ALBANY, Ga. -- The Board of Albany Water, Gas & Light Commissioners unanimously approved a measure Thursday that would allow its staff to enter into an agreement to purchase $1.8 million worth of power from natural gas sources.
WG&L is currently lacking natural gas in its energy portfolio, which comprises 40 percent power from coal plants, 40 percent power from nuclear plants and 20 percent power from hydroelectric dams, Fiscal Affairs Director Jon Vansant III told commissioners.
The deal as presented would allow WG&L to purchase $1.8 million worth of natural gas power from the city of Griffin at cost, which it will pay off over the next 30 months, Vansant said. WG&L would also have to assume roughly $5 million of the city's debt load on the power but would have until 2024 to pay that off.
Given the price of natural gas, Vansant said an evaluation of the deal done by the Municipal Electric Authority of Georgia, or MEAG, shows that if prices remain relatively stable over the next few years, WG&L stands to be able to reduce its power costs by between 8 and 10 percent.
The volatile market that once made natural gas a danger for investors has become more stable largely thanks to discoveries of large deposits of the gas and advancements in the technology used to reach it.
"Over the last couple of years, they've developed new techniques to extract natural gas from the ground, which has increased the supply of natural gas quite a bit. That has brought the cost of gas down, and costs have stayed low and reasonable over the last two years," Vansant said.
Vansant said that WG&L is constantly looking for ways to lessen its dependence on power from coal-based plants because federal environmental guidelines are driving up the costs for those companies to do business, which in turn pass the costs along to consumers.
Instead, alternatives like natural gas and nuclear energy, which are more environmentally friendly, are becoming the norm.
The purchase will allow WG&L, which has often failed to meet energy demands during the highest peak days, reduce its power shortage from 15 megawatts to 5 megawatts.
While WG&L officials say that diversifying their energy portfolio away from coal power will help reduce their energy costs by up to 10 percent, any significant reduction in electric rates likely won't come this year, as the utility works to grapple with a jump in its MEAG member fees, which spiked by $8 million this year alone.