After reading the editorial from The Natchez Democrat on April 16, I realized that the community does not have a full understanding of the American Midstream Pipeline that currently runs through the Miss Lou.

About a year ago, American Midstream was purchased by Arclight Capital Partners, a hedge fund out of Boston with assets of $10 billion. Our pipeline was included with that purchase. Only a few months following the purchase, American Midstream held customer meetings expressing the need to upgrade or abandon the line due to safety concerns.

However, American Midstream stated in their notice of open season that, “the pipeline is compliant with pipeline safety regulations; it has never failed a DOT or safety audit; nor has it failed to provide firm service.”

During these meetings, shippers were told that they must agree to a restructuring plan or that the pipeline would file for bankruptcy and ultimately be abandoned.

On Nov. 27, 2013, a notice of open season was issued by American Midstream asking customers to choose between the following by Dec. 27, 2013:

1) Replication: Rebuilding the mainline at a cost of $198,820,000. Per exhibit R1 of the notice of open season estimated rates for firm transportation (FT) = $121.9942 compared to our current rates for firm transportation = $8.248 and estimated rates for FT-small general service (FT-SG) = $14.8544 compared to our current rates for FT-SG = $1.0058. This is approximately 14.8 times our existing rate and a 1,379.1 percent increase of existing rates.

2) Natchez line: Rebuilding the mainline from Winnsboro into Natchez and retiring mainline segments from Winnsboro to Monroe and from Natchez to Zachary at a cost of $47,239,000. Per exhibit N1 of the notice of open season estimated rates for FT = $32.0207 compared to our current rates for FT = $8.248 and estimated rates for FT-SG = $3.8989 compared to our current rates for FT-SG = $1.0058. This is approximately 3.9 times our existing rate and a 288.2 percent increase of our existing rates.

3) Natchez-plus line: Building the Natchez line (see above description) with potential of future industrial growth (Natchez line plans for an 8-inch line whereas the Natchez-plus line plans for a 16-inch line) at a cost of $61,567,000.  Per exhibit NP1 of the notice of open season estimated rates for FT = $15.7609 compared to our current rates for FT = $8.248 and estimated rates for FT-SG = $1.9191 compared to our current rates for FT-SG = $1.0058. This is practically doubling our current rate with a 91 percent increase from our existing rates.

4) Failure to commit: Failure to respond or failure to subscribe to one of the three options above would result in an orderly shutdown of the mainline facilities commencing April 1, 2014.

I am unsure where The Natchez Democrat received their information about rates only increasing by less than $2 per month, but it’s simply not the information that was provided to the customers. I, however, stand behind my public statements that rates could increase up to five times our existing rates. Based on the above information, provided by American Midstream, my statements were quite conservative.

Due to the outrageous quotes provided by American Midstream, we have come together to fight for the natural gas service that we deserve and have been paying for. Our rates over the past 20-plus years have been higher than the norm to accommodate the maintenance costs for our aging pipeline.

Unfortunately, our line has not been upgraded and maintained with those revenues. This is why I, and other mayors along this pipeline, am working so diligently with our congressional delegations in Louisiana and Mississippi as well as our Louisiana state legislators to attempt to maintain natural gas service with a fair price to our businesses and residents. I assure you that we would not have local, state and federal officials up in arms over a mere $2 a month increase in our local gas bill.

In summary, I will continue to work hard to secure fair utility rates for my constituents. If American Midstream wants to offer a $2 a month increase to our existing gas bills, I promise you we will take it. As always, my door is open if you would like to discuss the details of this issue or any other regarding the City of Vidalia.

 

Hyram Copeland

Mayor of Vidalia

 

Editor’s note: Our April 16, editorial was not clear that the less than $2 per month, per natural gas customer was in reference to an estimate American Midstream provided for residential customers of Atmos Energy, the primary provider of gas service in Adams County. Other pipeline customers, including the City of Vidalia, may not see similar rate increase. The editorial was not clear, and we regret the error.