By Carrie Moritz, Gazette
On Wednesday, May 24, the Garretson City Council met in special session. With only three items on the agenda, it was a short meeting, but the council had to make two important decisions, one of which was to accept an offer of extra capacity for natural gas.
The first item was the transferring of a liquor license. As of today (Thursday), LeRoy Austin has officially taken ownership of Big Ern's Sports Cabin from Ernie Smith.
When questioned if the name would stay the same, Austin replied, "It'll stay the Sports Cabin until it's no longer there." Austin plans to build new on the land at some point in the future, but final plans had not been confirmed to the Gazette as of press time.
The council voted unanimously to transfer the license to Austin.
Mayor Greg Beaner then brought up natural gas.
"[Clayton Energy President] Bill Lindley said there was an opportunity for increased capacity," Beaner told the council. "It doesn't come up very often." Mayor Beaner outlined the notes from Lindley, stating that its common practice for the community to have enough capacity to be able to meet peak needs during the winter.
"In essence, it would mean we'd never go over capacity and would never have to worry about peak pricing," said Beaner. "It would help as we continue to grow."
The one-time charge for the increase would be $347,000, and would increase Garretson's capacity by 175,000 decatherms, bringing total capacity to 713,000 decatherms.
During the meeting, the council discussed with Lindley the increased cost of natural gas transmission, as Northern Natural Gas had requested a transmission price increase from federal regulators that started in January, on top of the increased cost of the gas itself. While the full amount that was asked for was not granted by regulators, they did receive a partial increase.
Lindley pointed out that many companies are updating pipelines and transmission lines that were installed in the 1940's, but when put on top of the increased cost of natural gas, the sticker shock has been tough for consumers.
Adding to this, many communities have been short on their capacities, including Garretson.
"It's a very unfortunate situation," Lindley said by phone to the council. "Natural gas prices were low for so long, and these ethanol plants have chewed up the excess capacity... pipelines have filled up because natural gas has been the fuel of choice against the price of propane. Now, you're short, and the 175[k] that you need to acquire, just covers the day you had on December 22, 2022."
On a peak day last season with -15 degrees Fahrenheit and 50 mph winds, Garretson went through 715,000 decatherms, according to Lindley.
"All cities should have enough to cover their peak days," Lindley said. "It's just unfortunate that there's construction costs along with it."
"With all this infrastructure growth...along with the campaign that seems to be going along with eliminating natural gas...if the gas companies want to increase capacity but the government is saying to cut use, how does all this fall together?" asked councilor Bruce Brown, referring to the recent laws passed by New York and several cities in California, which prohibit or discourage natural gas installation in new buildings in an attempt to reduce fossil fuel use.
While Lindley didn't want to make any guarantees, he said that he sees natural gas continuing as the fuel of choice for a long time, especially in the Midwest. He also pointed out that it was for new construction, not existing properties.
"My concern is that it starts out as that, but it moves on to, well, you're going to have to pay this much more if you want this or else you can do this," said Brown.
Lindley said that while those are "concerns that are out there," he does not foresee that for South Dakota unless it changes for the entire country, in which case everyone would be dealing with the issue.
"I'm trying to help cities get to where they need to be," Lindley said, as part of his final selling point to encourage the council to increase the capacity.
Mayor Beaner asked Finance Officer Paetyn Dreckman if the city had the finances to cover the one-time charge. She stated they didn't, but she pointed out that the price was extremely fair, and was worried the city wouldn't receive a capacity increase at that good of a cost again. She continued by saying the costs would be made up quickly, and the city did have the cash on hand to cover it.
"I'm just concerned that we really don't have much choice," said councilor Bill Hoskins. "If we're gonna grow to the south, I think that we need to do it."
Mayor Beaner agreed, pointing out that "kicking the can down the road" would only increase scope and costs.
With that, the council voted to accept the capacity increase and after looking at the Annual Report for 2022, adjourned for the evening.
