$23 Million Savings for Gas Customers
Monday, May 12, 2008
In an effort to bring more common sense business tactics to our City government, I have authorized Department of Public Utilities Director Chris Beschler to submit to Council a paper that will save natural gas customers at least $23.4 million over the next 13 years.
This proposal will benefit our natural gas customers because DPU passes through gas cost savings on a dollar for dollar basis and customers will see a direct benefit. In today’s world of rising energy costs, taking advantage of every option to save our citizens money helps their bottom line.
This arrangement will be made through a deal between the City and the Municipal Gas Authority of Georgia (MGAG), a Georgia not-for-profit joint action agency with extensive experience in the prepaid gas market. MGAG is offering the City a $.50 discount that will save gas customers approximately $1.8 million in gas costs per year for at least the next 13 years.
My proposal marks the first time that Richmond would participate in such a prepayment plan. City officials have been studying the concept of gas prepayment for several years and we see this as an excellent opportunity for citizens because of the sizeable discount.
Another advantage of this proposal is that there is no impact to the City’s debt capacity because MGAG, not the City, has issued bonds for this arrangement.
