Guernsey awarded OKC natural gas consultation contract
Oklahoma City Hall has more than 40 facilities that use natural gas in sufficient volume to qualify for use of a third-party supplier rather than local utility Oklahoma Natural Gas. (Photo by Brent Fuchs)
OKLAHOMA CITY – C.H. Guernsey & Co. is now helping City Hall manage its third-party natural gas resources for more than 40 facilities across Oklahoma City.
The consultation services contract is expected to save the municipal government about $200,000, according to Budget Director Doug Dowler.
Oklahoma Corporation Commission rules allow cities that use large quantities of natural gas to hunt for better prices than what Oklahoma Natural Gas Co. charges. Dowler said the city has been using a consultant for several years, and this is Guernsey’s first time to win the bid for its consultation services.
The city recently awarded a related contract to Twin Eagle Resource Management in Houston as the source of natural gas purchases. One of Guernsey’s largest responsibilities is to identify the best times to place orders.
“Natural gas is a very volatile market, changing pretty significantly in relatively short periods of time based on weather, storage and supplies,” Dowler said.
Guernsey Vice President Frank Beling said his company provides similar services for several municipalities and electric utilities around the country. Hedging in the current energy market is difficult, he said.
“Natural gas has been really interesting over the last several years,” he said. “With all the fracking we’ve had, it’s produced the lowest period of natural gas prices in a really long time. … There’s always the possibility of volatility that things could go up and down, but prices have been very low.”
During the fiscal year ended June 30, Oklahoma City spent about $900,000 on natural gas and related services, including the previous consultation contract. That total was 17 percent less expensive than if the city had used ONG as its only source.
Dowler said that as the city expands its compressed natural gas-fueled vehicle fleet, its network of fueling stations falls under same Corporation Commission rule.