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Mountaineer Gas plan to extend distribution lines moving ahead slowly


The State Journal

CHARLESTON, W.Va.  — A natural gas distribution line that would provide additional capacity for business and residential development in the Eastern Panhandle is likely at least a year away from construction.

Mountaineer Gas has the Public Service Commission of West Virginia’s permission to proceed with the first phase of the service extension, a 22-mile line from the end of the existing system just north of Martinsburg to Berkeley Springs. Segments 2 and 3, which will accommodate future development in Jefferson County, will require additional PSC approval.

Mountaineer must obtain regulatory approvals for the first segment before any dirt is turned.

But Mountaineer’s senior vice president, Moses Skaff, said if all goes as planned, workers can begin construction in the first quarter of 2018.

“It’s important for several reasons,” Skaff said. “First, our basic mission is to provide safe, reliable natural gas service to customers, communities and the environment. Right now, (there’s only one feed). If something would happen to the gas supply coming from the south, we would have no gas in the Martinsburg area. Hospitals, schools, businesses would have to curtail use. That hasn’t happened, but it’s not a situation you want to be in.

“So the first thing, from a safety standpoint, is the extension would provide a two-way feed — one line from the north (Segment 1) connecting to the existing distribution line coming from the south, so we’d have gas supply coming from the north and south, making a dual feed, or dual source, supply line.

“Second is the economic impact it will have on the Eastern Panhandle: It’s a game-changer. Having a dual feed, having more capacity, opens up the entire panhandle — Morgan, Jefferson and Berkeley counties — for development opportunities they’ve never had before.”

Mountaineer is a natural gas distribution company, not a producer.

“We do not drill, we do not transport high-pressure gas,” Skaff said. “We simply deliver the product to customers. Therefore our ‘pipeline’ is a lot different than the pipelines companies like EQT and Dominion are building.”

He said they’ll use 10-inch steel pipe buried at least three to four feet underground, more when the terrain or other factors warrant. Lines under river beds would be buried 30 feet below the surface, for instance.

“This is our business; this is all we do,” he said. “We put in distribution lines.”

Segment 1, the Martinsburg-to-Berkleley Springs line, will cost Mountaineer Gas about $30 million. Segment 2, covering about 24 miles, will extend from the southeast side of Martinsburg to Charles Town and then west to Middleway, where it will tie into an existing line, and then from Middleway northeast to Kearneysville. Segment 3, about 4.5 miles, will extend from the east side of Martinsburg to Shepherdstown.

The total cost of all three extensions is projected at $30 million.

Skaff said Mountaineer Gas was asked by Gov. Earl Ray Tomblin’s administration and local economic development groups about two-and-a-half years ago to extend lines in the Eastern Panhandle, where Procter & Gamble’s massive $500 million plant is being built. The plant has more than 1 million square feet under roof and will employ about 300 people to start, but when it’s fully operational will have a workforce of about 700.

It became doable in 2015, after the Legislature passed Senate Bill 390. SB390 allows companies to expedite the cost recovery of projects that replace, upgrade and expand natural gas utility infrastructure, provided they are “just and reasonable and in the public interest.” Lawmakers said the measure would create jobs, “provide for continued and enhanced safety and reliability of aging natural gas infrastructure, provide for more economic natural gas utility service and provide natural gas utility service to new customers in areas of the state that are unserved or underserved.”

Skaff said the new P&G plant will consume much of the system’s existing capacity, “but it’s going to bring a lot of cottage industries with it.”

“Along Segment 1, we already have letters of interest from U.S. Silica and local industries, hospitals, businesses, the school board,” Skaff said. “Whether it’s an industry or a hospital setting or a public entity, the impact of providing low-cost natural gas resources brings more economic impact to communities. It’s not just the taxes we’ll be paying; it’s being able to build more things and expand.”

Skaff sees the project as a “home run,” spurring development while ensuring a backup source.

“A lot of people say you can’t work with state government. You can’t work with the state of West Virginia,” he said. “But think about it — the Legislature is on board, the local economic development groups are on board, the PSC is on board. We’re the conduit to make it happen.

“It’s pretty rare to get all those stars to align. People ask, ‘Why now?’ It’s because all the stars are aligned. The biggest ‘why’ is availability and supply of natural gas and the cost of natural gas. Cost is at an all-time low now. We’ve got a very good consumer product — low-cost, high-efficiency energy, and it’s clean. It’s good for our customers.”

Even though it still has to get regulatory approvals, Skaff said Mountaineer is already lining up rights of way for the Martinsburg-to-Berkeley Springs extension.

“We have about 147 tracts we need to get rights of way for,” he said, pointing out in some cases one person owns more than one tract. “We have close to 75 percent of those already optioned, they’re already available to us. We’re pleased with the response.”

Skaff said they hope to start construction in the first quarter 2018 “and, hopefully, start providing service late in 2018 or the first quarter of 2019. We can move that fast, once we get all the approvals done.”

“We’re ready to go,” he added. “We’ve researched this project. We can start without a full commitment because we have the route locked in.”

He said Mountaineer Gas rarely resorts to eminent domain, adding he can recall it being used only once in the 25 years he’s been with the company “and even then it didn’t get to court, it was settled before.”

“If a (company) is going into a community and wants to get business, why would you intentionally or unintentionally make the customers you’re going to rely on for business mad?” Skaff asked. “You would do everything possible from a consumer standpoint to work with them.”

Once the Martinsburg-to-Berkeley Springs segment is done, he said they’ll go back to the PSC for Segments 2 and 3, which will be accommodate residential as well as industrial customers.

“We can’t do Segments 2 and 3 unless we complete Segment 1,” he added. “We need the extra capacity from the north (first). There’s no other way to get an additional supply to this area other than coming from the north, there’s no other line they can connect to.”

He also said they’ll have to “move expeditiously” in order to recoup the $30 million they’re spending on the first extension.

“We have to get more customers online, get gas pushing through to customers to do that,” he said. “It doesn’t behoove us not to do the other segments expeditiously.”

The project isn’t without its critics, though. Environmental groups fighting to block construction of pipelines question the route Mountaineer has plotted for its extensions as well as their impact on property values and land uses. Eastern Panhandle Protectors, a group committed to “Keeping West Virginia Wild and Wonderful,” cites pipeline safety concerns and questions why the route will “go under a popular park, along a well traveled highway, past three schools and through countless residences and farms.”

EPP members also are concerned Mountaineer might use eminent domain to acquire tracts and voiced concern a new piece of legislation, Senate Bill 245, introduced Feb. 10, would allow natural gas companies to go on their properties without the owner’s consent provided they attempted to obtain permission.

Mountaineer said it does regular visual inspections coupled with state-of-the-art technology and instrumentation to monitor the lines, plus pipeline markers to identify the location of the lines. The company also insists its pipeline operates at much lower pressure than a transmission line, and industry experience “is that by operating distribution at lower relative pressure, if an incident were to occur, the pipeline would leak rather than rupture.” A handout prepared by the company said over the past 20 years, “less than one ‘significant incident’ a year occurs on West Virginia distribution systems … (incidents) are typically related to older pipelines that were not installed according to today’s standards and requirements (and) are often the result of third-party damage.”

“… People say pipelines aren’t safe,” Skaff said. “Any energy source has some issues, but in our experience, where we’ve experienced problems in our system the problem has not been with our system — it’s been with other people hitting our system — so we must be doing something right.”

Mountaineer Gas is the state’s largest natural gas distribution company, serving about 220,000 of the 385,00 gas customers in West Virginia. With roughly 6,000 miles of natural gas distribution pipelines in West Virginia, the company operates in 49 of West Virginia’s 55 counties.

Headquartered in Charleston, the company has about 460 employees.

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