Gulf Coast gas munis struggle to rebuild without revenue

Knoxville, Tennessee (Platts)--8Sep2005

Small municipally owned gas companies in the areas hardest hit by
Hurricane Katrina are faced with the task of rebuilding their infrastructure
at a time when there is no revenue coming in to pay for it, officials said.
     While larger investor-owned utilities "can usually throw in the resources
and work to stabilize the system, the smaller municipal systems are in
trouble. And closer to the coast, they've been wiped out," noted Bill Coffeen,
senior vice president of Mobile Gas and its parent company EnergySouth.
     Coffeen said he talked to the mayor of Waveland, Mississippi, and "he
told me they've lost all their revenue. The municipal city government isn't
getting revenue from sales taxes, businesses, water, sewer, gas service. It's
all gone. That cash flow just stopped. My heart goes out to them."
     Mobile Gas is using its relatively unscathed western Alabama facilities
as a staging area to provide resources to those communities slammed by Katrina
in Mississippi, with initial efforts focused on providing key personnel.
     Coordination is being guided by Mobile Gas and the American Public Gas
Assn, while Entergy and the Louisiana Municipal Assn are trying to assist
recovery efforts for municipals farther west, Coffeen told Platts.
     He said crews "found folks working to squeeze off their lines, plug their
lines, keeping gas flowing to as many people as possible to keep their system
stable. The first thing we heard is, they had people working who hadn't eaten
in three days. So we sent out a call for aid and started sending in water and
non-perishable food. We also sent out a call for 3/4-inch plugs, 1-inch plugs,
1 1/2-inch plugs" for their pipeline work," Coffeen said.
     "In trying to help the gas companies, we were also helping the police and
firemen" who were taking care of the people, he added. "Residents were jamming
fire halls, so we were delivering fuel, water, food, cots, blankets, pillows,
diapers as fast as we could unload, then drive back and throw more on the
truck. Some of these smaller communities were the last to get food and water."
     Now, the effort is moving to what Coffeen describes as Phase II or
assessment and recovery of infrastructure. "There are four-inch plastic
pipelines hanging in the trees," Coffeen said. "If you haven't seen it you
wouldn't believe it. They need massive amounts of help."
     What the recovery effort needs now, he said, is technical assistance:
"They need scout cars to go around and figure out what they need. They'll need
to figure out when and where they can re-pressure the system and begin blowing
water out. But in some of the areas, all that equipment has been under water."
     "We need scout teams--a vehicle with two men--to dispatch into these
communities to assess what is needed and then we will gather materials,"
Coffeen said. 
     Much of the material will have to be donated because "these little munis
have no mutual assistance agreements that the big utilities might have."
Likewise, in Louisiana, there are some smaller municipal systems that will
need to rebuilt essentially from scratch, said Don Nijoka, member services
coordinator for the Louisiana Municipal Assn.
     At Abita Springs, Louisiana, "they've lost their entire system," Nijoka
said. "Their gas meters are above ground and when the trees and houses fall on
them it busts them up. They have about 800 gas customers, and I've been told
they will probably have to replace all those meters."
     Revenue loss and how to pay for repairs will be a major issue in the
rebuilding effort, Nijoka said. "We have some systems that are totally
destroyed. Where will that revenue come from and how do companies and people
pay their bills?" 
     The association is focused on getting electricity, water and sewer
systems up first, and noted that many areas are still underwater. He said one
issue is getting workers approved through the Federal Emergency Management
Agency to actually enter an area, "or the state police will stop you."

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