New Nicor pact will save Pingree money
By Ryan Klassy For The Courier-News June 21, 2012 12:10PM
Updated: July 23, 2012 7:43AM
PINGREE GROVE — One could call it a sign of the times. Pingree Grove officials have taken a run-of-the-mill contract renewal and turned it into a money-saving venture.
Trustees voted unanimously this week to approve an ordinance authorizing Nicor Gas to construct, operate and maintain a gas distribution system in and through the village.
According to documents prepared by Village Administrator Ken Lopez prior to this week’s village board meeting, utility companies are typically required by law to maintain such an agreement with municipalities in order to use the public right of way.
“They are common types of agreements that are required for all sorts of services, including ComEd, cable, natural gas and other utilities,” Lopez said.
Municipalities don’t have a lot of choice in the matter, given that their residents need natural gas service and Nicor is the only reasonable choice to provide it.
Under Lopez’s direction, however, the village negotiated some terms into the customary form of agreement proposed by Nicor.
First, the village managed to increase the amount of free gas it receives, measured in therms. Approximately 100 cubic feet of natural gas is burned to generate one therm of energy.
This will save the village money over time.
“We’re not talking thousands of dollars here, but we do have several accounts that cover a number of facilities within the village, so it will add up,” said Lopez.
The village’s discount also will increase in proportion with its population. The “free therms” can be used for any village operations, potentially including the public works rental property, police station and village hall. But according to Lopez, the village’s wastewater treatment plant is not eligible.
Pingree officials negotiated the proposed 50-year term down to 35, which Lopez said gives them more flexibility in the future. The previous agreement was signed in 1968, when Nicor was known as the Northern Illinois Gas Co.
Under the agreement, Pingree will receive benefits equal to those extended to any municipality, even those that may qualify for deeper discounts because of their larger size. This “most-favored-nation” status will earn the village more free therms on a per-capita basis to match the terms of the most favorable agreement Nicor offers.