HERMISTON, Ore. (AP) — The city of Hermiston has voted to start its own natural gas utility to serve an expanded agricultural plant and other industrial development south of the fast-growing city in northeast Oregon.
The action is just the first step and can be undone easily, city officials told the East Oregonian (http://bit.ly/1tG7VRo ). A City Council vote Monday authorizes retaining experts for a feasibility study.
City officials say the move follows new estimates from the regional gas utility company, Cascade Natural Gas, for a planned gas line to serve an expansion of the DuPont Pioneer corn seed plant. The estimates were five times higher than Cascade projected two years ago.
That was at a time when the city of Hermiston was competing with Nampa, Idaho, for the plant's expansion.
The initial estimate was $450,000. The new estimate is $2.3 million.
"We were given very little information on why exactly that was the case, other than that there had been a mathematical error," said Assistant City Manager Mark Morgan.
The utility company released a statement that said it "explored all options regarding an expansion of natural gas service to the industrial area of Hermiston, in accordance with our regulatory tariffs, and was not aware of the city's plans to consider establishing a natural gas utility on their own."
The city's legal counsel on utilities, Chad Stokes, told the council that an independent study indicated $2.3 million was a reasonable estimate, but if the utility intended for the city to pay for the line, it could be worth looking into retaining ownership and profits through a municipal utility.
The city utility would serve only the industrial area, not the residential customers that Cascade Natural Gasnow serves.
Mayor Dave Drotzmann said it would take a long time for the city to recoup a $2.3 million investment, but it might be worth it if it cleared the way for new companies to invest in Hermiston.
"We believe in our businesses that have chosen Hermiston as the place that they want to site their industries and bring jobs to our community, and we're willing to help facilitate that in any way possible," he said.