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CNG, LNG Transport Stations Getting Boost

June 4, 2012
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AGL Resources' Atlanta Gas Light Co. said it has received qualified proposals from the city of Atlanta and seven commercial operators to build up to nine compressed natural gas (CNG) fueling stations throughout Georgia under a program authorized by regulators last year. The first station is slated to open in mid-2013.

The utility ratepayer-supported effort, for which Atlanta Gas released a request for proposals (RFP) in March, is one of a growing number of efforts around the country aimed at expanding the fueling infrastructure for natural gas vehicles (NGV), which has taken on growing interest among fleet operators with the continuing decline of domestic gas prices.

Over the next three months each of the potential station owners in Georgia will have to finalize contracts with fleet customers to meet minimum annual CNG purchase requirements at each proposed station, an Atlanta Gas spokesperson said. Retailers that are successful in fulfilling the post-RFP requirements are eligible to sign service agreements with the AGL utility and obtain CNG service under a rate approved by the Georgia Public Service Commission (PSC).

The proposed CNG fueling stations would be in metropolitan Atlanta, Macon, Savannah and Valdosta, with five planned for the metropolitan area, including two in Atlanta. They would all be part of the $11.57 million AGL utility plant authorized by the PSC. The utility would install the needed compression and storage equipment for the fueling station network.

Atlanta Gas President Steve Lindsey said the response to the RFP carries the potential to make CNG more accessible to citizens throughout the state. "The domestically abundant supply of natural gas makes it a great time to invest in CNG vehicles to save money, decrease dependence on foreign oil and reduce emissions."

In addition to the city of Atlanta, the potential CNG station owners are Horizon Fuels, Premier Transportation, FireSide Natural Gas, Mansfield Oil, Nopetro; Colonial Group Inc., and The Langdale Co.

Major gas industry players this year have launched some aggressive efforts to expand CNG and LNG infrastructure for transportation. At the Alternative Clean Transportation (ACT) Expo 2012 conference in Long Beach, CA, last month several industry executives noted that NGVs have become a full commercial sector and no longer is a " science project" (see NGI, May 21).

As an example, Sempra's Southern California Gas Co. (SoCalGas) utility has taken steps to expand NGV fueling options throughout its service area. "One of the core responsibilities [of our] NGV program is to assist customers in the construction of public and private stations throughout our service territory," said a spokesperson.

However, SoCalGas has drawn opposition from Seal Beach, CA-based Clean Energy Fuels Corp. for its proposal to provide gas utility pipeline extensions and upgrades. The gas utility also has a proposal pending at the California Public Utility Commission (CPUC) to establish a compression tariff that would make it easier for private- and public-sector organizations to establish commercial NGV fueling stations.

Clean Energy is alleging that the SoCalGas plan is anti-competitive. SoCalGas's filing late last year asked for a broad-based compression tariff to be established, and a CPUC regulatory judge has set hearings this month with a final decision not expected before the end of the year.

In the meantime, the utility informed the CPUC that it agreed to provide compression services to the Los Angeles Unified School District (LAUSD). The utility argues that this contract does not have to await the broader rate-setting case because it is with a government agency and is exempt from normal CPUC oversight.

Clean Energy Chairman Warren Mitchell, a retired former president of SoCalGas, and other executives met with CPUC officials in April and May, urging they reject the LAUSD proposal and the tariff. SoCalGas has reiterated that is "had a right to construct and own compression facilities for NGV refueling for 'government agencies' without prior commission authorization" because its only obligation was to notify the CPUC that it had entered into the LAUSD agreement.

In its original application, SoCalGas said it would not conduct activities on a customer's premises "beyond the point of the customer's receipt of compression service, and as a consequence, will neither own, operate or maintain facilities, or conduct business operations beyond the point of [compression] service delivery."

In March Clean Energy filed a motion with the CPUC asking for an investigation and an order to show cause why SoCalGas should not be enjoined from entering into compression services agreements without prior commission authorization. The CPUC's energy division subsequently suspended consideration of the advice letter on the grounds it required further staff review.

Anticipating continued growth in demand for NGV infrastructure, SoCalGas has committed to upgrading six of its public-access CNG stations by the end of 2014. "We are installing new or additional compressors and expanding fuel storage capacity at the stations," the spokesperson said. "We are seeing an increase in the volume of fuel and the number of transactions at [our] fueling stations."

In April, for example, SoCalGas fuel volume was 18% higher than March, and the number of transactions increased by 15%, the spokesperson said. "By the end of 2015, we will have also constructed two additional new public stations -- one in Lancaster, 40 miles north of downtown Los Angeles; and the other in Murrieta in the desert region east of Palm Springs, CA." It also plans to add 1,000 more NGVs to its utility fleet.

In other areas, CNG and LNG transportation activity is picking up in similar fashion. Houston-based Waste Management announced plans to expand its fleet of CNG-powered trucks by 35 vehicles and open a new CNG fueling station in Conroe, TX.

Dan Kirschner, executive director at the Northwest Gas Association (NGA), designated FortisBC, based in British Columbia (BC), as the regional leader in NGVs on both sides of the international border. Others, such as Avista, NW Natural and Puget Sound Energy, are still "working their way into the NGV sector," Kirschner said.

In May the BC government announced a program to encourage the adoption of natural gas for transportation and reduce greenhouse gas emissions, and FortisBC has been authorized to provide incentive funding to qualified heavy-duty fleet owners in BC. Customers do not have to use its fueling services, but for those who want it, the BC utility can provide fueling station service from its available network.

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