PUC okays gas delivery

Susquehanna County residents will finally be able to tap into the area’s abundant natural gas supply. Leatherstocking Gas Company gained PUC approval to establish local gas service in the Montrose, Hallstead-Great Bend, New Milford and Susquehanna areas. Construction of the local distriburtion network is expected to begin in 2013.

BY STACI WILSON

Although Susquehanna County is home to some of the most prolific Marcellus shale natural gas wells, residents have not been able to take advantage of the local fuel source.

That will change next year.

On Thursday, the Pennsylvania Utility Commission (PUC) granted franchises in the area to a local distribution company.

Leatherstocking Gas Company LLC, a collaboration between Corning Natural Gas and Mirabito Holdings, was given the nod to provide service in about 210 square miles of Susquehanna County. Construction of the distribution lines is expected to begin in 2013.

PUC officials issued written statements which said, in part, that local gas for local customers is a great idea, and that it is a “win” for businesses and residents in the application territory.

Leatherstocking Vice President of Marketing Russell Miller said, “We’re all very elated, very happy excited about prospects going forward.”

Miller said the company was appreciative of the support received from local legislators, county commissioners and the Progress Authority, the agency which handles the county’s economic development activities.

For several months, Leatherstocking representatives have not only met with elected officials but have also spoken with business owners and residents about the prospect of natural gas service in the area.

“It’s been a long process but a positive process,” Miller said. “Everyone we spoke with in Pennsylvania was positive about what we wanted to do.”

Leatherstocking’s PUC application was initially challenged by another gas distribution company, UGI. UGI then also filed for franchises in the same area but later withdrew those.

Anthony Ventello, executive director of the Progress Authority, said, “This is everything we want with looking at the value-added use of gas.”

“This gives us the opportunity for business development, energy generation and home use,” Ventello said. “Now we can add value to (the natural gas) locally beyond landowners and business-to-business opportunities.”

Ventello said on the economic development front, the Progress Authority would be looking at small generation facilities that could be attractive to companies who use electricity.

Ventello said he was most pleased with Leatherstocking’s philosophy of the “first gas through the lines goes to the local demand.”

And now that Leatherstocking has been granted the franchises, Miller said the company feels obligated to the area – “to deliver on what we’ve promised we do.”

That sentiment was echoed by Leatherstocking CEO Mike German who said, “The level of support provided by the community has been outstanding. We feel obligated on a personal level to provide gas service as quickly and economically as possible”.

“We’re excited but know we’ve got to step up to the plate now and make sure we do that in the right fashion,” Miller said.

Those promises include a five-year build out plan.

Miller said Leatherstocking will begin by talking with “anchor customers” in the franchise area. Anchor customers are the big users of natural gas, like hospitals, schools and businesses.

The franchise area includes the townships of Bridgewater, Forest Lake, Great Bend, Harmony, New Milford and Oakland and the boroughs of Great Bend, Hallstead, Lanesboro, Montrose, New Milford, Oakland and Susquehanna Depot.

Those anchor customers will determine where the first build out is going to be, Miller said.

Leatherstocking will also start canvassing residential and smaller use customers in the townships and boroughs.

Distribution lines to residential area will be driven by the number of applications Leatherstocking receives.

Miller acknowledged the price of conversion could hinder some consumers from switching over to natural gas.

Legislators are looking at ways to make the conversion more economical. Miller said Leatherstocking reps would be attending a meeting with other Pennsylvania utilities on how to make conversion to gas more affordable across the spectrum.

Ventello said the state should provide some incentive to make converting to natural gas is more attractive.

He also spoke about the potential cost savings to taxpayers.

At the school level, Ventello said, converting to natural gas could potentially save a district up to about $100,000 a year.

That amount, he added, could translate into saving districts money, enabling them to maintain jobs.

“A lot of jobs can be supported by getting good, clean, cheap fuel,” Ventello said. “Over the years, we’ve had discussions with companies about what their major impacts are. Now, it’s energy impacting their bottom line. We hear it all the time.”

Between now and when the construction work begins, Miller said Leatherstocking will be working to make sure it’s in compliance with all PUC rules for small, natural gas utility companies, as well as making sure everything is in place to meet reporting requirements and training.

Leatherstocking has also promised to open a local office for its Susquehanna County customers and is the process of looking at sites that would meet its needs.

The company currently has gas supply agreements in place with Cabot Oil & Gas and Williams. The company plans to continue to expand its support portfolio in the region with other producers and energy marketers.

Leatherstocking CEO Mike German stated “the level of support provided by the community has been outstanding. We feel obligated on a personal level to provide gas service as quickly and economically as possible”.

Leatherstocking currently has gas supply agreements in place with Cabot Oil & Gas and Williams. The company will continue to expand its supply portfolio in the region with other producers and energy marketers. The LGC system will be an open access system that provides customers to opportunity to purchase gas supplies from the most economical provider.

Leatherstocking was formed as a joint venture between Corning Natural Gas and Mirabito in Nov. 2010 with the purpose of providing natural gas distribution service to currently un-served or underserved regions of central New York State and the northern tier of Pennsylvania.

The company currently has six municipal franchises in central New York along the I-88 corridor. Corporate headquarters are currently located at 49 Court St. Binghamton, N.Y.