Town of Jay gas customers should see lower gas bills as soon as this summer following the council's approval Monday night to sign a contract with Black Belt Energy (BBE) gas, which offers larger quantities of natural gas at a lower price through Florida Gas Utilities (FGU).
BBE, a natural gas supplier that has a contract with FGU, mailed a letter to the town of Jay, presenting the opportunity to participate in a gas prepay transaction, which offers discounted pricing for a 30-year commitment to the quantities of the gas.
BBE serves 23 members or towns, which will all benefit from this discount offer, according to Florida Gas Utility General Manager Tom Geoffroy. Geoffroy said the daily market price for natural gas depends on stock interest rates and effects the price his company can sell it to municipalities for.
“The town approved buying a portion of their gas needs on a long term basis at a significant discount,” said Geoffroy. “They agreed to enter into an agreement for gas at 30 cents less than market price for a term of 30 years. It is a long-term commitment for 30 years. Jay is already set up and they've been a member of FGU for some time. We've been meeting their needs for many, many years. We buy all of their natural gas needs every day and this highly discounted gas is a good savings for them. It's very much a significant discount. It makes it a worthwhile deal to get it for that amount of a discount long-term. The town owns the system and it's only available to municipality-owned gas systems. The city-owned systems have the advantage. The town is taking advantage, so it's a win-win situation. Everyone wins.”
Geoffroy said that the town of Jay has taken advantage of two other discounts natural gas discounts, one at 40 percent and another at 30 percent in the past, so this is the third installment to save the town money. He said market conditions have to be suitable for deals like this to be presented and with the economy doing well lately, his company seized this opportunity to save its members money.
