Highlights from the Natural Gas Extension Services Public Hearing

On April 11, the Center for Rural Pennsylvania sponsored a public hearing on delivering local natural gas to rural consumers. The hearing was hosted by Sen. Gene Yaw, chairman of the Center's Board of Directors, along with Representative Garth D. Everett, Center board member, and Representative Tina Pickett, at the Wysox Volunteer Fire Hall in Bradford County.

The focus of the hearing was to discuss the advantages and challenges of providing natural gas service to those who are currently unable to obtain and use this fuel type in rural areas. 

"There is widespread interest in seeing locally produced natural gas used locally to benefit our area businesses and homeowners," Yaw said. "We have an abundant natural resource in our region, which can be used to help consumers lower their energy heating costs. Being able to fully use this commodity would mean a great deal for rural residents."

Those providing testimony were Tony Ventello, executive director of the Center Bradford Progress Authority; Thomas Murphy, extension education and co-director of Penn State’s Marcellus Center for Outreach and Research; Terrance J. Fitzpatrick, president and CEO of the Energy Association of Pennsylvania; Ross H. Pifer, clinical professor and director, Penn State Ag Law Resource and Reference Center; Allen Westbrook, vice president of Marketing for UGI Utilities, Inc.; Michael German, CEO and president of Corning Natural Gas Corporation/Leatherstocking Gas Company, LLC; and Sonny Popowsky, consumer advocate with the Pennsylvania Office of Consumer Advocate.

According to Murphy: "Utility companies are reporting that in areas of the state where there are natural gas distribution lines already in place, conversions of residential heating systems to natural gas have been robust. Demand for distribution line extensions has been growing."

Westbrook said that Pennsylvania's largest gas utility, UGI Utilities, Inc., saw significant growth in 2011 with 10,495 new residential heating customers, 7,362 of which converted to natural gas. He noted that 80 percent of those customers had switched from oil to natural gas. In addition, those customers have seen a $1,500 average savings per year by converting.

Westbrook also discussed the costs associated with expansion, which can be between $250,000 and $1 million for placing a main line in/along highways or tapping into gathering lines.

Popowsky said: "There is a reason why many rural areas do not have natural gas service. That is because even if the price of natural gas is cheap, the price of building pipelines to sparsely populated areas is very costly. Clearly, it is more economical to serve 100 or 1,000 customers off of a particular length of pipeline than it would be to serve 10 or 20."

Providing incentives to develop infrastructure allowing for future growth was also discussed during the hearing. Options included a Growth Extension Tariff for Gas (GET Gas), Municipal Cost Participation, as well as directing county and/or municipal Act 13 revenues to natural gas infrastructure development. 

To see a video of the hearing, visit Sen. Yaw’s website at http://senatorgeneyaw.com/.

Left to right: Rep. Tina Pickett; Sen. Gene Yaw, Center board chairman; Rep. Garth Everett,
Center board member; and Barry Denk, Center director.

Thomas Murphy of Penn State’s Marcellus Center
for Outreach and Research.

Terrance Fitzpatrick of the Energy Association of Pennsylvania.

Ross Pifer of Penn State Ag Law
Resource and Reference Center.

Allen Westbrook of
UGI Utilities, Inc.

Michael German of Corning Natural
Gas Corporation/ Leatherstocking
Gas Company, LLC.

Sonny Popowsky of the
Pennsylvania Office of
Consumer Advocate.