the commodity. Fairbank’s rate would be “the cost of gas” variable plus $3.50 an MCF (or thousand cubic feet, about 1 million BTUs).
“He’s done that by backing the math up to match the profit or loss that we’re currently achieving,” Ryan said.
“It makes it easier to understand when ratepayers call,” City Attorney Heather Prendergast said. “‘Why did my bill go up?’ ‘Cost of gas went up.’”
Ryan presented a sample resolution from Brooklyn, Iowa, for consideration a similar one, but was told the city may want to do an ordinance.