PSU switches gas provider, saves money

Portland State has saved money by switching its natural gas provider for the primary campus loop from Northwest Natural Gas Co. to a subsidiary of British Petroleum in October 2006.

PSU has a three-year contract with IGI Resources-a subsidiary of British Petroleum located in Vancouver, Wash.-which has been the supplier to the central campus loop located under the Park Blocks since the start of last October. The actual distribution of the natural gas is still handled by NW Natural, Portland’s major supplier and only distributor of natural gas, and NW Natural continues to both supply and transmit natural gas to other gas meters used for buildings located off the main campus loop.

“Our natural gas transmission bill is still paid to NW Natural,” said John MacLean, assistant director of facilities and planning. “Changing suppliers was done primarily for cost-saving reasons.”

The natural gas bill for November 2005, when the main campus loop supplier was NW Natural, was $130,000 for 11,453 MBTUs of energy use. The bill for November 2006 was $80,500 for 10,936 MBTUs.

An MBTU is a unit of heat that measures how much energy is required to change the temperature of water by one degree Fahrenheit.

Natural gas is the primary heat source in homes and commercial buildings throughout the city. The central campus loop provides natural gas to most of the buildings around the Park Blocks, including Neuberger and Cramer halls, Smith Memorial Student Union, both science buildings and the Millar Library.

Valerie White, spokeswoman for NW Natural, said that the natural gas distributed in Portland is transmitted from natural gas sources located in Alberta, Canada, and that PSU receives its gas via the Sauvie Island Gate Station. She said that some of the natural gas comes from the Rocky Mountain region and that there are other gates in Portland that service the entire metropolitan area.

“We supply a lot of natural gas to this city,” White said. “This is our niche.”

Senior marketing representative for IGI Resources Rusty Williams said that Williams Pipeline, a division of The Williams Companies, Inc., is the interstate firm that owns and operates the piping that runs natural gas into Portland from Canada.

PSU began to seek a new supplier of natural gas after a consortium among the northern Oregon universities, which involved purchasing natural gas for campus use in bulk and therefore saving on heating costs, ended in 2005. Most of the participating universities have since renewed their contracts with NW Natural for both supply and distribution.

“Theoretically, we could just build our own pipeline,” MacLean said. “It’d be far too expensive to build and lay the pipe from the nearest city gate to campus, however. It’s more prudent to simply shop for a less costly supplier, which we successfully have.”

MacLean said that the gas distribution is done in two ways, interruptible and non-interruptible. Non-interruptible service guarantees that even in the most extreme weather conditions, during which the demand can sometimes exceed the supply, natural gas will continue to be available. Interruptible service is less costly, however, and the risk of natural gas interruption to the PSU campus is low.

“It just makes economic sense to go with interruptible service,” MacLean said. “I’ve been here for five years and an interruption hasn’t happened yet.”

In the case of an interruption, PSU keeps about a week’s supply of contingency oil available to power the heating systems. To keep the oil from becoming unstable and unusable, PSU does utilize the oil for heating systems a few days out of the year.

PSU may consider extending the central campus loop to include the residential buildings within the Park Blocks. The project to evaluate the costs and benefits of such an extension is in its early stages.