Tri-City Ledger -

By Joe Thomas
Ledger Editor 

Century may need to have a sale

 

August 1, 2019



From the outside looking in, I think it is time for the town of Century to at least begin receiving proposals from companies that might be interested in purchasing the town's natural gas system.

I've read a lot of numbers tossed around about how the gas system is losing money so fast it can't count. I've heard reports where people are getting free gas because they don't get bills and hear reports about the town selling less natural gas than they are purchasing from their supplier.

I now hear the council is going to take water and sewer funds to prop up its gas system that's bleeding red ink.

I've got no problem with towns transferring money from one account to another when bills need to be paid. But I do remember back in the late 1980s and early 1990s the natural gas system was the 'cash cow' that kept other departments out of that red ink well.

If I were a Century resident who did not have natural gas, I'd be a little concerned that the town was going to use the money they collect from me on my water, sewer and garbage bill to subsidize those who are on natural gas. If water, sewer and garbage has that much money, cut my rates before giving it away to someone who uses natural gas when I don't.

Utilities should not only pay for themselves, they should make a profit. If it costs X to provide water to the people of Century, Flomaton, Jay or any other municipality, the town needs to collect X-plus. The same goes for garbage and sewer.

Several years ago, Flomaton was having problems with its natural gas system. If my memory is correct it wasn't as bad as the situation Century is in right now, but the 'cash cow' wasn't producing the cash it once was.

Part of Flomaton's problem was that it had a crumbling natural gas system. It had outdated meters, it had leaks in lines and it was a mess. Money was not set aside to deal with the maintenance needed on the system. It has a familiar ring to it when I hear about Century's problems. Flomaton couldn't expand its gas system to other areas because it couldn't take care of the lines within its town limits.

Flomaton made one of the best decisions I've ever seen when it sold its natural gas system to South Alabama Gas. I don't have the figures, but South Alabama Gas gave the town a lump sum of cash and now pays the town a franchise fee. Granted the fee isn't much, but what Flomaton doesn't have is the expense of repairing gas lines, replacing meters and making sure things are safe.

In other words, the liability issue was taken off Flomaton, it makes a little money and has none of the headaches of running a gas system.

It doesn't take a rocket scientist to know that a water leak is not nearly as dangerous as a natural gas leak.

What does Century have to lose by at least taking offers? I've already reached out to South Alabama Gas and they are willing to take a look. I'm sure other natural gas suppliers would take a look. They may come to Century, look over the books and the system and say 'thanks, but no thanks' but then again they may come in and say 'we'll pay you this for your gas system and pay this percentage in a franchise fee'.

The Century Town Council will then have the option to either accept the offer or decline the offer. It's really no different than selling a house or a car – when people make an offer, you get to decide whether or not to accept it.

Selling the natural gas department may not be the best thing for Century. In my opinion it was the best thing that could have happened to Flomaton.

The town of Century won't know if selling its natural gas system is a good thing until it reaches out and asks for quotes. The one thing you don't hear the Flomaton Town Council argue about is repairs and maintenance on a gas system. It simply sees the franchise fee paid by South Alabama Gas in the General Fund revenue account.

 
 

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