Member System Profiles: South Alabama Gas

The South Alabama Gas story begins in the fall of 1963 when Evergreen, in Conecuh county and Monroeville in Monroe County, established the Conecuh-Monroe Counties Gas District. It relied on a 1951 Act of the Alabama Legislature that allows rural towns and counties to share ownership of a gas district. Since then, it has grown to serve three counties with natural gas and twelve counties in south Alabama with propane.

To reflect this growth, which represents approximately 13,700 customers, they changed its name in 2000 to South Alabama Gas. While they realize it is uncommon to provide both natural and propane gas to customers in the same service area, they do so by cross-training their employees in order to put in both types of gas service lines and install equipment.

According to Marketing Director Fred Kelley, “one thing that South Alabama Gas has found is that others could learn is it is particularly important to keep an “open door” when working with other utilities and emergency responders in your service area.” The utility had its transmission main broken, which required help from all local police, fire and other emergency personnel to rectify safely. “Getting to know the emergency responders personally, by having them over for company training and cook-outs, will assure you of a coordinated response team when emergencies arrive.”

Hurricane Ivan Damage- South Alabama Gas was relatively unscathed by this storm, while electric utilities were devestated.

The most recent emergency was the fury of Hurricane Ivan. “Our personnel were great and everyone went above and beyond the call of duty the morning after the storm when daylight broke, riding in our service area looking and listening for gas leaks,” Fred told Public Gas News. “While the electrical utilities lost most of its customers, we were fortunate to lose just a handful. Most of our losses were due to trees pulling service lines out of the ground. The utility received many compliments from customers who were able to take hot showers thanks to their gas water heaters.”

As with all APGA members, South Alabama Gas is dealing with the high gas prices. The utility assists by conducting continuing education programs for its customers that teach how to conserve gas. “Much in the same way you would advise someone to switch from a large SUV to a VW-Bug, we advise customers to take out those old inefficient heaters and purchase energy-wise gas appliances.“

According to Gerald Borden, General Manager and CEO (and former APGA Board Member) for South Alabama Gas, the utility originally joined APGA to take advantage of the insurance group. It has continued with APGA in order to have its voice heard in DC as well as being able to share information and working knowledge with other public gas systems around the country. Mr. Borden says that he “loves to see what other systems are doing on the operational side, so we don’t have to re-invent the wheel.” APGA membership also gives public gas a united voice in Washington when new regulations are proposed that could impact a utility’s operations and bottom line.

As for the future, South Alabama Gas believes the future of natural gas is going to rest on new exploration and the availability of new and expanded liquefied natural gas (LNG) terminals. Every day around the world millions of cubic feet of natural gas are flared off in gas producing countries. Mr. Borden and many of his APGA colleagues believe that the supply-side pressures on gas prices could be reduced if more LNG terminals were built. Public awareness about both sides of the LNG terminal issues could help local communities make better-informed decisions.

In addition, Gerald offers some other steps that could make a difference, but may be considered somewhat controversial. “There is no real shortage of gas – there are more drilling rigs in service now than ever before, as well as more gas in storage than there has been for years. There is no fundamental cause for these high prices. The cause of high natural gas prices appears to be the unregulated marketers who have a stranglehold on gas prices after the deregulation of the natural gas industry.”

“We have all the gas we need. Gas prices simply follow oil prices, allowing some gas producers to make making record profits. The market power is being manipulated to create artificial shortages to drive the price up. Re-regulation, or at least more governmental oversight of the industry, would be the best thing that could happen to the industry.”

“It is past time for the government to step in, because high energy prices are crippling the economy. These high prices continue to force industries to pack-up their jobs and leave the country. Those jobs will never come back. I saw a cartoon recently that sums up our situation: It showed a jogger running past a gas pump, and the hose was coiling around his legs like a snake. The caption was simply: ‘Everything runs on energy.’“

Originally in April 25, 2005 Public Gas News