LITTLE ROCK — If all falls into place, Mayor Patrick Hays said he believes North Little Rock will be in business to run a publicly accessible, compressed natural-gas fueling station in five months, even while details are being completed on the fly.
North Little Rock is working toward having the $602,812 public fueling station operational by Jan. 1 for vehicles powered by compressed natural gas, referred to as CNG in the gas industry, Hays said this week. Aside from three city trucks being converted from diesel, it’s not known how many vehicles will use the station.
Three grants worth a halfmillion dollars are ready for the city’s acceptance to move the project along. The grants are to be recommended as separate resolutions to the City Council at its 7 p.m. meeting Monday.
Compressed natural gasis an alternative fuel that supporters say is less expensive and cleanerburning than oil-based fuels and is in abundant supply in theUnited States.
The city obtained deeds Friday, Hays said, to the planned location at the southwest corner of Curtis Sykes Drive and Olive Street. The City Council approved paying $32,750 for four properties there June 14.
“It has been a reasonably short fuse,” Hays said in an interview about the pace of his project. “I see no reason not to move forward with all reasonable prudence.”
However, Hays was still nailing down details Friday that might satisfy his promise last month to provide a busi-ness plan to the City Council - and the public - before asking for the project to be given a green light.
Among other factors, such a plan would outline costs and revenue projections for the city, or whether the city even intends to try to make back its own initial investment of $102,812 to fire up the station.
“We’re not in the business to make money on this, but we’d like to be revenue-neutral on the city’s costs for the operation,” Hays said. “And do we want to try to recover the city’s investment? There are some [questions] out there that need to be resolved.”
Hays said it’s still undetermined how much of a markup the city would impose on its sales. The city would buy the natural gas from Center-Point Energy at a negotiated wholesale rate “substantially less than the cost of a per-gallon equivalent of gasoline,” hesaid.
It’s also unknown how many CNG-fueled vehicles - though likely very few - are in central Arkansas. North Little Rock’s station would be the only public CNG station in Arkansas, Hays said.
North Little Rock is paying $52,125 to convert the three city trucks, Hays said. The bulk of the money is coming from a $156,000 federal grant.
The city has also had discussions with “some folks,” Hays said, about other private or government fleets using CNG vehicles that would refuel at the cityowned station.
“There are some things we’ll need to ramp up in pretty short order before we open our doors,” Hays said.
One setback, Hays said Friday, has come up because requests for qualifications received from engineering firms this week to oversee the station’s construction weren’t accepted by the city. None had any experience with building a CNG fueling station.
“We received three responses, and we didn’t feel like the qualifications and the experience were there,” said Joe Smith, the city’s Commerce and Governmental Affairs director, whose office oversees bid processes. “We are thinking the best way to go in this particular situation is to hire a construction manager who’s built these.
“We’re hurriedly writing up new specifications,” Smith added. “We just don’t have anybody in our pool of construction managers who would qualify.”
The planned 24-hour, selfservice station won’t need to pay for staffing or on-site security, Hays said, though decisions must be finalized on lighting and daily maintenance,as well as scheduling regular police patrols around the site in lieu of hired security.
However, he added, “I don’t see any of this as an obstacle. I see it all as an opportunity.
Last summer, Hays pushed the Central Arkansas Transit Authority to consider ordering CNG-powered buses to begin converting its fleet to the alternative fuel. CATA would have needed to borrow $1.7 million to build a CNG station of its own.
CATA’s board of directors - made up of members from Little Rock, Sherwood, Maumelle and Pulaski County as well as North Little Rock - considered the issue for three months before rejecting Hays’ plan in an 8-3 vote.
The only affirmative votes in the CATA decision came from Hays’ three appointed North Little Rock representatives. It would be extremely rare, judging from history, for his City Council to likewise reject a project initiated by the mayor.
The three grants being recommended Monday will be for $300,000 from the Arkansas Agriculture Department, $100,000 from Southwestern Energy Company and $100,000 from Chesapeake Energy Corp.
The state grant and the Southwestern Energy grant each stipulate that payment will come after the facility is built, meaning North Little Rock must pay more of the costs upfront. The city has already committed its part toward construction.
The city’s initial cost is listed as $102,812 in documents obtained by the Arkansas Democrat-Gazette through a Freedom of Information request this week. That information, as well as a breakdown of the initial $602,812 cost - or $902,025 if backup compressors and storage are added - is included within six pages of the Southwestern Energy agreement. Those papers hadn’t been filed as of Friday afternoon for the City Council’s review in advance of its expected vote Monday.
The Southwestern Energy grant comes with contractual clauses, which the city attorney’s office and the mayor amended Friday. Neither the state nor Chesapeake Energy made similar requests.
Among Southwestern’s requests were stipulations for the city to sell CNG to the company at the city’s own rate for 10 years. The city has responded with an offer to provide the company CNG at a rate “equal to the least expensive rate charged.” Southwestern also wants its company’s signs on the public property.
The city would determine the parameters of such grant obligations, Hays said, though he considered the request “relatively minor” in exchange for the grant.
Arkansas, Pages 9 on 07/24/2010