(Nov. 27, 2014) Negotiations between Ocean Pines and Sandpiper Energy have hit an impasse with no apparent end in sight.
The Ocean Pines Association Board of Directors voiced its displeasure over the deadlock during a meeting on Saturday, Nov. 22.
“We’re not making any progress,” OPA President Dave Stevens said. “We’re still having the same issues we had beforehand.”
Stevens prepared a statement to Sandpiper saying he felt the two sides had not made any progress and asked the board for its input. Parliamentarian Tom Terry warned that the board was about to air grievances from previously closed negotiations during an open session.
“It’s intentional,” Stevens said. “There is no real negotiation.”
Sandpiper is converting propane lines in several communities in Worcester County into natural gas, touting cheaper and cleaner energy. Ocean Pines was due to receive upgrades before talks stalled.
Stevens said less than half of the residents of Ocean Pines would likely benefit from the conversion. In addition, the board is seeking reimbursement for legal fees, as well as a turnover agreement at the conclusion of any contract.
If the community does sign a new deal with Sandpiper, Ocean Pines residents would have the option of sticking with a propane company as long as their tanks meet community standards.
“A lot of people don’t get any benefit at all and they are going to be inconvenienced,” Stevens clarified on Monday. “Sandpiper is going to have to come in and do something with their system. How bad that will be I don’t know. But it won’t be nothing.
“We’ve been trying to do all of this behind closed doors to keep any emotion out of it or anything like that,” Stevens continued. “You don’t negotiate in the press, but we’re not negotiating. Now we’re just reporting.”
Ocean Pines is also seeking a franchise fee, similar to what they receive with cable service Mediacom.
“We said, ‘Okay, you’re coming in. You’re going to make a profit out of this. You’re putting pipes into our private property,’” Stevens said. “It doesn’t cost them anything to do this. They’re concerned about the public service commission, but they don’t know anything. They’re just speculating or fearful.”
Stevens suggested that Sandpiper would add a surcharge to Ocean Pines residents who converted to natural gas.
“I think they like what they’ve got right now a whole lot,” Stevens said. “They don’t want to upset the apple cart. That’s what I gathered from my conversations with them. At some point in the future something is going to happen, and it will be interesting to see what.”
Jim Moore, vice president of Chesapeake Utilities Corporation, of which Sandpiper is a subsidiary, agreed that negotiations had mired.
“Not much has changed,” he said. “It’s a situation where we have ongoing negotiations and it’s just turned into a slow process, that’s for sure.”
Moore declined to offer specific reasons for the breakdown in talks.
“The board is looking to ensure that they’re protecting the citizens of Ocean Pines,” he said. “We have a distribution service already in place – it’s not like we’re trying to put something in that’s not already there. We bought those assets from Eastern Shore Gas and we’re looking to just make sure that whatever consent that they need to formalize, that we have all that in place.”
Moore said the company converted more than 1,000 Worcester customers from propane to natural gas this year, mostly in Berlin and West Ocean City.
“We had intended to go to Ocean Pines this year, but in the absence of having an agreement in place we just opted to move in the other direction and move towards Ocean City,” he said. “We probably have 1,000 or so more to convert in the West Ocean City area. Depending on how those negotiations go with Ocean Pines, we may be forced to move more towards Ocean City itself.”
While Sandpiper continues to operate the existing Ocean Pines infrastructure as a propane system, Moore said the desire is to move completely to natural gas.
“The agreement doesn’t really relate to that,” he said. “The agreement is just to have the authority to operate the distribution system in the community. They just have to get a comfort level with the way we’re proposing we operate, how we propose to provide the services and that we’re doing what a good business should do.”
In the meantime, the community sent out a request for information to other area propane companies requesting contact information and rates. The Ocean Pines Association will publish the results on its website.
“I think what we want is for people to put in tanks,” Stevens said. “It’s really straightforward. You get a tank, pay the guy, he puts the gas in and you’re saving money.”
Stevens will be on vacation for much of December, and does not anticipate a new deal before the end of the year.
“There’s not going to be any negotiating,” he said. “It’s not even that close.”
The Ocean Pines Association Board of Directors voiced its displeasure over the deadlock during a meeting on Saturday, Nov. 22.
“We’re not making any progress,” OPA President Dave Stevens said. “We’re still having the same issues we had beforehand.”
Stevens prepared a statement to Sandpiper saying he felt the two sides had not made any progress and asked the board for its input. Parliamentarian Tom Terry warned that the board was about to air grievances from previously closed negotiations during an open session.
“It’s intentional,” Stevens said. “There is no real negotiation.”
Sandpiper is converting propane lines in several communities in Worcester County into natural gas, touting cheaper and cleaner energy. Ocean Pines was due to receive upgrades before talks stalled.
Stevens said less than half of the residents of Ocean Pines would likely benefit from the conversion. In addition, the board is seeking reimbursement for legal fees, as well as a turnover agreement at the conclusion of any contract.
If the community does sign a new deal with Sandpiper, Ocean Pines residents would have the option of sticking with a propane company as long as their tanks meet community standards.
“A lot of people don’t get any benefit at all and they are going to be inconvenienced,” Stevens clarified on Monday. “Sandpiper is going to have to come in and do something with their system. How bad that will be I don’t know. But it won’t be nothing.
“We’ve been trying to do all of this behind closed doors to keep any emotion out of it or anything like that,” Stevens continued. “You don’t negotiate in the press, but we’re not negotiating. Now we’re just reporting.”
Ocean Pines is also seeking a franchise fee, similar to what they receive with cable service Mediacom.
“We said, ‘Okay, you’re coming in. You’re going to make a profit out of this. You’re putting pipes into our private property,’” Stevens said. “It doesn’t cost them anything to do this. They’re concerned about the public service commission, but they don’t know anything. They’re just speculating or fearful.”
Stevens suggested that Sandpiper would add a surcharge to Ocean Pines residents who converted to natural gas.
“I think they like what they’ve got right now a whole lot,” Stevens said. “They don’t want to upset the apple cart. That’s what I gathered from my conversations with them. At some point in the future something is going to happen, and it will be interesting to see what.”
Jim Moore, vice president of Chesapeake Utilities Corporation, of which Sandpiper is a subsidiary, agreed that negotiations had mired.
“Not much has changed,” he said. “It’s a situation where we have ongoing negotiations and it’s just turned into a slow process, that’s for sure.”
Moore declined to offer specific reasons for the breakdown in talks.
“The board is looking to ensure that they’re protecting the citizens of Ocean Pines,” he said. “We have a distribution service already in place – it’s not like we’re trying to put something in that’s not already there. We bought those assets from Eastern Shore Gas and we’re looking to just make sure that whatever consent that they need to formalize, that we have all that in place.”
Moore said the company converted more than 1,000 Worcester customers from propane to natural gas this year, mostly in Berlin and West Ocean City.
“We had intended to go to Ocean Pines this year, but in the absence of having an agreement in place we just opted to move in the other direction and move towards Ocean City,” he said. “We probably have 1,000 or so more to convert in the West Ocean City area. Depending on how those negotiations go with Ocean Pines, we may be forced to move more towards Ocean City itself.”
While Sandpiper continues to operate the existing Ocean Pines infrastructure as a propane system, Moore said the desire is to move completely to natural gas.
“The agreement doesn’t really relate to that,” he said. “The agreement is just to have the authority to operate the distribution system in the community. They just have to get a comfort level with the way we’re proposing we operate, how we propose to provide the services and that we’re doing what a good business should do.”
In the meantime, the community sent out a request for information to other area propane companies requesting contact information and rates. The Ocean Pines Association will publish the results on its website.
“I think what we want is for people to put in tanks,” Stevens said. “It’s really straightforward. You get a tank, pay the guy, he puts the gas in and you’re saving money.”
Stevens will be on vacation for much of December, and does not anticipate a new deal before the end of the year.
“There’s not going to be any negotiating,” he said. “It’s not even that close.”