ATLANTA — A plan to spend $11.5 million to build a network of compressed natural gas stations in Georgia has sparked debate between those who say the market needs seeding and opponents who argue it amounts to a public subsidy for private companies.
Atlanta Gas Light has proposed funding half of the cost needed to install the natural gas pumps at somewhere around a dozen privately owned fueling stations in metro Atlanta and major highways. The elected members of the Public Service Commission plan to vote on the idea Tuesday.
The utility says the program is needed to stimulate the market for an alternative fuel that is cheaper and burns cleaner than gasoline. But motorists who drive natural gas vehicles have few places to fill up. The vast majority of the roughly 20 compressed natural gas filling stations in Georgia are operated by governments or private companies and closed to the general public.
The utility has a profit motive, too. The more gas it distributes, the more money it makes.
“If you want to be a first-mover in this industry, you have to provide incentives,” said David Weaver, a managing director at AGL Resources, the parent company of Atlanta Gas Light.
“We cannot sit back and be economic purists and assume the market will take off without anything else,” he told the commission during a hearing Thursday.
Weaver said the utility wants to pay for part of the pumping equipment at around a dozen stations, although the exact number would depend on the cost of the proposals from interested partners. Under the plan, some of the money collected at those stations would be used to install additional pumps at more stations.
Money raised at those stations would also subsidize the cost of leasing pumps to residential customers who want to fill natural gas vehicles at home. The utility aims to rent the necessary pumps to residents for around $50 per month. The pumps work slowly, filling a car in a matter of hours compared to just minutes at a commercial station.
Staffers who advise Georgia’s utility regulators have recommended a scaled-back approach, using money from the fund to pay for part of the cost of installing compressed natural gas pumps for operators of large vehicle fleets.
To fund its plan, Atlanta Gas Light would use money collected from its industrial customers as well as other sources. Other firms in the compressed natural gas business say it is unfair to allow a government-regulated utility to use money from those customers to subsidize private businesses.
Clean Energy Fuels Corp., which operates a natural gas fueling station near Hartsfield-Jackson Atlanta International Airport, says the spending by Atlanta Gas Light would distort the free market and discourage private companies from spending their own money to build stations.
Efforts to expand natural gas fuel stations faltered once before. Metro Atlanta made a push to expand its natural gas fleet before hosting the 1996 Olympics. One analyst counted a peak of 90 compressed natural gas fueling stations in 1997 before the figures tumbled because of plummeting gasoline prices and other factors.
Robert Thompson, who sells natural gas cars at Honda Mall of Georgia in Buford, said worries about fuel availability are holding back the market.
“The majority of people that want to buy a natural gas vehicle want a place to fuel it — that’s all,” he said.
But at least one commissioner appeared worried about whether the utility was branching out too far.
“I’m concerned we’re going to be out there competing against private companies that are risking all their private capital,” Commissioner Chuck Eaton said.