Sep. 17--FARMINGTON -- The city is trying to revive a prepaid contract for natural gas that stalled after city councilors approved it last year during the financial crisis.

About $700 million in bonds sold in conjunction with Las Cruces and Los Alamos utilities through the Royal Bank of Canada would raise funding to buy 30 years of natural gas supply from BP for Farmington and other communities. The discount would come from buying the gas in bulk.

Councilors discussed the deal at their meeting Tuesday. The city's Public Utility Commission will review the contract and make recommendations to councilors on how it should be changed at a meeting 7 p.m. Oct. 13.

City councilors originally approved the contract in October after investment banking firm Lehman Brothers Holdings failed.

The economic crisis ensued and the gas contract transaction could not be completed, Maude Grantham-Richards, Farmington Electric Utility System director, wrote in a letter to city councilors last week.

"The transaction was placed on hold until such time the market would recover," Grantham-Richards wrote. "A year later, even though there are glimpses of improvement in the financial market, the transaction as presented then is no longer appropriate for the current environment."

Electric Utility customers would save on their bills from a deal, Grantham-Richards has said.

John Gregg, a Washington D.C.-based attorney whom the city is paying $395 per hour to review the contract, has said

the city faced no financial risk.

Bond holders would assume risk instead, he told councilors Tuesday.

Councilwoman Mary Fischer was skeptical of the deal.

"Who are we expecting those bond holders to be? China?" Fischer asked.

Councilman Dan Darnell said in an interview he wanted to make sure there's no downside to the deal for the city.

"I'm satisfied at this point," he said.

Steve Lynn:

slynn@daily-times.com

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