Clara City approves natural gas franchise
CLARA CITY -- City Council members in Clara City unanimously approved a franchise agreement that will bring natural gas service to the community by the end of the year.
Council members held a special meeting Friday afternoon to approve the franchise for Dooley's Petroleum of Murdock, according to Wendy Block, city administrator.
The franchise agreement with Dooley's opens the way for the company to develop a distribution system that will also serve the communities of Raymond, Maynard, Prinsburg, Roseland, Svea, Blomkest and a large rural area along U.S. Highway 71 south of Willmar.
The system should be installed and fully charged by Oct. 1, according to Randy Dooley, company president. It represents an estimated $8.5 million to $10 million investment.
The company intends to break ground April 1. It will connect to a Northern Natural Gas line north of Renville.
Svea, Blomkest and Roseland have already reached franchise agreements with the company. Raymond and Maynard are expected to approve agreements soon, Dooley said.
The decision to award the franchise to Dooley's Petroleum in Clara City followed a recommendation by a special committee. It had looked at rival offers from Dooley's Petroleum and from a limited liability company developed by the Farmer's Co-op Oil and Prinsburg Farmers Co-op.
As the largest community to be served, Clara City's decision was considered very important, according to Dooley. It helps assure the customer base needed for an economically viable system.
The price difference between natural gas and delivered fuels -- propane and fuel oils -- is substantial. Dooley said they project that a large percentage of potential customers within the service area will convert to natural gas service within a five-year time frame.
Homes and businesses along the route will have the option to connect to the system for a hook-up fee based on the size of line needed.
Block said the city has long sought an opportunity to bring natural gas service to the community. Current projections show that residences can save up to $1,000 a year in heating costs due to the price advantage of natural gas over delivered fuels. The city has also heard lots of interest in natural gas service from industries in the community. Block said the lack of natural gas service had been considered an obstacle for companies looking to locate in the community.