CONTRACT FOR NATURAL GAS SERVICECGS
CLEAR NATER
GAS SYSTEM
100 Y E
777 Maple Street • Clearwater, FL 33755
PO Box 4748 • Clearwater, FL • 33758-4748
(727) 562-4900 • Fax (727) 462-6013
TO: Jennifer Poirrier, City Manager
FROM: Brian Langille, Gas System Executive Director
SUBJECT: CONTRACT FOR NATURAL GAS SERVICE
DATE: August 9, 2024
Historically, Clearwater Gas System (CGS) has offered Contract Natural Gas Service (CNS) rates to
commercial and industrial customers where competitive fuel sources are typically available to the
customer other than natural gas. This option is listed in the City of Clearwater Rate Ordinance
32.068, XXV (1)(i) (Clearwater Gas System Fees, Rates and Charges). These contract rates offer a
lower Non -Fuel Energy (NFE) rate than what's listed in the standard rate schedules.
The City rate ordinance allows for the City Manager, or designee, to execute these CNS contracts.
Since 1997, CGS has had a signed letter/memo from the City Manager allowing the Executive
Director of the Gas System (formerly Gas System Managing Director) to negotiate and execute these
contracts with individual customers. The letter also allows the Director to lower the NFE rate by up
to 20 cents per therm from the applicable ordinance rate and Assistant Director by 10 cents per
therm.
With this authorization letter being over 25 years old, I'm requesting the attached 1997 letter be
voided and the following authorization be granted:
• The Gas System Executive Director has the authority to execute CNS contracts, with the
ability to offer a Non -Fuel rate up to 15 cents per therm lower than the standard
applicable rate in the city ordinance, for Commercial and Industrial customers only.
• This revised authorization would become effective for all contracts executed on or after
August, 1 2024.
Currently CGS has less than 50 signed CNS contracts with various customers. The recommended
NFE rate reduction being requested is 5 cents less than previously authorized; therefore, the changes
will not result in reduced financial return to CGS and the City as these contract rates are already in
place. In addition, any future negotiated rate would be in accordance with the City Green Print
document, as to not financially prohibit the use of renewable energy sources. Please let me know if
you have any questions regarding this request.
BDL/bl
Approved:
JenniferPerl"rrier
City Manager
AN EQUAL OPPORTUNITY AND AFFIRMATIVE ACTION EMPLOYER
www.clearwaterges.com
TO:
FROM:
COPIES:
SUBJECT:
DATE:
CLEARWATER GAS SYSTEM
Interoffice Correspondence Sheet
Michael J. Roberto, City Manager
Chuck Warrington, Gas System Managing Director
Jim Lewin, File
Contract For Gas Service
• June 30, 1997
The commercial market is very lucrative for the Clearwater Gas System and the City. This
market is also very competitive, especially concerning local L.P. (propane) gas companies. To
secure or retain a commercial customer, we sometimes offer a Contract For Gas Service.
This type of contract was approved in our rate case by the City Commission, and allows us
to set contract Non -Fuel energy rates at 5% less than an offer from a competing L.P.
company.
On December 6, 1996, the former City Manager, Betty Deptula, approved defined levels of
authorization for contracts by Jim Lewin and myself (see attached memo). This approval
required signature by the City Manager for contracts where the Non -Fuel energy charge was
set at a level greater than $0.12 below the normally acceptable limit. This requires one more
step and slows the negotiation process especially when timing is of the essence. Since that
time the flux in natural gas and L.P. gas prices along with stepped up competition from L.P.
gas companies has increased the volatility of the commercial market.
In order to simplify the efficiency of our approval process and service to our customers, I
request that you approve the following levels of authorization:
Assistant Director of CGS/Gas Marketing & Planning (Jim Lewin)
Up to $0.100 Tess than the standard Non -Fuel energy charge
Managing Director & Executive Officer (Chuck Warrington)
From $0.101 to $0.200 less than the standard Non -Fuel energy charge
Contract For Gas Service Page 2 Of 2
All contracts where the Non -Fuel energy charge is set a level greater than $0.200 below the
normally acceptable limit will continue to require your authorization.
Additionally, in the past all Interruptible Agreements For Natural Gas Service required City
Manager approval, whether full rate or discounted. These agreements are used for industrial
customers that typically have a secondary back-up fuel source, usually fuel oil or propane.
An Interruptible customer receives a lower rate in exchange for our ability to curtail their
natural gas supply during peak consumption or fuel supply shortages. I request that the
defined limits set forth in this memo also apply to Interruptible Agreements.
CSW/jI
Approved:
Mic J. Roberto
City Manager