BPW discusses feasibility of natural gas pipeline

Friday, April 12, 2002

Planning work continues on a proposed natural gas pipeline that would serve Marshall Municipal Utilities' growing gas demands.

Following a study of the city's electrical generation capacity, it was determined that within the next few years Marshall will need more electrical generators and the most viable fuel source for these generators is currently natural gas.

Getting sufficient gas flow for any new generator became MMU's next concern and General Manager Paul Jensen updated the MMU Board of Public Works on the progress of planning a new pipeline at the board's Wednesday meeting.

In recent months, the board contracted with the firm Barnes, Henry, Meisenheimer & Gende for engineering services in the project. To date, the firm has drafted a design agreement, the scope of which includes design, preparation of construction contract bidding documents, construction observation and inspection, and such other services as may be necessary, Jensen said.

The project is still in the planning stages and may not go forward, however. Because of the scope of the project, MMU is looking to Renewable Power of Missouri for assistance. Renewable Power plans to construct a 30-million gallon per year ethanol production facility near Highway 20, which would also benefit from an increased supply of natural gas.

Renewable Power representatives have expressed interest, but have not given any firm commitment to the project. Board of Public Works members instructed Jensen to continue to pursue an agreement.

"Everyone is assuming this and assuming that," board member Ron Porter said. "We need to get something nailed down."

Board President Mike Mills asked what the utilities' cost would be if it was decided that the project would not go forward. Jensen said the cost would depend on how much work had been done. Barnes, Henry, Meisenheimer & Gende have fixed the cost of their services at $16,000 for the predesign phase, $226,300 for the design phase, $22,000 for the bidding and negotiation phase and $48,500 for the construction phase.

In the event the project comes to fruition, MMU has requested lease-purchase application papers from the Missouri Association of Municipal Utilities. For now, MMU management is recommending the creation of a Natural Gas Department. Initially, the MMU Electric Department would fund the new department.

Cash flow would be sufficient to make interest payments only (at the rate investments would earn) until such time that gas usage expands, Jensen said. At that time the Natural Gas Department would be able to start repaying the Electric Department, he said.

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