Natural gas rates set in Carroll

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The county is setting itself up as a local utility service provider. Rates have been set for residential and commercial customers.

By Christopher Brooke, Reporter

HILLSVILLE — In a surge of activity on natural gas, Carroll officials continued to build up to the creation of a local utility service at their April 8 meeting.
With the expected completion of a connection to the Patriot pipeline this month, county officials held a public hearing and get natural gas rates, as well as scheduled a separate business and safety meeting for April 25.
“The Industrial Development Authority’s actually building out the line and the county would end up operating the line,” said County Administrator Gary Larrowe, introducing the subject. “The IDA cannot operate the line and the county cannot build the line — it’s a combination and a labor of love between the two organizations to actually make this happen.”

Carroll has been cooperating with Mohawk Industries to supply the plant with natural gas as a job retention effort.
Mohawk, Roanoke Gas, East Tennessee, contractors and others have assisted with the project.
“As part of this, the county has to adopt an ordinance on the value of the gas that would end up flowing through that line,” Larrowe said.  “Carroll County can end up setting their own rates, unlike other utilities — other gas company utilities they are actually under the jurisdiction of the [State Corporation Commission] and would have to actually go to the [State Corporation Commission] as a rate case; however, because we’re a locality we do not have to do that  — you can end up setting the rate.”
County officials have surveyed Roanoke Gas and other gas suppliers and marketers to determine what the rates should be for local natural gas, Larrowe continued. As a result, they came up with the four components that would together make up rates for residential, commercial and industrial customers.
County documents show, for example, that a residence paying for gas service would be charged $24 per meter per month, plus a distribution charge of 33.5 cents per therm, a local adjustment rider based on 5 percent of the total cost of service and a natural gas cost factored at 1.2.
The proposal also shows a residential connection fee of $1,250.
When it comes to the industrial service, county officials have built economic development incentives into the proposed rates.
“Carroll County reserves the rights to provide special rates for industrial customers for the purposes of capital investment, job creation, retention and economic development purposes, so there can end up being a special rate set as an incentive for businesses if they want to locate in the county,” Larrowe noted.
Special rates could also apply to industrial customers that have a constant demand for 100 or more therms and buy their own gas from another marketer with the intention of flowing that through the local distribution system, Larrowe said. This gas transportation rate would probably apply to Mohawk.
The gas service ordinance also contained various provisions needed for a utility, including late payment charges, reconnection charges, deposits and connection fee.
“Whenever we discuss the rate structure with several different companies what they all ended up saying is that you’ve got to start somewhere,” Larrowe told the board.
County officials don’t yet know what it’s going to take to recoup the cost of services, but they still need to get something in place to start taking advantage of the opportunities that natural gas will provide, he continued. If necessary, this rate structure can be adjusted in the future.
Supervisors’ Chairman David Hutchins asked Carroll Schools Superintendent Strader Blankenship, in the audience for a budget public hearing, if natural gas availability would help the school system save money.
Carroll County High School gets its heat from coal, so Blankenship didn’t expect much savings there, but Hillsville Elementary shows potential for savings if the gas line can be extended there.
A cost analysis could shed some light on that, Hutchins said.
“It’s just something we can look at... natural gas is a lot cheaper than electricity...” the chairman said.
When Hutchins opened the public hearing, no one in the audience wanted to speak.
Will changing the rates for economic development purposes require a board motion? Supervisor Josh Hendrick asked.
The board would readopt the ordinance, similar to the Public Service Authority changing water or sewer rates, Larrowe answered.
Will natural gas also be like water and sewer, in that there will be a minimum monthly charge — even in the summer months when a home or business wouldn’t need any gas to heat with? Hendrick asked.
The proposal includes a seasonal turn on and off fee for people who will want to cut on their gas to heat with in fall and turn it back off in spring, the county administrator said. Each would be $30.
Supervisor Tom Littrell wanted to know what a household would need in terms of therms.
A home might use 200 therms in a year, Larrowe said. Mohawk may use 100 therms a day.
So 200 therms is not a huge amount, it sounded like to Littrell.
Supervisor Phil McCraw made a motion to adopt the natural gas ordinance.
The motion was approved unanimously after a second by Littrell.
Restauranteur Brian Spencer offered a comment in citizens’ time about the natural gas rates and availability.
The rates seemed comparable to those Spencer pays for the Shoney’s restaurant in Wytheville that he manages, he said. He hopes natural gas will become available at the Interstate 77-U.S. 58 interchange in Hillsville as soon as possible. He also operates a Shoney’s there.
“I know as soon as y’all can get lines towards the interstate, I could imagine that every restaurant that is there will probably want to sign up, and hotels,” Spencer said. “It would save us significantly, a good amount of money.”
He knows that county officials want to attract new businesses, but the effort would help existing ones, too.
“It really would help with the struggling times, because our electricity rates, electric bills, are huge,” Spencer said. “I’m paying over $5,000 a month now just in Hillsville  — just something to think about.”

Carroll to hold natural gas public awareness meeting

Carroll County officials will hold a natural gas public awareness meeting April 25 to discuss both opportunities and safety measures.
The meeting has been scheduled for the board of supervisors meeting room in the Carroll County Governmental Center at 6 p.m.
“This meeting will be held to discuss the route of the newly installed natural gas pipeline, future opportunities for community members for both commercial and residential customers and to address any safety concerns,” according to information from Carroll. “After the presentation, representatives from the Carroll County Gas Utility will be available to take comments and answer questions.”
Residents are encouraged to call Miss Utility at 811 before digging to avoid the possibility of disrupting a gas pipeline.
For more information, call Carroll County at (276) 730-3001.