Looking to shed itself of a troublesome operation, the city of Buckley has put its natural gas utility up for sale.
The city recently issued a formal “Request For Proposals,” giving potential suitors the opportunity to make a sales pitch for the system.
Buckley is one of only three communities in the state to operate its own natural gas delivery system, creating a small club with its neighbor to the north, Enumclaw, and the Kittitas County city of Ellensburg.
Buckley City Administrator Dave Schmidt said the notion selling off the utility has been kicked around for a couple of years.
There was a time when the city could offer its customers natural gas at a pretty decent rate, less than the rate paid throughout the region. But those days are long gone, Schmidt said, admitting that Buckley’s natural gas users are likely paying 10 to 15 percent more than nearby residents who are supplied by Puget Sound Energy.
The problem, Schmidt said, lies with the ever-increasing safety standards imposed across the nation. There have been a number of large explosions that brought catastrophic results, forcing regulatory reform on providers both large and small.
The increased demands are just too much for a small community like Buckley to handle, Schmidt said. The growing list of regulations “are basically pushing the city out of the natural gas business,” he said.
“We have to break even,” Schmidt added, noting that natural gas is an enterprise fund in the city budget, meaning revenues must match expenditures.
Schmidt knows there are interested buyers, but the city is reserving the right to reject bids deemed too low.
The giant in the region, Puget Sound Energy, has already indicated some “preliminary interest,” Schmidt said. Representatives of Cascade Natural Gas, which now lacks a presence in the south Puget Sound area, have told Schmidt they will be submitting a bid. He said the city of Enumclaw has contacted Buckley as well, seeking details.
As Buckley’s natural gas rates have become less competitive, the mood in town town has shifted, Schmidt said. In 2012, the city included a survey in its utility bills, asking residents if they would support selling the natural gas utility. Only about 10 percent responded but, of those, 76 percent backed the idea of selling off the utility.
A later public hearing on the matter also attracted a small crowd, Schmidt said, that was divided about evenly on the matter.
Buckley voters will have the final say. If the city identifies a qualified buyer, the issue will go to the public and the sale could not proceed without a majority vote.
A timeline is not set in stone, Schmidt said, but a ballot measure could come by November.