City Council on Tuesday approved a 15-year contract with a 4.09 percent interest rate through Bank of America for a $5.5 million bond that will pay for the 12.5-mile pipeline connection to Transcontinental Gas Pipeline, also known as Transco.
“That interest rate is lower than what we were originally anticipating,” City Manager Tom Hall said. “We were thinking it would probably be anywhere from 4.5 percent to 5 percent.”
The Kia Motors plant in West Point will increase the city’s current load of gas by 40 percent to 50 percent once in full production, LaGrange utilities director Patrick Bowie said.
LaGrange will provide gas to Kia under a joint agreement by the city and West Point. LaGrange’s current pipeline runs through Webb Road and the portion of land that was annexed into West Point before construction of the plant began. As part of the agreement, West Point provides water to LaGrange residents around Gabbettville.
The city signed a bilateral contractual agreement with Kia in the beginning of April concerning a connection linking LaGrange to a major natural gas pipeline in preparation for the plant’s start of full production later this year.
The contract ensures Kia will be responsible for any additional expenses related to gas.
The new connection will tie the city’s current line, which runs from West Point to Grantville, farther north through Coweta County to Transco.
It would offer two pipeline feeds to Grantville, Hogansville, La-Grange and West Point. Each city currently relies on only one pipeline and could possibly be out of gas for several days if the line was damaged, Hall said.
The city also signed an intergovernmental contract with Grant-ville in February that stated it will pay 3 percent of its actual receipts for sales of gas to customers within Grantville’s city limit or a fee of 3.74 cent per therm within its negotiated safety territory.
Transco is one of the nation’s most extensive pipelines, covering 10,500 miles from Texas to New York. The city’s current pipeline connects to Southern Natural Gas, or Sonat, a pipeline which covers 8,000 miles.
Kenneth Thompson can be reached at kethompson@ lagrangenews.com or at (706) 884-7311, Ext. 228.
Post a Comment
