MORGANTOWN – Hope Gas and Quantum Pleasants recharged their dispute this week over Hope providing gas to the former Pleasants Power Station and the planned new adjacent Quantum Reformer Plant that will use natural gas to produce hydrogen for electricity generation at what Quantum calls the Old Plant.
The case is before the state Public Service Commission.
Case Background
The Old Plant was previously operated by Harbor Energy under lease from owner ETEM Remediation Two. Energy Harbor, Quantum said in its filing, bought natural gas from Hope for start-up use at the coal-fired plant.
Quantum bought ETEM and changed its name to Omnis Pleasants, which owns the plant and remains a Hope customer.
But Hope is unable to supply enough gas for the needs of Quantum Reformer and Quantum is pursuing talks with Texas-based Icon New Energy Pipeline, which plans to build a new line to serve the site.
State law – the Direct Use of Natural Gas Act, known as the unregulated bypass statute – allows a facility that has not previously been a natural gas utility customer, subject to certain criteria, to receive gas service from any company without PSC review or permission. The law requires the parties to provide notice of intent to the utility providing gas service in the area – Hope, in this case.
Hope said the plan is illegal because the plant is Hope’s longtime customer and except for being informed orally about the plan, Hope has not received the required formal notice.
Hope asked the PSC for a declaration that the plant is an existing Hope customer, and the plan is not eligible for the exemption provided by the unregulated bypass statute, and that the parties must serve the required notice before they either try to make use of the statute or begin permitting and construction.
Quantum moved to have the PSC dismiss the petition.
New arguments
Hope filed its update first, followed by Quantum’s response on Thursday.
Hope acknowledged it can’t supply gas to Quantum Reformer by the end of 2025, when Quantum wants it, but said it has needed time to prepare an application, if needed, to build additional facilities to serve the new plant. And quantum rejected a Hope proposal without providing constructive feedback on modifying its proposal.
Hope argues that Quantum Reformer will not be a new customer but, as it is owned by Quantum Pleasants, an existing customer. “The plant is simply expanding to facilitate a different method for using natural gas.”
Hope asserts that Quantum has made contradictory claims about its talks with Icon. One, Quantum and Icon haven’t finalized an agreement so Quantum can’t give adequate notice about its plans. But Quantum nonetheless claims that Hope’s proposal would be noncompetitive – without numbers to back that up.
And, Hope said, the Act applies only to natural gas produced in West Virginia. Icon will be tapping into the Rover Pipeline in Taylor County, which is an interstate pipeline, so the gas may not be in-state gas.
Hope restated its concern that losing Quantum as a customer will drive up rates for other customers.
Quantum argued on Thursday that Quantum Reformer is an entirely new $1 billion investment that will use natural gas for a new industrial process and not as fuel for the Old Plant. So, it qualifies for the unregulated bypass statute.
Quantum Reformer will produce hydrogen, (for the Old Plant) along with graphite and graphene, using natural gas. The Old Plant won’t need any more gas.
Quantum argued that if Hope gets its way, this could jeopardize future development of brownfield sites. “If a utility has historically served a customer on a parcel of land, and the historical facility is no longer in operation or even potentially in existence (torn down), Hope claims it has the exclusive authority to serve anything new that might be built on that land. If this argument is adopted, then the Direct Use of Natural Gas Act passed by the legislature means nothing.”
Quantum also argued that because Quantum Reformer is not an existing customer, it is not legally required to provide notice to Hope when it plans to switch to Icon.
And all the gas Icon will use will ship will come from the River Sherwood Lateral, which is 100% West Virginia gas.
Email: dbeard@dominionpost.com
