NPGA locks in savings with gas agreement

December 30, 2019

The National Public Gas Agency (NPGA) recently received final pricing for participation in a 30-year gas supply agreement with the Municipal Gas Authority of Georgia that locks in natural gas at a discounted rate through a prepaid gas transaction with Citigroup.

The transaction was priced in late November, achieving a discount of $0.29/MMBtu which projects to an approximate annual savings of $53,000 for NPGA members. Gas flow from the transaction is projected to start February 1.

NPGA is also working on another possible gas supply agreement with MGAG related to a JP Morgan prepaid gas transaction that could lock in discounted pricing early in 2020, depending on market conditions. The NPGA Board received updates on both gas supply opportunities at its quarterly board meeting Dec. 12.

NPGA staff researched several gas supply contract options with interested third parties for the Board to consider before it approved two agreements with the Gas Authority. The transactions include various minimum discounts for segmented pricing periods over the term of the contract.

NPGA members will share the benefit by using the prepay discount to offset administration and general costs.