dbeard@dominionpost.com
MORGANTOWN – Hope Gas has spelled out to the Public Service Commission its farm tap plan – its plan to abandon its Red Lines and convert up to 629 farm tap customers in 22 counties to propane or electricity.
Jeffrey S. Nehr, Hope’s senior vice president for Gas Supply and Corporate Development, provided testimony and a 10-page outline to the PSC on Tuesday. He said Hope proposes that the PSC grant its request subject to the processes Hope outlines.
While not calling it a pilot program, as PSC staff recommended, Nehr said Hope’s plan is similar in ways and will unfold gradually, and the company will provide annual filings to the PSC.
“Hope will be transparent by its annual filings and present specific information about the Red Lines to be abandoned and customers to be converted during an upcoming annual period, and will require Hope to file a post-period report on what work actually occurred during that prior annual period,” he said. “Hope’s and staff’s approach recognize the reality that Red Line abandonments and customer conversions do not occur overnight; rather, they require planning and time as Hope has always stated and expected.”
While Hope will maintain communication, he said, the plan won’t require additional PSC proceedings.
Nehr talked about questions that arose at the three recent town hall meetings held to explain its plan. Residents would not clear about how conversion to propane would affect their bills, as propane costs more than natural gas.
He told them that their propane supply would be subsidized and blended into Hope’s overall rate structure – spread across all ratepayers. When he explained that, he told PSC, “there was great relief.” Hope opposes a Consumer Advocate Division suggestion that the new propane customers pay a higher separate cost to avoid subsidization by other customers.
Hope will provide the new customers a choice of replacement propane appliances, and propane-fueled backup generators, and cover those costs, he said.
The company will meet with each customer before starting anything, he said, to determine what alternative fuel options exist for them.
Nehr previously outlined three options for free gas customers, and restated them on Tuesday: The producer supplying the free gas can acquire the Red Line in question; the producer can move the customer to another line it already owns; or the customer can apply to become a Hope customer with propane service.
For those who choose the third option, he said, the producer should bear the conversion costs and the propane supply costs.
“Hope and its customers should not be required to bear the costs to convert a free-gas consumer to an alternative energy source; particularly so where the producer with the free-gas obligation rejects the first two options,” he said. “In other words, the free-gas consumer continues to receive ‘free’ service but Hope’s bill for that service recognizes that it is the producer who is obligated for that service and must pay Hope for it.”
The process outline explains that Hope will abandon Red Lines in three states: lines with no farm tap or free gas customers; lines with farm tap and free gas customers but no production connections; lines with farm tap and free gas customers and production connections.
Within 60 days of a PSC order granting permission to abandon the lines and begin converting customers, Hope will submit an initial report for the immediate 12-month planning period that indicates which lines will be abandoned.
For farm tap customers, Hope will meet with qualified propane service companies to develop plans, including such things as storage tanks and transportation issues. Hoe will also work with replacement appliance providers. After it meets with these providers, it will then meet with customers to present their options to them.
“Hope and the Customer shall discuss and together reasonably determine the option to be implemented and a reasonable timeline for implementation of the conversion.” Hope is covering the costs and recognizes that the best option may not be the cheapest. Customers will be able to choose the most suitable appliances from the available options.
The plan notes that Hope will not begin a conversion unless it can be completed by Oct. 1 of the year in question, so that the customer is not deprived of heat during the winter heating season.
Hope Gas is proposing to abandon in place or transfer to other companies the Red Lines – that it previously acquired from Equitrans and Dominion Gathering and Processing. Hope bought about 3,000 miles of pipeline, it said, with about 14,800 farm-tap customers.
Hope said some of those lines – about 1,068 miles – are no longer necessary or useful, and that providing safe, reliable, economic service to the farm-tap customers along those lines is in jeopardy because existing service “is either unsafe, unreliable, uneconomical, or any combination of the three.”
