NSSD locks in natural gas price over next five years

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Updated: April 13, 2012 1:39AM

Trustees of the North Shore Sanitary District have decided to lock in a five-year supply of natural gas to take advantage of market prices that are the lowest in a decade, according to David Miller, the district’s assistant general manager.

”Now is a good time for us to save money by taking advantage of this low price,” Miller said.

He explained the price of natural gas fluctuates constantly depending on various market factors. Some of these include weather, the economy, increased storage reserves, and the practice of fracking — horizontal underground drilling that has increased access to gas from shale fields.

Miller said the district has been spending from 4-7 percent of its operating budget, or as much as $1.7 million, for the purchase of natural gas over the past five years.

“Sixty percent of the gas is used for the sludge dryer at the district’s recycling plant in Zion,” he said.

Miller said the district’s consumption of natural gas has been “very consistent” since the Zion plant came on line a few years ago.

”While consumption has been consistent, our natural-gas expenditures over the period have been less predictable. Approving this long-term contract could prevent us from spending lots of money in the future and help us budget this sizeable expenditure,” he said.

Dan Pierce, board president, said that while the price of natural gas fluctuates and locking in a long-term contract might seem a gamble, he thought this to be an appropriate time to take advantage of a favorable market. Trustees readily agreed and authorized staff to enter into a five-year contract at today’s prevailing rate.

In other action, the board approved the accounting firm of Swarztrauber & Co., Waukegan, to conduct the district’s audit upon completion of the fiscal year on April 30 at a cost not to exceed $47,500. That is the same price as was charged the past two years.