By Errol Castens
TOCCOPOLA – Public Service Commissioner Brandon Presley and local officials announced Wednesday that Pontotoc will extend city natural gas service to Toccopola residents.
The project will create some 10 miles of infrastructure and an estimated new 150 customers in the western part of Pontotoc County, Presley said, at an estimated cost of $900,000.
The service expansion for Pontotoc’s system comes as one remedy agreed to in a rate-adjustment case. After the city of Pontotoc had accumulated more than $3 million in excess revenues, a settlement agreement with the PSC allowed the city to keep a $1 million reserve fund while requiring a rate reduction tied to the wholesale cost of natural gas. Other provisions included spending about $1 million for expansion and another $1 million for radio-reading meters.
While the excess revenues reflected what the PSC decided were overcharges to its customers, Presley said state law makes no provision to return that money to ratepayers.
“The problem with refunding the money – you’ve got people who paid it who are no longer customers,” he said. Instead, he added, the system is required to reinvest in ways that serve present and future customers.
“I think this is a great thing. We’re getting natural gas service to new customers,” Presley said. “This gives them the chance to save money. We were able to reduce rates for everybody.”
As for the $6,000-per-connection cost of the expansion, he said Toccopola offered the most new customers in the shortest distance.
“When electricity was brought to customers, it cost more to get it into rural areas, too.”
Presley added that preliminary bids have come in under the $900,000 estimate.
Pontotoc Mayor Jeff Stafford said the new natural gas customers would enjoy nearly a four-to-one price advantage over current propane prices for the same number of BTUs (British Thermal Units, a standard measure of heat value).
“They don’t have to buy 100 gallons all at once, either, and pay cash up front,” he said. The expansion, he added, would be aimed for completion by August.
Pontotoc’s natural gas system supplies some 7,300 customers in Pontotoc and Union counties.
“We go from Toyota to Toccopola,” Stafford said.