The Pennsylvania Public Utility Commission on Thursday approved a five-year pilot program that could bring Peoples Natural Gas to up to 350,000 new customers by making it easier for them to get gas lines extended to their homes.
Normally when property owners want a new gas line, they must pay the utility company up front for a share of the cost to extend the main and service lines, which can be an expensive barrier.
“In the city, extending a main can cost as much as $1 million a mile,” said Peoples Natural Gas spokesman Barry Kukovich. “Even in the country it can be $600,000 to $1 million a mile when you're crossing streams or railroad right-of-ways.”
The Peoples Natural Gas Service Expansion Tariff program will allow the utility to break up the cost of new mains and service lines into monthly charges for the new customers.
Customers could pay for gas main extensions at a rate of $55 a month for up to 25 years, or $15 a month for new service lines between the main and the building.
The program makes it more feasible for Peoples to expand into areas of its 18-county service area where it was previously too costly for potential customers to convert to gas from oil, propane or electricity. The program wouldn't be marketed strongly in Allegheny County because Peoples' service there overlaps with Columbia Gas, which has its own financing program, said Joe Gregorini, Peoples' vice president of rates and regulatory affairs.
In Cambria County, potential customers in more than 20 municipalities expressed interest in obtaining gas service, particularly in the small borough of Gallitzin, Kukovich said.
About 85 percent of the buildings in Gallitzin are heated by oil, with 10 percent using coal furnaces and the rest burning propane, said council president Roger Renninger. If enough people want gas, Peoples could start extending lines from about a mile and a half outside town at the same time as a sewer replacement project to reduce the cost of tearing up and restoring streets, he said.
Mary Beth Whited, superintendent of the Penn Cambria School District, said converting the middle school in Gallitzin from oil and coal to gas, or to a mix of gas and coal, could save the district $20,000 to $30,000 a year.
“We've had two town hall meetings and one meeting for businesses. ... The general consensus is, let's just move forward on this,” Renninger said.
Matthew Santoni is a staff writer for Trib Total Media. He can be reached at 412-380-5625 or msantoni@tribweb.com.
