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Town of Oyster Bay Joins the County’s Natural Gas Contract

Nassau County Executive Edward P. Mangano on March 20 announced that the latest municipality to benefit from Nassau County’s low-cost natural gas contract is the Town of Oyster Bay, which expects to generate significant savings on the natural gas it uses to heat several of its facilities and, soon, to power its sanitation fleet.

“This is another home run for county-wide taxpayer savings,” Mangano said. “We’re working hard on collaborative initiatives like this one which helps residents of other municipalities, because in the end it benefits all county residents.”

The Town of Oyster Bay estimates it will save 15-25 percent on its natural gas purchases, paying $.57 per thermal unit instead of between $.76 and $1.08 per thermal unit – the measurement of energy use for natural gas. In addition to heating town facilities Oyster Bay will now compress its own natural gas to fuel its sanitation fleet, according to Mangano. The town has been buying compressed natural gas to power its sanitation fleet, but will now be able to buy its own natural gas at a lower price and convert it themselves into compressed natural gas (CNG), at its recently completed fueling station at the Department of Public Works. 

Nassau County entered into an agreement with Hess Corporation in 2010 and has so far estimated savings of about $7 million since 2010, Mangano revealed. The drastic drop in natural gas prices continues to benefit Nassau and other entities that have “piggybacked” on the contract, as it was based on a cost basis contract that is fixed for five years at $.168 per thermal unit, enabling the county to buy the New York Mercantile Exchange (NYMEX) future rate each month, as it descends in price.

This contract allows for the flexibility to lock in or trigger any or all of the users natural gas demand at no additional transaction expense, Mangano stated. The savings was based on usage, which depends on the weather, and the fluctuating market rate due to storage capacity.

“It simply made sense for the Town to piggyback on the county’s agreement to get natural gas at a lower cost,” said Oyster Bay Town Supervisor John Venditto. “In addition to the significant cost savings, there is the environmental aspect that natural gas is the cleanest readily available fuel for large trucks, so using compressed natural gas rather than diesel will provide real, quantifiable reductions in greenhouse gas and criteria pollutant emissions while displacing the use of petroleum and helping further the town’s commitment to energy conservation and reducing greenhouse emissions.”

Mangano noted, however, that he’s disappointed that more school districts and other municipalities haven’t taken part in this or other cost-saving initiatives the county has implemented as part of cooperative purchasing consortiums. In addition to Oyster Bay, just ten of Nassau’s 56 school districts, along with Nassau BOCES and one local library district have piggybacked on Nassau’s contract with Hess Corporation.

Nassau belongs to two countywide purchasing consortiums that have generated millions in savings for participants on various initiatives. Contracts the county enters into as part of these consortiums contains a clause allowing “political subdivisions” to purchase off of it.