NATURAL GAS INFRASTRUCTURE AND FEASIBILITY COMMITTEE

WEDNESDAY, JANUARY 20th, 2016

4PM

COUNCIL CHAMBERS

Committee Members present: Lotvedt, and Kraft. Absent was Hoffert. Also present were City Council Members: Bednarz, Rheault, Berg, Mayor Geiszler,and City Auditor Heisey. Presenting was Kadrmas Lee & Jackson Solutions Representatives: Dave Blair, Mark Sweeney, and Doug Lee.

Chairman Lotvedt called the meeting to order at4:00pm.

The meeting time was turned over for a power point presentation and discussion on bringing natural gas to Rugby to Dave Blair with Kardrmas Lee & Jackson Solutions (KLJ). Blair introduced his colleagues: Mark Sweeney – Professional Engineer, and Doug Lee with Progress Solutions sister company to KLJ. Blair and Lee led the power point and discussion on the possibilities of a natural gas service coming to Rugby. They discussed possible development of a natural gas pipeline originating from Minot area and being built along Hwy 2 to bring service to Rugby. Also discussed was the cost effectiveness of a natural gas and Rugby serving as a Municipal Gas Utility Company. The costs of converting to natural gas and the differences between propane and natural gas were also discussed.

Blair and Lee said the next step would be for the City to conduct an interest survey and feasibility study. Blair estimated that the feasibility study would be around $30,000. The number of participating users would be the deciding factor in the feasibility of bringing in a pipeline and developing a distribution system. Blair noted that preliminary estimates suggest that the equivalent of 1,000 users would have to commit to the conversion to natural gas service in order for the project to be financially feasible.

In addition, Lee discussed the possibility of Rugby becoming a regional supplier of gas and overseeing service to other service communities along the proposed pipeline route including Towner, Granville, Velva and Bottineau. The City could act as a franchise or provide as a municipal utility, controlling the gas from separate border system. Any participating communities would be responsible for their own distribution systems.

Another option that was discussed was a liquified natural gas distribution system which would entail trucking the gas from a ND gas plant, providing tank storage and setting up distribution. Lee and Blair noted that commercial accounts alone would not be enough to cover the return on investment of pipeline and distribution system emphasizing that the venture would have to be a benefit for everyone.

Mayor Geiszler stated that the City Council would need more information on the cost of the entire feasibility study and this would have to be proposed to the Council as a whole. The next regularly scheduled City Council meeting is February 1st and Blair committed to assembling a proposal and costs for the study and would try to have that ready before the next meeting.

There being no further business, the meeting was adjourned at5:45 pm.

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Elizabeth Heisey, CityAuditorDate Submitted

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Neil Lotvedt, ChairmanDate Approved