New Roachdale gas lines come at a cost

Thursday, June 21, 2012

ROACHDALE -- When the new natural gas lines are installed in Roachdale the town will receive a number of benefits, but savings to residents will not be one.

New technology and engineering in the lines will reduce the amount of gas that goes unaccounted.

Instead of having eight to 10 percent of the gas being untraced, that number will drop to closer to two percent.

This sunk cost will help save money, which means that the minimal hike in gas rates, announced at a special meeting of the Roachdale council on Monday, could have been worse.

Roachdale applied for a grant to fix the lines in town but after being denied it still went ahead with the project.

That meant funding it with a 39-year, $1.62 million loan with an extremely low 3.375 percent fixed interest rate.

"The only reason for the rate increase is for the debt interest in the bonds," CPA Patrick Callahan said. "We're trying to minimize the rate increase."

Town residents will likely not feel the effects of the new rates until winter, as most natural gas is used for heating.

A number of factors will play a role into the exact amount of each gas bill.

If the price of the gas itself goes down, for instance, that savings will be reflected with a lower rate on the bill.

This price tracking will allow the town to save on their purchase of the gas, and then charge town residents less.

Rate changes tend to fluctuate but Callahan, the town's CPA for the project, said his own recent tracking has shown the prices are currently low and may drop even further.

"You never make money on a tracking revenue, you adjust," Callahan said. "I don't have a crystal ball. I can't tell you where the rates are going to go."

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