The Austell Natural Gas System is a city-owned distribution company serving 56,000 customers, and 7 percent of the company’s gross revenue goes into the City of Austell’s general fund, Mayor Joe Jerkins said.
“That’s the reason we don’t have much property tax,” Jerkins said.
The system, established in 1954, is one of 84 city-owned gas systems in Georgia. It’s the only city-owned gas distributor in Cobb, though cities like Marietta and Acworth do own electric-power utilities.
Rob Register is chief executive officer and general manager of the company, whose customers are in the cities of Austell and Powder Springs, and some unincorporated parts of Cobb County, as well as the city of Douglasville and other parts of Douglas County.
“Obviously, it’s a benefit to the city,” Register said. “It keeps the revenue local, and it benefits the taxpayers and the citizens. We like to be proud that we have that small-town feel to us.”
But the company serves a captive market, customer services director Bryan Shick said, because city-owned distribution companies are not part of the deregulated market in Georgia.
Still, Austell Gas has seen its revenues fall in recent years. In 2011, Register said, the agency recorded net revenue, or profit, of $3.36 million. That was down from 2010, when record cold weather pushed net revenue up to $9.46 million, In 2009, Austell Gas had net revenue of $3.76 million.
Jerkins said Austell Gas was responsible for $3.5 million of the city’s $11 million budget last year. Because that was lower than anticipated, the city had to cut $700,000 from its budget. And, so far in 2012, the winter hasn’t brought as much gas usage.
“It’s going to have to be cut more this year,” Jerkins said of the budget.
But Register said the warm winter does have some benefits.
“The less gas we sell, the less gas we have to purchase,” he said. The company, which employs 109 people, buys its natural gas from various brokers on the futures market.
The gas system is overseen by a five-member board, all of whom are appointed by the Austell City Council and mayor. The board hires the general manager.
Register has been general manager for Austell Gas since May 2006. Some of its board members have been there much longer.
Board member Ann Collins joined the board in 1990; Hank Floyd in 1991; and Grant Rainwater followed in 1993. A.D. Wilder, who has been on the board since 2006, and Dennis Perrin, who was appointed in 2009, are the relative newcomers.
Jerkins said Austell Gas was created because Atlanta Gas Light didn’t serve the area.
“They wouldn’t run lines to Austell, so they started their own system,” he said.