OCEAN PINES– With frustrations over the delayed conversion to natural gas growing, the community made a tentative agreement to continue negotiations with Chesapeake Utilities Corporation.
The Ocean Pines Association Board of Directors issued a press release on Friday stating they extended the franchise agreement made in 1993 and would continue talks with Chesapeake subsidiary Sandpiper Energy in approving the conversion.
The company is in the process of converting much of Worcester County from propane to natural gas. The Board contended that, “It should be noted that during the conversion process these rates are the same for all Sandpiper customers whether they are being served by the propane distribution system or have been converted to natural gas.” The release went on to say that the Board and staff are assembling cost data “to aid members in making intelligent decisions regarding conversion” and that “Ocean Pines does not have a one size fits all energy solution.”
Board President Dave Stevens declined to comment further on the matter.
In a letter to the editor published in the Bayside Gazette on Sept. 4, Ocean Pines resident Budd Shea voiced his dissatisfaction with the timetable of the conversion in the community, saying conversions had taken place in Berlin and would soon take place in Glen Riddle while Ocean Pines was “placed on the backburner of conversions.”
Jeff Tietbohl, vice president of Chesapeake Utilities Corporation, said the company had converted more than 800 Worcester County customers to natural gas as of August.
“That’s basically in the immediate Berlin and West Ocean City area,” he said. “We’ve essentially converted the residents and the commercial businesses within the corporate limits of Berlin. We finished that project earlier this year and we’re currently finishing up the Glen Riddle development – which will hopefully be this week into next week – and then our intent is to focus on the immediate West Ocean City area this fall and winter between residential and commercial businesses.”
Tietbohl said delay in Ocean Pines is due to the ongoing negotiations.
“We’re still in the process of trying to negotiate a franchise agreement, which essentially dictates the terms of service (and) how we go about service within Ocean Pines – rules, procedures, things that they want in addition to the requirements that we have to meet already from the Public Service Commission perspective.
“We’ve had some extensions and we’re still trying to work through various issues, but that’s where basically we are,” Tietbohl continued. “We still are in the process of trying to finalize negotiations on a new agreement there. We’re hopeful we can work through that process through the balance of this year.”
If negotiations go well, Chesapeake would begin conversions in Ocean Pines in spring 2015. Tietbohl declined to comment on specifics, but said he was hopeful they would be resolved “within the next couple of months.”
“I think some of this is just normal process,” he said. “Each party is trying to reach a resolution of the issues. These things can be fairly complex in terms of how they want to provide service and the conditions of that service and what they want to see.”
Chesapeake also has to contend with Public Service Commission regulations.
“That creates complexities as well,” Tietbohl said. “We’re hopeful that this process will be able to come to a close in the next couple of months just like they are. I think all of us were hoping that we would be able to get through this process earlier and be able to be starting doing Ocean Pines this year. It just doesn’t look like – where we are right now – that’s going to be the case.
“We’re still heading down that path,” Tietbohl continued. “We’re obviously doing other areas and converting other areas, so we’re certainly engaged in the community and we want to be able to provide a good service to all.”
Tietbohl said much of existing propane distribution systems, including mains and services, can be adapted to natural gas. Once conversion begins, teams will go into each individual home in order to assess appliances and conditions in an attempt to use as much of the existing infrastructure as possible.
“Our intent right now would be to use as much of what’s already there in the ground as possible,” he said. “There are things that we have to do to convert it, but for the most part we’ve been able to use the systems that are in place.”
An initial assessment suggested that consumers in the county would save more than $1 million dollars each year, cutting energy bills between 5 and 10 percent. Because propane is unregulated energy as opposed to natural gas, the Public Service Commission approved a proposal by Chesapeake to blend rates together, possibly accounting for the Board’s contention that rates were the same for all customers.
“Natural gas is less expensive than propane, so as we introduce more natural gas into the system and we are able to combine those rates with propane rates, the prices will come down year over year over year as we introduce more natural gas into the system,” Tietbohl said.
“We’re continuing to work with Ocean Pines,” Tietbohl continued. “I think this is just the normal course of the process and both parties want to see this thing through and get it done as soon as possible.”
The Ocean Pines Association Board of Directors issued a press release on Friday stating they extended the franchise agreement made in 1993 and would continue talks with Chesapeake subsidiary Sandpiper Energy in approving the conversion.
The company is in the process of converting much of Worcester County from propane to natural gas. The Board contended that, “It should be noted that during the conversion process these rates are the same for all Sandpiper customers whether they are being served by the propane distribution system or have been converted to natural gas.” The release went on to say that the Board and staff are assembling cost data “to aid members in making intelligent decisions regarding conversion” and that “Ocean Pines does not have a one size fits all energy solution.”
Board President Dave Stevens declined to comment further on the matter.
In a letter to the editor published in the Bayside Gazette on Sept. 4, Ocean Pines resident Budd Shea voiced his dissatisfaction with the timetable of the conversion in the community, saying conversions had taken place in Berlin and would soon take place in Glen Riddle while Ocean Pines was “placed on the backburner of conversions.”
Jeff Tietbohl, vice president of Chesapeake Utilities Corporation, said the company had converted more than 800 Worcester County customers to natural gas as of August.
“That’s basically in the immediate Berlin and West Ocean City area,” he said. “We’ve essentially converted the residents and the commercial businesses within the corporate limits of Berlin. We finished that project earlier this year and we’re currently finishing up the Glen Riddle development – which will hopefully be this week into next week – and then our intent is to focus on the immediate West Ocean City area this fall and winter between residential and commercial businesses.”
Tietbohl said delay in Ocean Pines is due to the ongoing negotiations.
“We’re still in the process of trying to negotiate a franchise agreement, which essentially dictates the terms of service (and) how we go about service within Ocean Pines – rules, procedures, things that they want in addition to the requirements that we have to meet already from the Public Service Commission perspective.
“We’ve had some extensions and we’re still trying to work through various issues, but that’s where basically we are,” Tietbohl continued. “We still are in the process of trying to finalize negotiations on a new agreement there. We’re hopeful we can work through that process through the balance of this year.”
If negotiations go well, Chesapeake would begin conversions in Ocean Pines in spring 2015. Tietbohl declined to comment on specifics, but said he was hopeful they would be resolved “within the next couple of months.”
“I think some of this is just normal process,” he said. “Each party is trying to reach a resolution of the issues. These things can be fairly complex in terms of how they want to provide service and the conditions of that service and what they want to see.”
Chesapeake also has to contend with Public Service Commission regulations.
“That creates complexities as well,” Tietbohl said. “We’re hopeful that this process will be able to come to a close in the next couple of months just like they are. I think all of us were hoping that we would be able to get through this process earlier and be able to be starting doing Ocean Pines this year. It just doesn’t look like – where we are right now – that’s going to be the case.
“We’re still heading down that path,” Tietbohl continued. “We’re obviously doing other areas and converting other areas, so we’re certainly engaged in the community and we want to be able to provide a good service to all.”
Tietbohl said much of existing propane distribution systems, including mains and services, can be adapted to natural gas. Once conversion begins, teams will go into each individual home in order to assess appliances and conditions in an attempt to use as much of the existing infrastructure as possible.
“Our intent right now would be to use as much of what’s already there in the ground as possible,” he said. “There are things that we have to do to convert it, but for the most part we’ve been able to use the systems that are in place.”
An initial assessment suggested that consumers in the county would save more than $1 million dollars each year, cutting energy bills between 5 and 10 percent. Because propane is unregulated energy as opposed to natural gas, the Public Service Commission approved a proposal by Chesapeake to blend rates together, possibly accounting for the Board’s contention that rates were the same for all customers.
“Natural gas is less expensive than propane, so as we introduce more natural gas into the system and we are able to combine those rates with propane rates, the prices will come down year over year over year as we introduce more natural gas into the system,” Tietbohl said.
“We’re continuing to work with Ocean Pines,” Tietbohl continued. “I think this is just the normal course of the process and both parties want to see this thing through and get it done as soon as possible.”