New Contract Means Money Savings For Cookeville Gas

Cookeville amended its gas contracts in order to save money for the city and its residents.

Energy Department Director Carl Haney said the city was previously required to purchase gas from three pipelines in certain percentages. Haney said the new plan allows the city’s gas provider to purchase gas from whichever pipeline is the cheapest at a given time.

“Before when we were doing it those gas prices for each one of those legs were just about identical,” Haney said. “But we did notice that now the prices, there’s a little bit, there’s some price differences in there so it was just advantageous for us now to go ahead and start buying it on the cost method.”

Haney said the change is projected to save the city some $120,000 per year. Haney said those savings will get passed directly to the city’s customers.

“It just benefits you either way,” Haney said. “Because before where it was percentage it really didn’t matter. Now if its cost, even if those gas prices fluctuate, you’re still watching them and buying them at the cheapest price that you can. So there’s really no risk involved in that.”

Haney said the city is also limited by the different pipeline capacities made to help serve Cookeville. Haney said the city determined that it would have saved some $14,000 in November alone if it had already been using the new system.

“We buy that by, it’s dekatherms of gas, so we buy it that way,” Haney said. “And so we look at the market prices and they say ‘Ok, this pipeline is selling it by so much a dekatherm.'”

Haney said he wants to make sure the city’s customers understand it is doing all it can to save them money, especially with rising energy costs during the winter. Haney said the amendment also extends the gas contracts to March 31, 2029.