— The area is looking at an economic boost if a $45 million expansion of Mountaineer Gas distribution lines is approved.
Mountaineer Gas recently filed an application with the West Virginia Public Service Commission (PSC) for distribution line expansion in Berkeley, Jefferson, and Morgan Counties. The company expects a decision from the PSC in November, after public hearings are held in October, said Moses Skaff, Mountaineer Gas senior vice president.
“The original decision date was pushed back from mid-August because we’re waiting on a commitment from Columbia Gas [in Maryland] to deliver the gas,” he said.
John Reisenweber, executive director of the Jefferson County Development Authority, is very pleased that Mountaineer is moving forward with the expansion. “We have been overlooked for projects because our county doesn’t have natural gas,” he said. “The county undertook a feasibility study a couple of years ago to look at what it would take to get gas into Jefferson County; that study helped demonstrate the need for expansion.
“For example, Procter & Gamble turned down Jefferson County because we couldn’t check a box for baseline infrastructure. It’s a competitive issue. We’re at a disadvantage.”
According to Reisenweber, the Panhandle is the most economically viable part of the state because of its proximity to the D.C. markets.
“We compete with Pennsylvania, Maryland, and Virginia,” he pointed out. “This part of West Virginia is the most strategic location in the Mid-Atlantic. Even the topography is more conducive than other parts of the state; it’s not as rugged, so it’s less expensive to build here.”
Andy Blake, Ranson city manager, also supports the project.
“The Ranson City Council has a record of supporting natural gas,” he noted. “Potential parties are interested in coming here, and one of their requirements is natural gas.
“One reason is because natural gas is more energy efficient, and thus cheaper, to use than electricity. For example, a pizza franchise located here and when they got their first propane bill, it was six times higher than their natural gas bill for their location in Winchester. It affects a company’s bottom line.”
Bill Clark, executive director of the Eastern Panhandle Regional Planning & Development Council, Region 9, said 700 jobs will be created by Procter & Gamble’s arrival to Berkeley County.
“Procter & Gamble is the kind of company you dream about having in your community,” he emphasized. “It has a great reputation in terms of treating its employees fairly; the whole region will be improved because of it.”
Jackie Roberts, the director of the West Virginia Consumer Advocate Division, supports the project because it would give consumers a second source of less expensive energy.
“Right now, we have natural gas access from the south, but this system would give us access to shale gas from the north and loop their system,” she said. “If something happens to the southern supply, customers wouldn’t be without gas. This would allow West Virginia to take advantage of the lower cost of shale gas, since it’s more expensive to bring gas up from the Gulf of Mexico.”
Skaff calls the expansion project a game-changer for the entire region. “It will bring larger commercial customers to the area, and current manufacturing companies that are already looking to sign on.
The project would be in two phases, he said. “The first phase would be a distribution line coming from north of Berkeley Springs near the Maryland/Pennsylvania state line. Our distribution line would run twenty-seven miles down through the northern end into Martinsburg.
“Phase two would be what we’re calling a distribution system loop line: a twenty-nine-mile distribution line from the south from Martinsburg into Jefferson County, through Charles Town, to Middleway, and then Shepherdstown. The line will loop around other counties and townships and connect the dots from Berkeley Springs. We call it a two-way feed that creates a redundant amount of gas for that area.”
Mountaineer Gas estimates that if the plan is approved, a typical residential customer would see a rate increase of $0.72 per month ($8.60 annually) in 2017—plus, an additional $1.14 increase per month ($13.70 annually) in 2018.
“These are the current estimates, but the company expects that the rate changes will be less than that,” said Larry K. Meador, a Mountaineer Gas Company representative.
For Mountaineer, there are financial incentives for this project that would stem from recently enacted legislation—namely, Senate Bill 390—that would allow the company to recoup its infrastructure expansion expenses. The bill authorizes the commission to “… approve expedited cost recovery of natural gas utility infrastructure projects seemed just and reasonable and in the public interest.”
Skaff added, “We will be able to pay our expenses for construction over a longer period of time since the project will take longer than initially planned.”
According to Cathy Kunkel, an energy analyst with the Institute for Energy Economic and Financial Analysis, Mountaineer Gas would be able to recover more than at least part of its investment in infrastructure expansion.
“Mountaineer Gas has applied to the PSC to recover the cost of this project through rates, including a 9.75 percent return on equity to the company’s shareholders,” she explained. “Mountaineer would not be proposing this project if they didn’t think they could get full cost recovery and a return, and not just recoup just part of its investment. Mountaineer’s initial application to the PSC indicates that the company is currently 47.978 percent debt and 52.022 percent equity, and the interest rate for the debt is a bit more than seven percent—and they want a 9.75 percent return on equity.”
The Other Side of the Conversation
Is natural gas the safest energy option for the Panhandle?
“Natural gas is an environmentally friendly fossil fuel that we need in the Eastern Panhandle in order for us to continue to grow and prosper from an economic perspective,” said Reisenweber.
And this expansion is less invasive than transmission lines, Skaff reiterated. “Distribution lines won’t be as disruptive to a community because they are smaller in diameter and have less capacity and pressure than transmission lines. The largest our pipeline would be is twelve inches wide. Because of this, we’ve been getting right-of-ways with little resistance.
“Mountaineer Gas is doing this after requests from communities. Economic development groups from Morgan, Berkeley, and Jefferson Counties came to us saying they were missing out on business opportunities for lack of natural gas. The only way we’d venture into this is if the community was engaged and involved.”
But while the county economic development authorities think the expansion would be a well-needed boon to the area, an environmental group leader calls it a short-term fix that would create problems down the road.
Ben Luckett, staff attorney for Appalachian Mountain Advocates, said the touted environmental advantages of natural gas don’t add up when you look at its entire life cycle. In addition, he stated that its expansion would only further the state’s reliance on fossil fuels.
“We see climate change as the most pressing problem on a large scale, and we see multiple missions of billion-dollar investments into natural gas infrastructure in West Virginia—which is leading us down a path of continued reliance on fossil fuels. The technology is there for us to get away from fossil fuels—to move into renewable energy like electric, solar, and wind.
“It’s true that natural gas plants release less carbon than coal, but on the life cycle, they are close—all the way from the drilling, transmission, and burning of the gas. Natural gas is a better alternative when you just consider burning it; it produces less carbon dioxide. But through the fracking, there’s an incredible amount of leakage of methane. This is true even with newly built pipelines, and the problem is worse with challenging terrains.”
Luckett added that landowners don’t really have a choice about whether to give right-of-ways.
“If approved by the government, this project would give Mountaineer imminent domain,” he assured. “Mountaineer is required to negotiate in good faith with landowners, but it is like ‘give me right-of-way now and I’ll give you a good deal’ or ‘don’t give me right-of-way and I’ll get imminent domain and I’ll give you a bad deal.’ It’s negotiating with a serious arm twist.”
He also highlighted the impacts on water, as well as long-term effects on communities.
“From an environmental standpoint, we’ve seen significant problems with construction resulting in sedimentation in streams, especially if it’s on steep slopes. This affects aquatic life and drinking water. And it results in forest fragmentation.
“In the last couple of years, we’ve seen an explosion of natural gas infrastructure projects coming out of West Virginia and Pennsylvania, radiating in all directions. As more projects are proposed into more and more areas, we’ve seen an incredible amount of public pushback. There are short-term economic benefits to pipelines, but is it a sound long-term strategy? The short-term economic benefits are outweighed by the environmental harm and societal harm, including lowered property values, requirements for emergency plans, and reduced tourism.”