READING - UGI natural gas utility companies submitted a proposal to the Pennsylvania Public Utility Commission (PUC) to launch a pilot program designed to provide natural gas service to communities which are currently unserved or underserved, including Northumberland County municipalities.
UGI plans to fund the pilot program at a level of $15 million a year for five years.
UGI's proposed Growth Extension Tariff, also known as GET Gas, allows UGI to spread the cost burden for new main extensions to the group of new customers connecting to the new main. The proposal also allows the payment by a surcharge over time, avoiding significant up-front costs, UGI contends.
Most new customers connected under the GET Gas program will be able to use a portion of the savings generated from converting to natural gas service to offset the GET Gas surcharge. Substantial up-front costs for a gas main extension typically deter customers from connecting to natural gas systems.
Although he couldn't identify the number of customers or particular areas in Northumberland County the program is targeting, Joseph Swope, communications manager for UGI, said, "This is not a proposal for someone having a gas line in front of their house. We want to identify areas where we have a strong potential for growth. We want to run gas lines in areas where we assume homeowners will convert to gas within 12 years."
Swope said UGI believes there will be enough residences that will convert to gas over time to justify the investment "while making the contribution for each homeowner less because there will be a shared cost over the entire community."
Swope said the average cost to install a gas line is $500,000 to $1 million per mile.
Under the pilot program, he said customers serviced by natural gas would pay a monthly surcharge of approximately $45 for the next 10 years.
"There is a tremendous demand as prices decrease for expanded gas service," he added.
UGI proposes that its pilot program be available to potential customers in all three of its natural gas distribution companies: UGI Utilities-Gas Division, UGI Penn Natural Gas and UGI Central Penn Gas. Together, the companies currently serve approximately 587,000 customers in 45 Pennsylvania counties.
"We've heard from those who would like to be our customers, and we are responding with this proposal that will let us increase our reach," said Robert F. Beard, UGI president and CEO.
While there is no prescribed time frame for the PUC to review and act on this proposal, UGI is hopeful that GET Gas can be approved sometime in the fall with implementation beginning in 2014.