NPGA holds strategic planning session

The National Public Gas Association Board of Directors held a strategic planning session as part of its quarterly Board meeting in September. Here is a rundown of some of the topics discussed during the session:

Natural Gas Market Outlook

Jonathan Meide, portfolio manager at The Energy Authority, based in Florida, provided the Board with a natural gas market outlook. Significant volatility continues to impact the market. The primary driver of the volatility is the interplay between low supply and high demand caused by multiple factors, which include:

  • Impacts from the war in Ukraine;
  • Ongoing drought in the Western U.S.;
  • Increase in Liquified Natural Gas (LNG) exports;
  • The energy transition to more renewable energy sources due to more natural gas being used by the power generation sector. Natural gas is the primary fuel used to backup weather-dependent wind and solar electric generation.

Change in Hedging Policy

The Board approved a change in its natural gas hedging policy. The previous policy hedged 50 percent of member gas volumes for forward months 13-24. The amended policy hedges 25 percent of forward months 13-24 and 25 percent of forward months 25-36. The Board approved the change to diversify the timeframe in which hedges are placed and take advantage of currently lower hedge prices in forward months 25-36 vs. 13-24.

Storage Funding for Members

The Board continued its discussion on funding strategies for members that have costs associated with natural gas storage. Earlier this year, due to substantially higher natural gas prices. The Board authorized staff to charge members monthly for the cost of gas injected into storage. NPGA provided previous funding for storage as a benefit of membership, but the higher cost of natural gas is causing liquidity constraints.

Value-Added Services for Members

An overview was provided to the Board regarding NPGA’s value-added services for members. Those services include:

  • Advocacy regarding pipeline owner activities. NPGA monitors and actively participates in various pipeline issues such as federal pipeline rate cases that impact costs to members.
  • Asset Management Arrangements (AMA). NPGA’s AMA activities have saved a significant amount of money in the form of capacity payments to NPGA members served by Northern Natural Gas (NNG) and Southern Star Central (SSC) pipelines. Monthly and seasonal bidding also saves participants on Colorado Interstate Gas (CIG) pipeline on their cost of gas.
  • Grant funding assistance. NPGA assisted its members with a recent grant funding opportunity through the Pipeline Hazardous Materials and Safety Administration (PHMSA). NPGA held a grant funding workshop in April and kept members updated of the grant funding process. Six NPGA members applied for PHMSA grants totaling $2.9 million.

Grant Assistance Initiative

Another value-added service under development through NMPP is a grant assistance initiative to help municipalities with grant funding opportunities available through the recently passed Infrastructure Investment Jobs Act. NMPP staff is reaching out to state partners and will be focusing on how it can assist members in this area.

Utility Staff Retention Success

Village of Stuart, Neb., Utility Superintendent Bob Lockmon shared with the Board his successful experiences in attracting and retaining utility staff. With a Village population of 480, Stuart’s utility department has grown from a two-man crew to 13 staff members. The Village performs most of the Village’s maintenance instead of hiring outside contractors and working on many projects for neighboring communities. Lockmon’s advice included:

  • Taking a proactive approach to finding young workers. This includes contacting lineworker schools to look for prospective workers. Lockmon said he looks for workers with good attitudes and work ethic and a strong desire to want to live in the area.

“We’ve been successful, but we had to go out and look for (workers) and not waiting for them to come to us,” he said.

  • Stuart developed an internship program that awarded a college student with hands-on experience at the utility. That program has resulted in six utility lineworkers working for the Village.
  • Making salaries competitive within the industry. Getting the support from city councils can be a challenge regarding salaries, but Lockmon said it’s important to make the business case on why making salaries competitive or adding a worker would benefit the community.