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Posted: May 27, 2009 12:30 a.m.

Bidding begins for gas providers

More than a dozen agencies seek to provide fuel

As the price of gas continues to rise, Covington is trying to save money and gain supply stability by purchasing in bulk. In April Covington joined the North Georgia Fuel Cooperative, a 16-local-government-agency cooperative that is pooling its fuel needs in an effort to secure less expensive gas prices.

Covington Utilities Director Bill Meecham said the city wanted a better fuel price and a more secure fuel supply, especially in light of last year’s fuel shortages.

The cooperative is voluntary and any agency can pull out at any time. The 16 agencies have a combined fuel need of almost 24 million gallons. Gwinnett County is leading the effort and Purchasing Director Scott Callan said Gwinnett, which purchases 6 million gallons annually, would already save $100,000 if it had the pricing of the agency with the lowest current price in the cooperative. The bids could end up saving the county even more.

Callan said Covington was in the cooperative for 183,716 gallons. Meecham said the city typically uses 8,600 gallons of gasoline and 6,600 gallons of diesel per month. The city’s usual suppliers are Pijon Inc-Shell Products and Woco Pep Oil Co. Meecham and Callan said they wouldn’t know how much money Covington could save until the bids came in.

Callan said the bids were initially supposed to come in by May 21, but the deadline has been moved back to July 11, because of the logistical difficulty in dealing with 16 agencies. He said agencies use different fuel types and have different fuel pricing agreements, including fixed and variable pricing.

As of now, the cooperative has asked for single pricing, not for different pricing for different geographies. However, Callan said many details could still change, including private businesses becoming involved in the cooperative as well.

Callan said he expected eight to 10 bids from the Atlanta market, including some from the larger national fuel companies. Callan said a similar, larger fuel cooperative in Texas saved the participating agencies significant money and helped them improve fleet operations and logistics, because they learned from each other. He said the agencies can study each other’s systems and find the most efficient way to operate.

The mayor and council agreed that the cooperative seemed like a worthwhile project.

Cooperative agencies are: Cobb County and Cobb schools, Dawson County and Dawson schools, DeKalb County and DeKalb schools, Forsyth County, Fulton County, Gwinnett County and Gwinnett schools, Jackson County, and the cities of Atlanta, Covington, Gainesville, Marietta and Smyrna. Other agencies are also considering participating.

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