Atlanta Gas Light won approval from state utility regulators Tuesday to create a network of natural gas fueling stations.

AGL would use $12 million of a public universal service fund to encourage private investors to build CNG fueling stations. The fund is 40 percent backed by money from its industrial customers. Residential and commercial customers do not contribute to it as a part of their utility bills.

There are about 112,000 natural gas-fueled vehicles traveling on U.S. roads, according to Natural Gas Vehicles for America, the trade and lobbying group for CNG-fueled vehicles. That would include buses in MARTA’s fleet, which has its own fueling facilities.

There are about 1,000 natural gas fueling stations in the United States. About half are open to the public, the trade group said. There are five CNG stations statewide, including two in the metro Atlanta area, but these are not owned by AGL.

Money from the fund is used normally to extend pipelines to areas where new homes and businesses are being built, but the sluggish economy has curbed that. Instead of letting the money go unused, AGL plans to use it to help spur CNG development.

Under the fueling station plan, an investor would have to put up 50 percent of the money for the project — which includes preparing the station for the CNG equipment as well as the equipment itself — and AGL would contribute the balance.

“This is a graduated plan to allow the market to develop over five years,” said David Weaver, AGL’s managing director of regulatory affairs, prior to Tuesday’s decision. “Then we would step out of the way and let the market go.”

That 50-50 split in investment would last for five years. After that, AGL would no longer contribute money to the stations, which would be owned by private retailers. Commercial fleets are expected to be the main users of the stations, but the Georgia PSC also will decide Tuesday whether to let small gas stations participate so individuals who drive CNG-fueled cars have additional options to fill their gas tank.

“You’re going to see companies like UPS, Coke, Comcast, Charter, ATT, they all have programs to purchase nationally. Let’s open stations that are going to be located where the fleet needs them,” Weaver said.

Some PSC members, as well as the agency’s staff, said prior to Tuesday’s vote that they supported AGL’s proposal but want to limit it to commercial fleets until it’s clear the market will support such a venture.

“I have a fear that we’re going to go out and do something, and these stations are going to be vacant three, four years from now, and people are going to say, ‘Why did you do that?’” PSC member Chuck Eaton said.

Another chief issue is who would own the equipment. AGL wants full ownership, arguing, among other things, that should a CNG station default or go bankrupt, the gas company could remove the equipment and use it someplace else.

That plan isn’t completely satisfactory for at least one company, which also happens to be one of AGL’s potential chief competitors.

“We should own the percentage of the state equipment in addition to the site improvements,” Warren Mitchell, president of Clean Energy Fuels, said in an interview with The Atlanta Journal-Constitution. Clean Energy is a California company founded by billionaire T. Boone Pickens.

Some are concerned whether AGL’s use of public money is enough to kick-start private investment.

“We really want to find a way to encourage private actors here because I think we all agree that private markets work best,” said Clay Jones, vice president with the Georgia Traditional Manufacturers Association. “The reaction [from retailers] of that 50-50 split is, is that going to encourage people to invest in those stations. If not, then we’re wasting our time.”

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Article source: http://www.cngnow.com/News/Post.aspx?ID=516