The Columbia County Board of County Commissioners and the Lake City Council met Monday to discuss how the entities could work together to provide natural gas to the county’s North Florida Mega Industrial Park.
The park is still under construction, and the county is working toward securing its first customer at the site. But an issue that has come up with potential companies is natural gas supply.
Lake City has its own utility and sells natural gas to residents through a 3-inch pipeline that runs north from Florida Gas Utility’s line. The pipeline that runs to the city has limited space left for new customers—much less a large industrial user.
However, the Florida Gas Utility still has plenty of capacity in its line that comes from Texas and runs all the way to Homestead.
Customers approached the county about setting up at the industrial park left under the impression that their level of natural gas could not be supplied. But Paul Dyal, Lake City’s executive utility director, said that isn’t the case.
While the city would not be able to pull from its current pipeline, it could, through its agreement with Florida Gas Utility, get the gas to the industrial park through a new line.
Dyal said supplying the gas isn’t a matter of capacity on the city side. The question is how much gas the company needs and funding for the new line.
With that information, the city can work out what the rate will be for the customer and, if agreed upon, build the pipe to the industrial park.
Tom Geoffroy, CEO of Florida Gas Utility, emphasized that a new pipeline from his company’s current line to the industrial park could be built faster than the new company will be able to construct its own facility.
“Let me repeat that: It will take longer to build the facility in the industrial park than it will to build the natural gas line to serve them,” Geoffroy said.
He said the natural gas industry doesn’t build a line to a site and then wait for the customer to come. The company would have no clue what size pipe to build.
If they guess too small, a large customer might come that needs more gas than the line can provide. And a pipeline too big costs a lot of money and will cause a high rate that customers might reject.
That’s why the county needs a first customer.
Columbia County received a grant from the state to run a feasibility study on the best natural gas option for the industrial park—whether creating its own utility, relying on Lake City, or some other option.
The $25,000 study is on the Columbia County agenda for Feb. 10. If the commission moves forward, it will conduct a request for proposal process to find a third party to run the study.
Geoffroy said the county could run into a problem if it creates its own gas utility. Lake City could go to the Florida Public Service Commission claiming Columbia County is encroaching on its territory.
The Columbia County Commission didn’t make a motion on Monday, leaving the study an option for the February agenda.
However, Commissioner Toby Witt said with all the information presented, county officials should be able to guide potential customers correctly, letting them know the city can provide unlimited gas.
From that step, the county can work with the city and the customer to work out the price mechanics.
“I’m concerned that maybe these clients are getting conflicted answers or maybe they’re not getting the right answers,” Witt said. “On the county side, we may need to clean that up.”
He added that the county can still move forward with the study, though, to check out all its options.