The Birmingham age-herald., 1920-08-12
INITIAL PRICE

The initial price is to be reduced to
 so cents net within a comparatively
 short period and it is predicted that
 there will be a series of progressive
 reductions in the course of time fol-
 lowing the organization of the Bir-
 mingham Railway, Light and Power
 Company and more permanent ar-
 engagements than are embraced in the
 contract to be entered into today.
 The contract is to be for three years.
 A longer term than this was not deemed
 advisable by the city prior to re-organ-
 ization of the utility, which is in tho
 hands of receiver.
 The Sloss- Sheffield contains 51o to 525 British thermal heat units com pared with 4s5 units in the compost tion of other makes by-product gas manufactured in the district. This Is understood to be due to the construc- tion of the Sloss- Sheffield ovens and other elements entering into the opera tion of that by-product plant. CHESTERFIELD GAS In order to obtain the Sloss Sheffield gas. it is necessary that a pipe line be constructed to the by-product plant. This will cost in the neighborhood of $200.o0 to $300,000 It was the extra cost of reaching this gas compared with one half to one-third of the cost neces- sary to reach the gas of the Tennessee Coal Iron and Railroad Company at Fairfield that at one time to initiate against hitching on to the s-Shef- field plant. The cost of the pipe line will be financed outside the Birming ham Railway. Light and Power Com pany and that recoupment of this cost will be met by the utility's setting aside for sinking fund certain amount of the receipts from each 1000 feet Of gas served to the public.
 It is to meet this special cost that the initial price of the gns has been fixed at ss cents. As soon as returns from the use of ,he gas begin to show the wearing away of the investment in the pipe line, the reduction to sO cents net will he made. That is, expected to come in . year or eighteen months at the outside.
 AMPLE SUPPLY The surplus gas of the Sloss- -Shef- field Company amounts to around 1000, 900 cubic feet The daily con- der 2.000.0O0 feet. The Sloss- Sheffield supply will be ample for the require ments of the city for years to come. The position of the Tennessee Coal. Iron and Railroad Company in the matter has always been that of no, desiring to supply the city with by product gas, but of being willing to s other arrangements were not made.
 The Tennessee company not only has needs for all the gas. which issues from It's own by-product ovens. but it also uses the gas generated by the Semet Solvay ovens nearby and was
 recently in negotiation for a further
 outside supply of by-product gas for
 it's extensive operations at Ensley and Fairfield. The Tennessee company would not have consented to enter into
 more than a very brief contract to
 bridge the city over a difficult situa- tion.
 The Birmingham, Railway. Light and Power Company has made ar- engagements for sufficient gas oil to
 continue the manufacture of gas at
 the present plant pending the build ing of the pipe line to the Sioss- Shelf field ovens. which may require several months.
 The city's gas contract with the Bir- mingham Railway. Light and Power Company terminated on August l, and 1t was necessary to arrange for new supply. Incident to the increased cost of gas oils, coke and other elements entering into the manufacture of the gas at the present plant, the company would have been compelled to greatly increase the cost to consumer If 1t were to come out even on the produc- ton. It was this situation that led to the arrangements extending over period of months. for by-product gas.
 GOOD FOR CONSUMER
 The contract is regarded as one that is good for the utility. but 1t is also regarded as good one for the con sumer, because it Is believed the by product gas will be found satisfactory: 1t will be cheaper than the gas now being used and much cheaper than the gas that would have been supplied by the present plant besides being des- tined to progressive reduction as time goes on.
 General comment has been favorable
 to the by-product gas, and the only
 ro1rat hAard exnressed ia that Rir-