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City strikes deal to hold costs of natural gas

[05/11/01] Natural gas prices paid by the City of Vicksburg won’t rise for at least a year under a deal announced Thursday by city officials.

The Board of Mayor and Aldermen entered an agreement that will guarantee the price the city will pay for gas for the next 12 months. The contract, negotiated by city administrative assistant Tim Smith with Prior Energy will allow the city to purchase gas at $4.55 per 1,000 cubic feet, a price less than the current rate.

“It won’t go up,” Smith said. “And we’ll know what our price will be for another year.”

The agreement with Prior Energy does not affect rates charged to customers of city gas. Changes in that rate have to be made through city ordinance and take 30 days to go into effect.

During the winter, natural gas prices across the country soared following a decline in supply and a sharp rise in demand. Prices paid by the city had gone up to as much as $9.69 in January. In December 1999, the city was paying $1.98.

But those costs were not passed along to Vicksburg consumers. Instead, Vicksburg dipped into a cash reserve accumulated when prices were lower. Bills were higher, but due to colder temperatures, not higher local rates.

“In publications, what they’re predicting for this summer and the rest of the year is $6 or $7,” Smith said.

Currently the city is paying $4.83 per 1,000 cubic feet of natural gas. The new contract price will begin June 1.

“This is one of those calculated risks that we should take,” said Mayor Robert Walker pointing to the project cost of gas this year.

The other side of the equation is that if gas prices dip below the contract rate, Vicksburg will still be bound to pay the $4.55.

In other matters, city officials:

Approved a $75 ad in the program book for the Juneteenth Heritage Festival.

Allocated $8,959 to the Vicksburg Airport Authority for funding of the Vicksburg Tallulah Regional Airport. That amount is the supplement to the VTR operations budget due for the year from each of the four owners.

Approved $2,500 for the Beulah Cemetery Committee to have the graveyard mowed.

In executive session, approved the hiring of a seasonal employee in the recreation department, discussed a personnel matter with the Vicksburg Police Department and upheld a disciplinary action in the Vicksburg Fire Department.

The Board of Mayor and Aldermen will meet again at 10 a.m., May 21 at City Hall.