Regulators clear way for Clearway to expand

Company set to take over steam network

Pittsburgh’s Downtown district energy network, which delivers steam to about 45 buildings in the Golden Triangle, is one step closer to becoming part of Clearway Community Energy’s expansion plans for the city.

On Thursday, the Pennsylvania Public Utility Commission approved the company’s request to widen its utility territory to service in Downtown and to buy a series or pipelines, valves, tunnels and other assets from Pittsburgh Allegheny County Thermal, a nonprofit cooperative headed for dissolution in 2023.

A district energy system, an old concept that has recently gained more steam as cities try to mitigate their carbon footprints and steel their infrastructure against weather and other disruptions, is, in this case, a network of underground pipes beginning at a facility that burns natural gas to make steam and pushes that steam through pipelines that run to buildings.

Clearway, which operates three such systems in Pittsburgh — one on the North Shore, formerly called NRG Energy Center, and two in Uptown — also provides chilled water to its current customers.

It wants to do the same in the PACT territory, the company told regulators.

Clearway plans to spend $11.75 million rehabbing the PACT assets that will be transferred as they are upgraded. Full transfer of steam service is expected in 2023.

PACT will receive $750,000 for the assets, but Clearway doesn’t want the PACT steam generation plant on Fort Pitt Boulevard. That building and the adjacent office space went on the market this summer.

Not all PACT customers are coming along for the ride either. Clearway said it plans to operate in the William Penn Corridor, which includes 10th Street, William Penn Way, a part of Forbes Avenue and nearby connecting streets. It has already secured agreements with Koppers Building, the Moorhead Federal Building, the Weis Courthouse Federal Building, the Marriott Courtyard and Gulf Tower and others, the company told regulators. The city of Pittsburgh is also on board.

But one of PACT’s founding members that once made up a third of its revenue, Allegheny County, is going its own way.

The county announced several years ago that it would be leaving PACT. Last year, it signed a contract with North Shore-based Peoples Natural Gas to build a new system dedicated to its buildings. This involves installing boilers at various, undisclosed locations, that

will service the county’s buildings. Spokeswoman Amie Downs said all the new boilers should be installed and operating by the end of the year. Already, half of its load has been transferred off PACT’s system, she said.

“When the county decided to leave, that put the entire membership in a very big bind,” Tim O’Brien, PACT’s operation manager said. Although the memberowned nonprofit was already in trouble before that — aging infrastructure and declining membership was driving up rates and a scathing audit in 2013 from Allegheny County’s Controller didn’t help — Mr. O’Brien said the news that it would lose its biggest customer kicked negotiations with Clearway into high gear.

PACT now has around 45 buildings pulling steam from its system, and the number keeps decreasing. Sometime soon, the Allegheny County Jail is scheduled to leave the system, he said.

“The Union Trust will be departing as well this year,” Mr. O’Brien. Some smaller customers have shut down because of the pandemic.

A few months ago, most PACT members voted to begin official negotiations with Clearway, although a development agreement has yet to be signed. Mr. O’Brien expects that will happen in the coming weeks.

In the next few months, PACT will start planning to decommission the parts of the system that Clearway doesn’t want. That might involve backfilling pipes or tunnels underground.

Clearway, which bought the former NRG Energy Center on the North Shore in 2018, has been growing its Pittsburgh footprint for years.

By 2018, Clearway built a new thermal plant in Uptown and began serving the area’s businesses, with UPMC as its anchor client.

If it takes over the PACT system, Clearway will use the Uptown plant to supply steam and, the company has proposed, chilled water to buildings in Downtown.

In 2019, it bought Duquesne University’s combined heat and power plant, which produces electricity, steam and chilled water. Duquesne retained ownership of the pipelines that connect to its buildings, but Clearway maintains them.

The Golden Triangle would fit like a puzzle piece between Clearway’s current networks.

It will also bring the Downtown system under the oversight of the PUC, which means rates will be set and litigated in public and customers will be able to appeal to state regulators with complaints.