Last week’s cold snap was the best scenario Atlanta Gas Light could ask for to justify a $215 million pipeline expansion program that customers have just started paying for through a small monthly fee.
The company, which moves natural gas to 1.5 million customers throughout Georgia, had its first real-life “stress test” in more than a decade when temperatures plummeted to 5 degrees. During the snap consumers used more than twice the typical daily average for this time of year, company officials said.
AGL said pipeline improvements, contingency plans to use back-up natural gas supplies and close monitoring of the gas pressure in its system were key reasons why nearly all of those customers kept service last week.
“Everything we do … to simulate performance on our system is based around (record cold temperatures),” said Jay Sutton, senior vice president, operations services for Atlanta Gas Light’s parent, AGL Resources.
“We know we’re fine when it’s 50 degrees and 40 degrees and 30 degrees. We want to make sure we’re good when it’s 7 degrees like we saw (Tuesday).”
About 700 customers in the high-growth area of northern Gwinnett County told AGL they either had low natural gas pressure, leaving them without fully working furnaces or hot water heaters, or lost service during the two-day freeze, the company said. Those suburban areas are one region AGL has targeted to improve and expand its pipelines to stave off such outages in the future.
Another 100 customers throughout metro Atlanta also told the company they lost pressure or didn’t have service. Reasons ranged from an overloaded system to broken furnaces.
It could have been much worse, AGL said. A couple of years ago, the company started expanding and upgrading pipelines in Atlanta and north, into Cherokee, Cobb, north Fulton and Forsyth Counties, to ensure the new influx of residents and businesses had adequate natural gas supplies.
Without such upgrades nearly 100,000 of AGL’s customers were at risk to lose natural gas service during record cold days, the company said.
“You theoretically design your system. When you have a day like (Tuesday), you have a chance to match theory with actuality, and from that … we’ll be going back to make the changes and the improvements that need to be made,” said Bryan Batson, president of Atlanta Gas Light.
The improvements are the second phase of AGL’s 10-year pipeline upgrade program, called Strategic Infrastructure Development and Enhancement, or STRIDE. The work will include improving pipeline capacity to Coweta, Fayette, northern Forsyth, northern Gwinnett and Hall Counties.
Consumers started paying an additional 48 cents monthly surcharge this month for the work, as approved by the Georgia Public Service Commission.
AGL said it needs to continuously upgrade its pipelines to handle two issues. The first is bringing gas from its suppliers into Georgia and its cities. The second is making sure the pipes are in place to get the gas to customers on the coldest day of the year.
The company is responsible for making sure there’s enough pipeline capacity — space to move the gas — similar to ensuring that there’s enough room on a truck to hold packages or enough lanes on a highway for cars to move along freely. Gas marketers such as Georgia Natural Gas, Gas South or SCANA, sell the actual gas to consumers.
Customers pay for pipeline improvements through the base rate charges on their natural gas bills. During the warm summer months, those charges can outweigh the actual cost of natural gas used each month, which can be frustrating for consumers.
“You try to explain to customers that they are paying for the infrastructure,” said Chuck Eaton, PSC chairman. “It’s a question of how much redundancy you want built into the system, and that redundancy goes into rates.”
Most consumers likely will see bumps in their January gas bills because of the cold spell. Yet, with natural gas prices at historic lows, the impact is much less compared to five or 10 years ago.
AGL has spent more than $2 billion on pipelines in the past 15 years. This includes replacing old cast iron and bare steel pipe after a PSC investigation documented more than 20,000 leaks in Atlanta and the northern suburbs over a two-year period.
The STRIDE program began in 2009. The work included expanding and upgrading pipelines in Atlanta and north, into Cherokee, Cobb, north Fulton and Forsyth counties, to ensure the new influx of residents and businesses had adequate natural gas supplies.
“The thing that concerns me about a natural gas outage, it’s not just about finding an alternative place to stay for a few days … it’s a potential for pipes freezing and busting,” Eaton said. “And you’re talking about it being in the middle of winter, so you’ve got serious health concerns with that: people potentially freezing.”
AGL took other steps to ensure enough natural gas could get to customers during the cold snap. It asked large industrial customers, such as manufacturers, to turn off natural gas and use a back-up fuel such as propane or oil for a couple of days.
The company also fired up three liquefied natural gas operations in Cherokee County, Macon and Riverdale, and used those reserves.
“What happened (Tuesday) was great. It was like our Super Bowl,” Sutton of AGL said. “It validates everything we’ve been doing everything for the last four- to -five years to get ready for that day. ”
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