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Mountaineer Planning $45M Expansion in West Virginia's Eastern Panhandle

Mountaineer Gas Co. has asked West Virginia regulators to reopen and amend its five-year infrastructure replacement and expansion program (IREP) so the company can include -- and ultimately expedite recovery costs for -- a $45 million project to build 56.4 miles of new distribution lines in the state's Eastern Panhandle.

According to documents filed Thursday [Case No. 15-1256] with the West Virginia Public Service Commission (PSC), Charleston, WV-based Mountaineer is proposing the Eastern Panhandle Market Expansion (EPME), to be built in three segments. The first calls for building a 27.5-mile distribution trunk line, beginning at a new interconnection in Morgan County, WV, with a new transmission line from Columbia Gas Transmission LLC (CGT) and extending to the northern end of the company's distribution system, which serves the area of Martinsburg, WV.

The second segment calls for construction of a 24.5-mile distribution trunk line dubbed the "Charles Town Loop." Originating from the southeast side of Martinsburg, the loop would head to Charles Town, WV, before continuing west to serve a single commercial customer in Middleway, WV, before heading northeast to Kearneysville, WV.

A third segment of distribution trunk line, measuring approximately 4.4 miles, would connect the east side of Martinsburg to Shepherdstown, WV.

Mountaineer said it intends to include the EPME in its IREP filing for 2017 on Aug. 1, 2016, and hopes to have PSC approval of the expansion as an IREP-eligible project on that date. But the company also asked regulators to enter an order before July 29, in order to give CGT's board sufficient time to approve a new transportation agreement with Mountaineer.

Last year, the West Virginia Legislature enacted Senate Bill 390, which allows companies to recover some of the costs to replace, upgrade and expand natural gas infrastructure ahead of time. The projects must be deemed within the public interest, and reimbursement hinges on PSC approval.

Mountaineer filed an application for approval of a five-year IREP beginning on Jan. 1, 2016, under which the company proposed spending $73 million for infrastructure replacement and system upgrades. It proposed spending $14 million in 2016 alone. The PSC approved Mountaineer's IREP on Dec. 23, 2015.

The company said that if the PSC grants its approval, a typical residential customer averaging 6 Mcf/month would be a potential increase of 72 cents/month, or $8.60/annually in 2017, and an additional increase of $1.14/month, of approximately $13.70/annually in 2018, for a cumulative impact of $22.30/annually. Those figures exclude base revenues generated from the additional customers Mountaineer would get from the EPME.

"Preliminary estimates indicate that such revenues would offset IREP costs by $1 million to $2 million on an annual basis, reducing the estimated rate impact," Mountaineer said.

In its PSC filing Thursday, Mountaineer said the EPME would enhance natural gas supply service in the Martinsburg area. It would service West Virginia's Berkeley, Jefferson and Morgan counties.

"Proctor & Gamble recently announced its intent to build a large facility in Martinsburg, and [we have] received requests for service from other potential high-load customers," Mountaineer said. "In addition, several economic development groups have approached [us] about expanding natural gas service in the Eastern Panhandle."

The company said it hopes to begin construction in the summer of 2017 and have the expansion in-service by Oct. 30, 2017.

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