Since 1924, the Long Beach Gas & Oil (LBGO) Department has been a source of comfort and warmth. The utility says it provides natural gas to residents and businesses in Long Beach and Signal Hill, Calif., that keeps homes warm, and provides heat for cooking and hot water.
LBGO, which was established in 1924, delivers gas through more than 1,800 miles of pipelines. “We’re the fifth-largest municipal gas utility in the United States,” Department Director Christopher Garner says, adding that the utility also has earned a customer satisfaction rate in Long Beach that is “well above 80 percent.”
LBGO also says its rates for gas services have resulted in the lowest average residential gas bills in Southern California. “As the citizens of Long Beach are also the owners of our gas utility, our revenues provide not only our gas services and maintenance of our pipeline system, but are also used to help pay for vital community services such as police, fire, parks and library services,” it adds.
Garner says LBGO also sets itself apart from other utilities by taking part in oil production. LBGO is the trustee of four man-made oil islands that were built in the early 1960s.
“They’ve been pumping oil offshore ever since,” Garner says, noting that LBGO has a contract with Occidental Petroleum Corp. to perform the actual production. “Last year, the net revenue [from the oil] we transferred to the state of California was somewhere around half a billion dollars.”
LBGO also operates the Southwest Resource Recovery Facility (SERRF), a solid waste management facility that uses mass-burn technology to dispose trash. “In an environmentally safe and responsible manner, the solid waste is combusted in high temperature boilers to produce steam, which, in turn, is used to run a turbine generator, producing electricity,” the utility says.
“[We] generate 37 megawatts per day,” Garner adds, noting that the electricity is sold to Southern California Edison, an electric utility that serves more than 180 cities.
A unique business
A native of Long Beach, Garner began working for the city in 1984 and joined LBGO in 1987. “I’ve been the director for 11 years now,” he says, noting that he enjoys the unique aspects of operating the utility. In addition, Garner says he enjoys the process of negotiating with private companies so LBGO can get the best deals possible. “We’ve been very successful at that,” he says, adding that the utility was innovative in its recent negotiations with Occidental Petroleum Corp.
LBGO previously utilized a cost-plus model, but “we’ve negotiated a new deal where it becomes more of a partnership and a profit-sharing mechanism,” he says. “It gives the incentive for Occidental Petroleum to invest their own capital into the production.”
Garner sees continued potential in LBGO’s gas and electrical businesses. The utility expects to maintain its leadership position on the gas side, and “on the SERFF side, you’re going to see the landfills closing in Southern California,” he predicts. “The value of having our own trash and energy power plant is going to [grow].”
