City refreshes franchise agreement for natural gas

Refreshing a franchise agreement with the City of Sundance does not necessarily mean that Black Hills Energy will bring natural gas to town, but it will leave the door open for that to happen.

The city council passed a first reading of an ordinance that grants a non-exclusive franchise agreement to the company for the next 20 years, but Mayor Paul Brooks noted that somewhere in the region of $5 million would still need to be found in order to install the necessary infrastructure.

The council has the option to renew or end this franchise agreement every ten years.

This time around, City Attorney Mark Hughes suggested that there are a few things the council should consider.

Firstly, he pointed out that the document contains no franchise fees. Most cities charge these fees, but if the council is trying to get gas to the city then if could be “kind of a sticky wicket” to do so.

Stacie McDonald, representing Black Hills Energy, explained that no franchise fee has been included because no delivery of natural gas is currently taking place.

Hughes also suggested that the franchise agreement could act as an impediment to any other company that might want to provide natural gas to Sundance.

Brooks asked McDonald if anyone else in this area wholesales gas.

“Not to my knowledge,” she replied.

McDonald explained that the purpose of the franchise agreement is to ensure that Black Hills Energy can provide service to Sundance when and if that becomes possible.

“It is about figuring out that cost ratio,” she said, commenting that Black Hills Energy is hopeful it will happen down the road. After all, she noted, Sundance is in the middle of the company’s territory.

Brooks reiterated his long-held desire to see natural gas provided to the city.

“Nothing would delight me more than to get gas here,” he said.