Atlanta Gas Light won approval from state utility regulators Tuesday to build a network of compressed natural gas fueling stations across the state.
AGL, the state's largest natural gas company, wants to build between five and 10 stations in metro Atlanta and then add more statewide. The company will begin working on proposals for the CNG projects and hopes to sign contracts with private investors next spring or summer. Construction could start by the end of 2012.
AGL would use roughly $12 million of a public universal service fund to encourage private investors to build CNG fueling stations. The fund is 40 percent backed by money from its industrial customers, and in better times, money from the fund extends pipelines to areas where new homes and businesses are being built. Residential and commercial customers do not contribute to it as a part of their utility bills.
The Georgia Public Service Commission voted 4-1 to approve AGL's request, which went through several changes and debates since it was first proposed several months ago.
AGL will use 75 percent of the money for CNG stations that are accessible to large fleets that have a contract with the station as well as smaller fleets and individuals who drive CNG-fueled cars. The remaining money would be used for CNG stations limited to municipal buses and garbage companies that contract with local governments, said David Weaver, AGL's managing director for regulatory affairs.
PSC member Chuck Eaton praised the program but voted against it, saying it should not be open to so many customers until it's clear there are enough to support the market.
"We're trying to jump-start a market. Let's go for the high-volume users first," Eaton said at Tuesday's meeting.
Private investors have to ensure to AGL that they will have 30,000 gallons of natural gas -- about 30 percent of the annual capacity for a typical station -- under contract in the first year. This is different from a proposal that would have required a private investor to put up at least 50 percent of the money for the project.
Weaver said the earlier idea's intent was to show CNG station owners "are serious about developing the market," but now "focusing on revenue is a greater indication of success."
The investors would buy compressed natural gas from one of Georgia's 10 natural gas marketers and resell it for vehicles.
The private investors can buy out AGL's investment after five years. AGL will return that money to the universal service fund.
About 112,000 natural gas-fueled vehicles are on U.S. roads, according to Natural Gas Vehicles for America, a trade and lobbying group.
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