Commercial gas sales on Denton ballot

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City seeks authority to sell natural gas at industrial park

Denton voters should expect a charter issue on the May 11 ballot that, if approved, would give the city the authority to sell natural gas to nonresidential customers in the industrial park on the city’s west side.

During its planning retreat last week, the Denton City Council steered the staff toward an “election under the charter,” rather than toward seeking an amendment. Denton’s home rule charter puts the city’s authority to own utilities in the hands of Denton voters. The council could have asked the voters to eliminate that requirement with a charter amendment, but they opted instead to seek the authority with voters.

Denton sought special legislation to start a natural gas utility during the last session of the Texas Legislature. Senate Bill 1230 allows the city to build not only a combined heat and power plant but also a high-pressure pipeline in the industrial park. The bill included language that superseded the city charter, which critics have said bypassed Denton voters.

Phil Williams, general manager of Denton Municipal Electric, reminded council members during the retreat that the city’s economic development officials had approached both CoServ and Atmos about bringing a high-pressure pipeline to the area. Without it, he said, Denton has a harder time competing for companies looking to expand or relocate.

After learning that the city would be asked to put up the capital for the pipeline and that the city wouldn’t own the pipeline when it was finished, officials reconsidered that option.

“For that price, we could do it ourselves,” Williams said.

The city has already contracted with engineering firm Teague, Nall and Perkins of Denton for $314,800 to design the pipeline and begin environmental studies. The city is planning a stainless steel, high-pressure pipeline, a minimum of 8 inches in diameter. Preliminary drawings show the line running about 2 1/2 miles along Jim Christal Road and Western Boulevard.

In an interview Friday, Williams estimated that it would take about a year to build a pipeline to serve a new manufacturer, depending on where the company would be located in the industrial park and whether the city would opt to build the entire line. In other words, the city would build the line at the same time a company would be building its manufacturing plant.

“All we would need is a letter of intent that they would buy the gas from us,” Williams said.

The city would finance the construction with bonds that would be paid back by ratepayers in the industrial park, he said.

The new utility would likely be a part of DME, although those final details would have to be considered by the City Council, Williams said.

The city may hire new employees or the city may contract for the service to run the utility. The city also has not yet determined where it will get the gas it will sell, but there are at least two transmission lines in the area, Williams said.

Considering that it remains only a concept, the proposed combined heat and power plant has shaped a lot at the industrial park, council member Chris Watts said at the retreat.

In setting up a tax-increment finance zone at the industrial park, the city is still trying to make sure there is room for a power plant, Watts said, even though no business currently at the park, including new businesses, has expressed an interest in the plant.

Such power plants capture waste heat created when burning fuel to make electricity and convert it for various kinds of heating and cooling needed in industrial uses.

How the charter question will be put to voters is still being worked out. Mayor Mark Burroughs proposed language during the retreat that would underscore that Denton does not intend to compete with Atmos or CoServ. But several council members were concerned the language was confusing and could lead to unintended consequences — including seeing the city pay for the pipeline and then having to give it up.

Denton residents have until April 11 to register to vote in the May 11 election. Early voting begins April 29.

Voters who will be out of town during election can apply for a mail-in ballot from March 12 through May 3. The mail-in ballots must be received by 7 p.m. May 11 to be counted, unless an overseas deadline applies.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com.


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