City officials have hired a consultant to determine whether it would be more feasible to own and operate a municipal gas system or to use commercial services when natural gas becomes available to the community.
Council members decided to hire a consultant because city officials lack expertise in the field, according to Mayor Keith Gillins. Sunrise Engineering of Fillmore was chosen over Energy Strategies Inc. of Salt Lake City to do the consultant work."Sunrise now has the experience needed after working with Nephi, the bid was less than that of Energy Strategies, and it is a local engineering firm," the mayor said. The contract will cost $3,000 - $500 less than the bid submitted by Energy Strategies.
Gillins said it will require about two weeks to draw up the contract and that the consultant work should be completed and a decision made by the council soon. "We may find that a municipal system will cost too much and we will consider the service of Mountain Fuel as well as our own system."
The mayor had suggested that Delta and Millard County join with Fillmore in exploring various gas systems and in negotiating a natural allotment for the area. He felt sharing costs would make it more economical, but the other entities apparently had little interest in the proposal so the Fillmore Council decided to go it alone.
Officials in Nephi have been considering a municipally owned system.
The mayor said the Kern River Gas Transportation Co. has not said when natural gas might be available in Millard County. Construction of a transmission line that will carry natural gas from Wyoming to Southern California will be completed in a few months.
The line will cross Millard, Beaver and Juab, the only counties in south-central and southwestern Utah that do not have natural gas. It is anticipated the Kern River line will be tapped to provide the service.
The Wyoming California Pipeline Co. also planned to build a line but recently withdrew its proposal.
The 904-mile gas line being built by Kern River will cost $934 million. It is a joint venture of the Williams Companies Inc., and Tenneco Gas. Most of the line will be 36 inches in diameter with a capacity to carry 700 million cubic feet of gas per day.
Kern River officials say they expect to permanently employ about 75 people after the line is completed. Operations and the gas control center will be in Salt Lake City, but administrative offices will be in Houston. Compressor stations will be located in Fillmore, Muddy Creek, Wyo., and Goodsprings, Nev.
The project will be built in eight segments, ranging from 61 to 112 miles in length. The segments in southern Utah, Nevada and California are being built first. The northern half of the system will be constructed next summer and fall when the weather is drier and warmer.
Company officials have said communities along the line will get substantial economic benefits. About $178 million will be spent in wages, and the company will spend $27 million buying goods and services while construction is progressing in Utah. Contractors will need to buy another $6 million worth of materials.
The state will also get direct tax benefits. The project is expected to generate $14 million in state income taxes and about $2 million in sales taxes.
Through the long term, the pipeline and compressor stations are expected to pay an estimated average of $580,000 per year in property taxes to Utah counties through which the line runs.
While the gas will be used primarily for enhanced oil recovery in California, residents in Millard, Beaver and Juab counties have great interest in the project because it will provide them with natural gas for the first time.
In a related matter, it has been recommended by the county Planning and Zoning Commission that a conditional use permit be granted to Kern River to build a gas line through Millard County. The permit must be issued by the County Commission.
The Zoning Commission voiced concern about sanitation problems at temporary housing facilities that will be required for 400 pipeline workers, and is considering requiring the company to establish and maintain a campsite.