Bids from gas suppliers for 2024 were opened in the meeting of Northeast Oklahoma Public Facilities Authority on Sept. 18, according to a news release issued by Lee Guthrie of the Tahlequah Daily Press.
Two vendors presented the bids from natural gas suppliers for 2024. Mackenzie Haff from BlueMark Energy and Jason Turk with Clearwater Enterprises, turned in sealed bids, and Jim Reagan, general manager of NOPFA, accepted them before the start of the meeting.
“We put out bids and requirements for the bidders, and this puts me in a spot here, but we only had one bidder that met the requirements,” said Reagan.
The specific requirement of which Reagan spoke is the language that was to be omitted from the bids that would remove the burden of fluctuating prices for gas from NOPFA.
“Section 4.3 in the North American Energy Standards Board contract specifically refers to period of daily balancing during operational flow orders,” said Haff. “And that is not something that a supplier regulates. If an OFO is called, or a period of daily balancing is called, suppliers are required to meet those requirements of those OFOs. So we can’t remove that language from the NSESB.”
The NSESB is an energy standard agreement that is adopted by all types of users, so there is a reason that language is in there and can’t be removed, because of the storm of February 2021, said Haff.
“If that type of language was in [your] contract, you wouldn’t have had a [$7 million] invoice [for February 2021],” said Haff. “The invoices across Oklahoma were crippling.”
Oklahoma Natural Gas did not call an OFO during February 2021, and those fees were still passed to NOPFA.
“I just want everyone to understand why that language is in there,” said Haff.
The language omission has been in place since 2011, and this puts the risk on the supplier, not NOPFA, said Reagan.
“We could have an argument over it if nobody had bid, but we’ve got a supplier that [omitted the language],” said Reagan.
Clearwater Enterprises was awarded the bid for $3.88 per MMBtu, thermal unit of measurement for gas, minus .0525 (5 cents) on gas daily.
Leaving the language out discouraged companies from bidding on the year’s supply of gas to NOPFA.
NOPFA borrowed two-thirds and used one-third of the reserves to pay it off. NOPFA had a year to pay off the loan.
“We asked the customers to pay a third up front and the other two-thirds off in a year’s time,” said Reagan. “I was very, very proud of our customers; it was amazing.”