Watertown Municipal Utilities, the largest municipal utility in South Dakota, is one of the northern-most members of APGA. Watertown’s location means they are among the coldest of all APGA members, having 8330 degree days in a normal winter, and a record of 9730 degree days in their coldest winter. They have a few aces up their sleeves in keeping their system delivering gas – without breaking the town’s budget – during their long October through April heating season.

The story of Watertown’s gas experience began in 1943, when the town purchased a private gas company that had been delivering manufactured coal gas from 1906-1943 due to dissatisfaction with the company’s service. The city had previously assumed control of their water system (in 1918) and electric utilities (in 1923) for similar reasons. The city converted the gas system to propane air in 1945, and then in 1956, when pipelines finally came to that part of the country, they tapped into those gas sources. All the utilities are consolidated under the Watertown Municipal Utilities, which is governed under a five member appointed board. They currently have 9140 gas customers, and are adding about 150 new gas customers a year.

Watertown is one of the few public gas systems in the enviable position of taking delivery from more than one pipeline, in their case from Northern Natural Gas and the Northern Border Pipeline Company. This allows them to buy from whichever pipeline has the best price.

Given the northern latitude, it might be expected for Watertown to have some operating challenges. However, this is not the case since the Watertown staff monitors the system closely. According to Geoff Heig, WMU’s general manager, one measure they have used in monitoring the system is outfitting 40 % of their meters with radio encoders. This speeds up the efficiency of meter reading by allowing employees to read for all three utilities with a radio receiver system “without having to wade up in waist deep snow.” This has worked so well Geoff expects to retrofit the entire system with these encoders in six years.

In 2004, Watertown purchased a $6 call option for its gas supply thru 2009 that allows it to avoid price spikes. Yet, the option also allows WMU to take advantage of prices if the market price goes down. According to Bert Magstadt, the assistant general manager of WMU and a former board member of APGA,“we will be extending out our gas call option, depending on the market, and continue to use futures and call options.” Watertown Municipal Utilities joined in APGA in 1992 to take advantage of the significant networking opportunities, which provides the opportunity to meet with people in other systems and get ideas about how to improve WMU’s operations.

Watertown also has a vested interest in the energy bill, especially the ethanol provisions. Since WMU delivers 1.4 Bcf a year- about half of its gas- to an ethanol plant, they would like to see continued federal support for the ethanol industry.

Finally, according to Bert, “we are very interested in the operations work provided by APGA on such issues as operator qualification, pipeline public awareness, making sure that there will be no mandatory requirement to install excess flow valves, and now distribution integrity management.”