The Adair County Fiscal Court took the tentative first steps toward providing natural gas to county residents at the court’s regular monthly meeting Monday.
Magistrates unanimously approved the creation of a committee to determine feasibility for the project following a lengthy discussion. The action gives Judge-Executive Gale Cowan authority to appoint the committee, which may consist of three to five members.
The committee will gauge community support for the project, as well as estimated costs and potential revenues. The establishment of the committee does not obligate the county to provide the service but is the legally required first step in a series of stipulations to create the gas company.
There was a common question among virtually every person who voiced an opinion on the issue Monday, and almost every official in attendance did: Would the endeavor pay for itself? The pervasive opinion was that the service should be provided, but the county could not afford to take a financial loss.
“I’m all for seeing if it’s possible,” District 4 Magistrate Chris Reeder said. “The fiscal court cannot fund it.”
Sammy Baker, District 3, questioned Columbia-Adair Utilities District General Manager Lenny Stone about the cost. Stone was in attendance to explain procedures for establishing the company and advocating for gas expansion into the county. He noted the large crowd in attendance (the meeting was held at the Jim Blair Center) as evidence of the project’s support.
Stone shared his expertise but declined to get specific on costs vs. revenue, noting that the new committee would have to determine if the proposal is ultimately worth the expense.
“Gas is one of those things that is going to make money, but it’s expensive; it costs a lot; it’s the last utility to go in,” Stone said. “What I would like to suggest and recommend is that you all look into doing this and put some stipulations on it, like we did when we created the water plant. We created a board just to look to see if it made sense, to see if you could get the money, and if you could, to go ahead and go for it.”
“My concern is the expense of it,” District 2 Magistrate Daryl Flatt said, voicing the same reservations as the other magistrates. “What it would take, and would you have enough customers to pay back the debt to actually start up this company. We all know from past experiences with the hospital, I — for certain — don’t want to default on a debt and then it go back to the taxpayer.”
Flatt suggested looking into partnering with the City of Columbia’s already-established Gas Dept. on a merger or expansion, an avenue Stone said should be explored by the committee.
“Everything should be left on the table right now, you just need to put together a group to look into it,” Stone said, adding that federal money might be available.
“Right now, there’s money out there,” Stone said. “I call it COVID money. They give you money for everything, so while we’re doing this, let’s try to get some money coming in. Let’s see how much funding is out there.”
“I think it’s a good idea. It’s going to help a lot of our farmers,” Judge Cowan said before the vote. “We need to know if we’re going to move forward.” She added that she would only support the plan if it provided gas for the entire county, not only select communities.
District 5 Magistrate Billy Coffey offered the successful motion for Cowan to establish the committee. She said she hoped to present the members’ names at the next court meeting.
All magistrates were present for the meeting
Under state law, the Columbia-Adair Utilities District — as a water provider — could administer the service (KRS 74.400), Stone reported to the court. Stone followed up by referencing KRS 74.401, which stipulates that the “gas system established only if primary supply in district or county.”
Kentucky Revised Statutes 74.400 and 74.01., which outline the legal procedures for establishing a gas company, state, in full:
Section 74.400 – District may acquire, develop, maintain and operate gas system – Procedure
(1) Any county judge/executive, except in counties containing a city of the first class, upon petition of seventy-five (75) resident freeholders of a water district organized under the provisions of KRS 74.010, may authorize said water district to acquire, develop, maintain, and operate a system for the distribution of gas to the citizens of the county. The petition shall describe the territory intended to be included in the area to be served and shall set out the reasons a gas distribution system is needed.
(2) When the petition is filed, the county judge/executive shall give notice of the filing by publication as provided in KRS Chapter 424. Within thirty (30) days after the publication, any resident of the district may file objections, and the county judge/executive shall set the matter for hearing within ten (10) days. If the county judge/executive finds the establishment of a gas distribution system by such district reasonably necessary for the public health, convenience, and comfort of the residents, he shall make an order authorizing the establishment or acquisition of the gas distribution system.
(3) The county judge/executive may in his order strike off any part of the territory that the testimony shows will not be benefited by the creation of the distribution system. If the county judge/executive does not find that the gas distribution system is necessary he shall dismiss the petition. Either party may appeal the order to the Circuit Court.
Section 74.401 – Gas system established only if primary supply in district or county
All other provisions of this chapter to the contrary notwithstanding, no water district created under this chapter shall establish a gas distribution system unless the primary source of the gas to be distributed is natural gas produced from within the territorial limits of the district or of a county in which the district is located. A gas distribution system so established may contract with a seller of gas for supplementing supplies of gas. Nothing in KRS 74.020, 74.120, 74.400, 74.401 and 74.408 shall be construed to enlarge any requirement under existing law relating to the furnishing of gas to a water district by any other supplier. However, nothing in this section shall prohibit the continued operation of a gas distribution system in operation pursuant to the provisions of this chapter prior to June 16, 1966.