Marietta’s plan to provide natural gas service is, for now, dead.
The city’s Board of Lights and Water voted unanimously Wednesday not to appeal a Georgia Court of Appeals decision scuttling the planned Marietta Natural Gas to the Georgia Supreme Court.
But Mayor Steve Tumlin, who also chairs the BLW, said the city will consider restructuring the natural gas plan in a form that can survive legal challenges from other providers.
“This does not preclude examining what we’ve learned in the last year and a half and trying again,” he said. “I think there’s still some room to be a marketer, but we have to end this one and move on.”
The city registered Marietta Natural Gas LLC in October, 2016, as an entity wholly owned by the city’s Board of Lights and Water.
A group of natural gas marketers — Infinite Energy, Inc., SCANA Energy Marketing Inc., Southstar Energy Services LLC, Georgia Natural Gas and Gas South — have been fighting against the LLC. First, it was with the Georgia Public Service Commission, which agreed with the marketers. Then, the issue came up in Fulton County Superior Court, where Judge Craig Schwall ruled in favor of Marietta. But Monday’s Court of Appeals decision marked the end of the road for Marietta Natural Gas LLC.
The court said in its decision that according to the city charter, the BLW has the authority to create a non-profit organization, but acted beyond its authority in creating an LLC.
“I think it’s clear that the appeals court has a point, that the BLW is a nonprofit, and therefore, for a whole lot of reasons, there’s a lot of restrictions on creating an LLC, which is for-profit,” said BLW board member Terry Lee at Wednesday’s special-called meeting.
But the board could consider reforming a natural gas company as a nonprofit rather than an LLC, which could solve the court’s issue with it. Another potential fix might be to have the LLC tax itself as a nonprofit.
Neither of those solutions were discussed at Wednesday’s meeting, and Tumlin said it could be a while before the issue comes up again while the board tries to craft an approach that meets legal scrutiny.
“I would like to use my eyes and ears and everybody on the board’s, it might even be worth it to just talk to the (Public Service Commission),” he said. “The PSC still has to approve. I would say it would be several months before we bring it up again.”
The marketers previously used other arguments against Marietta Natural Gas. Previous arguments have focused on matters such as the legal definition of a person and whether or not a municipality like Marietta has the authority to operate a for-profit natural gas marketer.
Lee said the fact that the court did not rule either way on any of those other subjects leaves him optimistic.
“The argument used by the appeals court, for the ones arguing against us, this is a new argument, it’s the first time they’ve brought it up,” he said. “If I was on the other side and I found a technical loophole, I would have used it before now. The appeals court is the one who brought it forward. Those who were arguing against us never said anything. So it’s not a clear defeat, I would say, and a lot of issues, they did not even comment on. They just focused on the one issue, which leaves us hope, I would say.”
Tumlin also suggested the state’s large providers will go all out to avoid what they see as competition in the market.
“Stopping us is the No. 1 priority of a lot of good folks,” he said.
“SCANA and all the rest,” Lee said.
“We want to make sure when we go in, we have learned from this process,” Tumlin said. “And I think we’ve got a chance. The first thing to do was to stop the bleeding, so to speak.”