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City council hears update on natural gas procurement, transition


The City of Las Cruces has more than 45,000 natural gas customers in Las Cruces and Doña Ana County, city Utilities (LCU) Director Adrienne Widmer told the Las Cruces City Council at its May 22 work session, as she updated the council on the city’s natural gas providers, carriers and costs.

The city built its natural gas system in 1935 and began providing service to customers in 1936, Widmer said. The city joined the Village of Hatch in a gas service association in 1969 that broke up in 2010 as the Hatch service was sold to Zia Natural Gas Company in Las Cruces.

The city’s natural gas system is today a nonprofit that relies entirely on the revenue it generates.

City gas service area includes 304 square miles. It has 42,605 connections in the city and 2,666 connections outside city limits. That total includes 12 industrial customers. The utility has 1,011 miles of gas lines, 91 regulator stations and a staff of 47 employees and four others on contract.

The utility’s 10 largest customers are New Mexico State University, Saputo Cheese, Memorial Medical Center, Olam West Coast, Inc. the City of Las Cruces, MountainView Regional Medical Center, Alaska Industries, NASA, American Linen Supply and Las Cruces Regional Medical.

The city received an American Public Gas Association (APGA) safety management excellence award in 2022, an APGA SOAR silver level award in 2021 and bronze level awards in 2020 and 2019.

It received a $10 million grant from the Natural Gas Distribution Infrastructure Safety and Modernization Grant Program that was presented by U.S. Secretary of Transportation Pete Buttigieg during an April visit to Las Cruces. The grant will be used for modernizing and rehabilitating the city natural gas system.

LCU has three natural gas suppliers: Shell Energy North America, New Mexico Energy Acquisition Authority (NMEAA) and Public Energy Authority of Kentucky (PEAK). LCU has prepaid orders with NMMEAA and PEAK and places orders with Shell each month.

El Paso Natural Gas pipeline company delivers 100 percent of the natural gas received by LCU, with 55 percent coming from the Permian Basin in southeast New Mexico and west Texas and 45 percent coming from the San Juan Basin in northwest New Mexico, northeast Arizona, southwest Colorado and southeast Utah.

The city paid nearly $7.4 million for natural gas in January 2023. Customers use more gas during heating season, November-March, than during the rest of the calendar year.

The cost of natural gas reached historically high prices because of colder-than-normal weather in the western United States, reduced gas flow from Canada to northern California and an interruption of gas flow from the Permian Basin during the winter of 2022-23, said city gas business analyst Mario Puentes.

The city council adopted the city’s energy transition plan in 2021, targeting a reduction in carbon emissions and the identification and prioritization of different energy sources that are economical and environmentally sustainable.