(Dec. 24, 2015) Following more than a year of negotiations, the Ocean Pines Association announced last Thursday that it had reached an agreement with Sandpiper Energy to bring natural gas to the community.
The agreement includes a 10-year ground lease, five-year service agreement and “perpetual” nonexclusive deed of easement with a total value estimated at $394,750 for Ocean Pines. Payments begin in 30 days and work by Sandpiper to convert existing lines will begin in 90 days.
According to a press release issued on Dec. 17, General Manager Bob Thompson led discussion on behalf of the association, with Steve Thompson (no relation) representing Sandpiper.
Those talks started in June and followed an extended period of inactivity after discussions, led by several Ocean Pines directors, broke off last December.
The board of directors approved the contract in a 5-2 vote during a closed meeting on Thursday, just moments before a public session, when Thompson went into further detail on the matter.
He said the ground lease would provide space for Sandpiper to inject compressed natural gas – or propane – and that the agreement included storage of temporary propane tanks and emergency repair equipment. The lease includes a $1,350 monthly fee, totaling $162,000 over the 10-year term.
The service agreement would provide access to the Ocean Pines website, newsletter and marketing staff in order to give Sandpiper easier access to residents, and includes a monthly fee of $500, or $30,000 over the entire term.
Sandpiper also agreed to pay a one-time fee of $41,000 for the easement on the roads, based on an outside appraisal, as well as an additional $93,000 for the common-area easement. Both would be paid upfront in a lump sum.
Thompson said the area of the easement was essentially along the existing pipelines, and that the perpetual terms would allow the company to continue its operations “as long as they’re in business.”
The contract is effective immediately. Sandpiper also agreed to cover any legal fees associated with the negotiations.
“The benefit to the community is we’re finally bringing the alternative fuel source for our residents,” Thompson said. “We’ve effectively established a relationship with [Sandpiper] and covered our cost to do so.”
Board President Pat Renaud praised Thompson for his work during the negotiations.
“Bob has done an excellent job,” he said, adding that director Cheryl Jacobs provided additional legal advice during the talks. “He’s really worked hard with the Sandpiper people to have a one-on-one negotiation, which is the way it should be – not board to board.”
During a phone interview on Monday, Darrell Wilson, the director of Marking and Communications for Chesapeake Utilities, the parent company of Sandpiper, said more than 2,300 homes in Worcester County have been converted to natural gas.
Wilson said the switch should help lower consumer energy bills – over time.
“As more customers are converted to natural gas, the lower the customer costs will be versus propane,” he said, adding that natural gas also helps lower the overall carbon footprint.
He said the conversion would likely take several years.
“We’re certainly delighted that [the contract] is completed, and we’re looking forward to the next steps going forward,” Wilson said.
The agreement includes a 10-year ground lease, five-year service agreement and “perpetual” nonexclusive deed of easement with a total value estimated at $394,750 for Ocean Pines. Payments begin in 30 days and work by Sandpiper to convert existing lines will begin in 90 days.
According to a press release issued on Dec. 17, General Manager Bob Thompson led discussion on behalf of the association, with Steve Thompson (no relation) representing Sandpiper.
Those talks started in June and followed an extended period of inactivity after discussions, led by several Ocean Pines directors, broke off last December.
The board of directors approved the contract in a 5-2 vote during a closed meeting on Thursday, just moments before a public session, when Thompson went into further detail on the matter.
He said the ground lease would provide space for Sandpiper to inject compressed natural gas – or propane – and that the agreement included storage of temporary propane tanks and emergency repair equipment. The lease includes a $1,350 monthly fee, totaling $162,000 over the 10-year term.
The service agreement would provide access to the Ocean Pines website, newsletter and marketing staff in order to give Sandpiper easier access to residents, and includes a monthly fee of $500, or $30,000 over the entire term.
Sandpiper also agreed to pay a one-time fee of $41,000 for the easement on the roads, based on an outside appraisal, as well as an additional $93,000 for the common-area easement. Both would be paid upfront in a lump sum.
Thompson said the area of the easement was essentially along the existing pipelines, and that the perpetual terms would allow the company to continue its operations “as long as they’re in business.”
The contract is effective immediately. Sandpiper also agreed to cover any legal fees associated with the negotiations.
“The benefit to the community is we’re finally bringing the alternative fuel source for our residents,” Thompson said. “We’ve effectively established a relationship with [Sandpiper] and covered our cost to do so.”
Board President Pat Renaud praised Thompson for his work during the negotiations.
“Bob has done an excellent job,” he said, adding that director Cheryl Jacobs provided additional legal advice during the talks. “He’s really worked hard with the Sandpiper people to have a one-on-one negotiation, which is the way it should be – not board to board.”
During a phone interview on Monday, Darrell Wilson, the director of Marking and Communications for Chesapeake Utilities, the parent company of Sandpiper, said more than 2,300 homes in Worcester County have been converted to natural gas.
Wilson said the switch should help lower consumer energy bills – over time.
“As more customers are converted to natural gas, the lower the customer costs will be versus propane,” he said, adding that natural gas also helps lower the overall carbon footprint.
He said the conversion would likely take several years.
“We’re certainly delighted that [the contract] is completed, and we’re looking forward to the next steps going forward,” Wilson said.