Feb 23, 2016 4 min read

WAYNESBURG – Most of the remaining natural gas customers of Mountain Energy in the Aleppo area will be transferred to Peoples Natural Gas under a settlement agreement filed earlier this month with the state Public Utility Commission.

The proposed settlement results from applications filed with the PUC more than two years ago by Mountain Energy to abandon its remaining customers.

Under the agreement, Mountain Energy will transfer 77 customers and 22 miles of pipeline to Peoples, which will continue to provide the customers with natural gas services.

Mountain Energy’s remaining 18 customers, which Peoples determined it was operationally unfeasible to serve, will be compensated or converted to propane by Mountain Energy.

“This is a good outcome compared to the alternative and where we started,” said Tanya McCloskey, the state’s acting consumer advocate, whose office became involved in the case because of the customers’ potential loss of natural gas services.

The PUC scheduled a public meeting on the companies’ applications and the settlement agreement for 7 p.m. March 9 in Goodwin Performing Arts Center at Waynesburg University.

Mountain Energy’s original application to the PUC asked to abandoned services to its remaining customers. McCloskey gave credit to Peoples, which worked to develop a plan to maintain service to most of Mountain Energy’s customers.

If the settlement is approved by the PUC, the 77 customers will become customers of Peoples and will pay rates Peoples normally charges for natural gas services, said Joe Gregorini, Peoples vice president of rates and regulatory affairs.

The company will have to do some rehabilitation work on the Mountain Energy system and lines, which are old and in poor condition, he said. But customers will end up with reliable service, he said.

Gregorini said it was “unfortunate” the company couldn’t pick up all Mountain Energy customers, but those it couldn’t provide service to were in areas that may be impacted by longwall mining or were distant from the main service area.

Though Peoples will continue to purchase natural gas from wells owned by Leatherwood Inc., a CONSOL Energy subsidiary that provided Mountain Energy with gas, it also has its own lines in the area from which it can draw a supply, Gregorini said.

According to the proposed settlement, Mountain Energy will provide Peoples an upfront payment of $1,500 for each of the 77 customers Peoples will pick up to cover a portion of the first year operation and maintenance costs.

Mountain Energy was in the process of abandoning its system since 2007, claiming gas wells it relies on to provide gas to customers owned by Leatherwood were likely to be damaged by longwall mining and were old and experiencing production declines.

The company, which provided service to customers in Aleppo, Center, Freeport, Gray and Richhill townships, earlier, with PUC approval, abandoned 84 customers. It filed applications with the PUC in December 2013 to abandon its remaining customers.

At a public meeting in December 2013, customers questioned why they were losing natural gas services and said money Mountain Energy had offered them to convert to another fuel was inadequate.

Two customers said they were offered only about $846 to make the conversion.

According to the settlement, the 18 customers who are not picked up by Peoples will be converted to propane gas or compensated by Mountain Energy.

Under the conversion option, the company will pay for the installation of a 500-gallon tank or two 100-gallon tanks and necessary piping and connections. It also will provide fixtures for current appliances or new appliances that can use propane. The company also will fill the tank with propane once.

The compensation option will be based on “a good faith projection of the cost to Mountain Energy of the propane option,” the agreement said. That payment shall not exceed $7,000 per customer.

McCloskey said the conversion compensation included in the settlement is in line with what the PUC approved in other cases.

The proposed settlement was recommended for PUC approval by parties to the case, including Mountain Energy, People, Leatherwood Inc., the PUC’s Bureau of Investigation and Enforcement and the Office of Consumer Advocate.

A Mountain Energy spokesman could not be reached for comment.