CNG blends right in with these Black Hills

CNG blends right in with these Black Hills

By Jerry LaMartina
Metropolitan Energy Center, free-lance writer

Black Hills Energy (BHE) knows the value of both supplying natural gas to its customers and using it as an alternative fuel for vehicles: It’s clean, plentiful, domestic and less expensive than gasoline or diesel.

Black Hills Corp., headquartered in Rapid City, S.D., supplies natural gas and electricity to more than 750,000 customers in Nebraska, Kansas, Iowa, Colorado, South Dakota, Wyoming and Montana. BHE Nebraska Gas division is a subsidiary of Black Hills Corp., and is based in Lincoln, Neb.

BHE joined the effort to create a sustainable market for natural gas vehicles in the Midwest when it received a $250,000 grant as part of a $15 million U.S. Department of Energy (DOE) Clean Cities grant from December 2009. The overall grant also benefited several other municipalities and companies in the Kansas City area and elsewhere that had implemented alternative-fuels projects. The grant was administered by Kansas City-based Metropolitan Energy Center (MEC) for the DOE. All the projects supported by the grant constitute MEC’s Midwest Region Alternative Fuels Project.

The grant helped pay for the second public compressed natural gas (CNG) station in Lincoln, which opened in October 2012. The Lincoln Airport Authority had also received a federal grant from Clean Cities and opened the first public CNG station in August 2010. BHE’s total project cost was $640,000.

BHE has created local partnerships and funded incentives for some Lincoln-based fleets and the city to adopt CNG, and the company is expanding its own use of CNG. BHE currently has 36 CNG-fueled vehicles in its 50-vehicle Lincoln based fleet, customer relations manager Paul Cammack says. So 72 percent of the fleet is fueled by natural gas.

While its natural gas vehicle count is rising, BHE’s fuel costs are falling. The company is saving an average of $100,000 to $150,000 a year by using CNG, Cammack says. As of Dec. 31, 2013, the company had displaced 35,000 gas gallon equivalents (gge) by using the alternative fuel.

“In addition to our own fleet, BHE partners are up to more than 100 CNG vehicles, and we expect it to more than double by end of this year. And those are just the ones we know about.”

Why does BHE embrace CNG?

“If you look at it from a purely corporate view, … each one of these vehicles is a new burner tip for natural gas,” Cammack says. “It’s great for our company. From a personal point of view, it’s also very important to know that CNG is good for the environment. Just because we can’t see smog doesn’t mean we don’t have poor air quality. And it’s important for our country to reduce our dependence on foreign oil.”

Cammack’s biggest surprise was customers’ reluctance to convert easily and readily to CNG.

“You can put the facts and figures in front of them, but sometimes, for whatever reason, they don’t pull the trigger and convert to CNG,” he said. “It may be an inherent fear of natural gas, especially compressed natural gas. And then there’s lack of infrastructure for fueling.”

When Cammack runs across somebody who’s thinking about making the CNG jump, his advice is to ease into the transition.

“We tell customers as we put all the facts and figures in front of them, ‘Just do one, just convert one vehicle.’ We’ll help a customer defray the cost of a conversion system on their first vehicle. Once they realize, ‘Hey, this works and I’m saving money,’ then they’ll be back to install more conversion systems on their own.”

When BHE completed its Clean Cities project report, the company said it would outsource the installation and maintenance of future CNG stations to a third-party contractor. Cammack says that’s because doing so helps BHE focus on its primary mission as a utility company.

“I think you’ll find that with most utility companies, selling retail CNG is just not in their wheelhouse,” he says. “Credit card transactions, maintaining a CNG station – that’s not part of how most utilities operate. I think it was helpful that some utilities like us built CNG stations – ‘walkin’ the talk’ – but now I’ve got contractors that want to put in stations.”
Cammack says the Clean Cities grant was invaluable.

“The grant helped the airport and the grant helped us,” he says. “We wouldn’t be where we’re at without that. The grant money has been the catalyst to make this happen. I’m very thankful for that. Actually, the whole community of Lincoln should be grateful.”

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