Covington will have a compressed natural gas fueling station in 2014 and is on the cutting edge of the technology, according to officials who work around the state.

The Covington City Council voted unanimously Monday night to approve paying $1.6 million to Atlanta-based American Fueling Systems to build the fueling station, which city officials hope will both save the city on fuel over the long haul and provide another source of revenue. The station will be built on City Pond Road, 400 feet west of the intersection with Alcovy Road.

The project’s financing and design are still in final stages, but Covington grant writer Randy Conner said he hopes for a fall groundbreaking and to have the facility completed before April 2014.

“Covington is out on the cutting edge with a half-dozen other cities we deal with,” said Scott Tolleson with the Municipal Gas Authority of Georgia, a nonprofit consortium of cities that sell natural gas. Tolleson said the gas authority has a plan to place stations along the state’s major corridors, and Covington’s location along I-20 makes the city a strategic point. The station will be open to the public.

The authority will provide a low-interest loan for the project, covering construction costs and charging 1 percent to 1.5 percent interest over the course of five years; in addition, 5 cents per gallon equivalent of natural gas will also be paid to the authority to help pay off the loan, according to Conner.

The facility will have four compressed natural gas (CNG) pumps and will be designed to easily accommodate large vehicles like tractor trailers and school buses. Larger vehicles are popular choices to run on CNG because they are both more easily able to house CNG storage and see a quicker return on investment.

Covington is the first city to secure financing from the municipal gas authority, which had set aside $5 million to promote CNG stations, Tolleson said. By using the low-interest loan, Covington will be able to devote more money in the 2013-2104 budget year to purchasing CNG-powered vehicles, thus allowing the city to see a quicker return for its investment.

Conner said in April 2013 the commercial costs for a gallon of gasoline equivalent of CNG he had seen were between $1.95 and $2.25; however, Snapping Shoals EMC, an area electricity company, paid around $1.64 per gallon equivalent. A city that has its own fueling facility is able to fuel its vehicles even more cheaply because it’s a wholesale seller of natural gas.

Conner said Wednesday the city will have 20 CNG-fueled vehicles by the end of the budget year, including 17 police vehicles – likely Chevy Tahoes – a garbage truck, at least one vehicle for the city’s gas department and an already-purchased electric department truck.

The city also will look at possibly converting some vehicles to run on CNG, Conner said. Conversion costs continue to fall as the technology becomes more common, Tolleson said, noting a standard pickup truck or SUV costs $6,000-$9,000 to convert. He said a year ago, costs were more likely to be $9,000-$12,000.

Tolleson said CNG-powered passenger vehicles aren’t yet common because the tanks take up too much storage. He said companies are likely trying to find ways to place storage compartments in hidden places in cars, but he assumes the technology won’t be available for a few years.

Conner said the city would look to purchase another block of police cruisers and garbage trucks next budget year.

“It would be a mistake to replace too many vehicles at one time, since they would all need to be phased out of the fleet at the same time in a few years,” Conner said. “We are currently working on a replacement schedule to ensure a smooth transition of the fleet to CNG over several years.”

The city considered also placing gasoline pumps on the site since the police cars will be hybrid vehicles, but determined the convenience wasn’t worth the extra cost, permitting and time.

“After review, we see that the cars will use less than a gallon of gas per day, which means fueling with gasoline once or twice per month,” Conner said. “Adding gasoline would also eliminate being able to market the site as an Alternative Fueling Facility.”

The city will also consider building an add-on to its vehicle-maintenance bay, because CNG vehicles require different conditions while being worked on, but Conner said any major service will be handled at dealerships since the vehicles will be new. No new employees are expected to be hired in this budget year, as station management will be contracted out, Conner said.

While Covington hopes to save money, opening the station to the public was just as big a priority.

“Once the general public learns the benefits and as the cost of conversion continues to decline, we are certain our public usage will be extensive,” Conner said. “We heard comments last year from Snapping Shoals mechanics who service their CNG fleet that they would convert to CNG as soon as the facility opened.”

Councilman Chris Smith, one of the project’s biggest proponents, said Monday he felt the station would provide an economic boost for the city.

Hunter Hall, president of the Covington-Newton County Chamber of Commerce, told the council Monday during his quarterly update he believed the CNG station would be a benefit in industrial recruitment.

“Kudos to the city of Covington for you guys pushing forward on that. That’s very progressive and speaks volumes to companies that are looking for relocations and just talks about the culture of a community,” Hall said.

Industrial recruitment could even occur right next to the station, which sits on part of a 27-acre site that was purchased by the city for economic development in addition to 90 acres north of the site extending to the airport that could also accommodate industry, Conner said.

Plans call for placing a separate boulevard off City Pond Road and Alcovy Road to provide a separate entrance to the area.

“As we continue to seek new corporate citizens for our community, we have to consider what those corporations and businesses may desire,” Conner said.

“You will see as we begin development, this will be an extremely attractive site and by placing the facility a few hundred feet up City Pond Road we could provide a convenient fueling facility for the city and I-20 traffic and maintain the original purpose of acquiring the property.”

Tolleson said he believes the CNG market is about to take off.

“I think this is the first step in many stations to come (around the state and country) and believe the price of natural gas is at a point where it will be stable for many years,” he said. “We believe transportation fuel is the next big opportunity for natural gas and is a good American story for American fuel, as we try to displace some of the foreign fuel used. That’s what really excited us the most.”