PSC approves natural gas franchise for North East
— The Maryland Public Service Commission approved a franchise agreement June 8 that will allow Chesapeake Utilities to extend natural gas to the town of North East and west on Route 40 to Mountain Hill Road.
“I really appreciate Chesapeake Utilities for leading the way,” County Council President Robert Hodge told Vince Fiorelli, a representative of Chesapeake Utilities, at a county work session prior to the PSC approval.
The recent PSC approval will become final July 8.
“We are ready to start taking applications for new customers in the North East area,” Fiorelli said.
The franchise approval with the town of North East was the missing link needed to continue extending natural gas lines west of Mechanics Valley Road on Route 40, which is the county’s designated growth corridor for economic development.
The town of North East approved the franchise agreement in February after nearly two years of negotiations were resolved with assistance from Councilman Alan McCarthy.
“I think this is the best deal for us,” McKnight said in February when the town board unanimously proved the franchise.
Chesapeake Utilities completed extension of a 12-inch gas line from Nottingham Road on Route 40 west to Mechanics Valley Road on Route 40 two years ago. Meanwhile, it has acquired customers along the line, most recently signing up Royal Farms at the corner of Route 40 and Mechanics Valley Road.
“Businesses and homes can reap significant fuel savings by converting from oil or propane to natural gas,” Fiorelli said.
He is currently working with the Homeowners Association at Courts of Mallory, a residential community off ap- Mechanics Valley Road near Route 7, to accept applications from homeowners.
“I’ve also talked with the schools and some of the businesses,” he said, noting that several business owners are interested in getting natural gas to their property.
“Woody’s in North East, Gary Stewart, owner of Principio Business Park, and Jim Whitter, manager at Quikrete plant on Mountain Hill Road, are all very interested,” Fiorelli said.
However, Fiorelli cautioned that a project of this size takes months of work, even years sometimes.
“Our goal is to acquire as many customers as we can to make this project finan- cially feasible,” he said.
Chesapeake Utilities has a financial model it applies to new projects once it determines the construction costs that is geared to a sixyear rate of return.
“We’re crunching numbers right now,” he said.
Another gas line extension project recently completed by Chesapeake Utilities brought a line from Middletown, Del., to Warwick Mushroom Farm — a 4.5 mile extension that cost about $1 million, which is being paid for by the utility company based on an estimated rate of return on investment.
“Construction costs can vary because of soil types, railroad crossings and major interstate crossings,” he said. “Warwick Mushroom’s addition of natural gas is a success story that will help them save money.”
Fiorelli explained the com- pany needs to connect users all along the route in order to make it pay for itself.
“We’ll start at Mechanics Valley Road and work west on Route 40 and into town,” he said.
“Cecil College and Peninsula Industrial Park are also interested in getting natural gas,” said Fiorelli, who said challenges will be getting permits to cross the railroad tracks and to cross I-95.
The company has future plans to go north and south on Route 272 and west on Route 40.
“Once the spine is complete, we can go off of it,” he said.
The company’s goal is to be complete to Principio Business Park by March or April 2017 to serve at least three new business users coming to the park.
“This project should be extremely beneficial to all,” Fiorelli said.