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Plans to Increase Marcellus NatGas Consumption Advance

Mountain Valley Pipeline LLC (MVP) has secured more customers along its proposed route to deliver Marcellus and Utica shale natural gas to the Southeast and mid-Atlantic regions, reaching an agreement with affiliates of Roanoke Gas Co. to serve the utility's customers in Virginia.

Under the agreement, RGC Midstream LLC, a subsidiary of Virginia-based RGC Resources Inc., would acquire a 1% ownership interest in the MVP system. RGC affiliate Roanoke Gas Co. would also become a shipper on the pipeline to provide more Appalachian gas to its customers in southwest Virginia.

The 300-mile MVP is a joint venture between EQT Midstream Partners LP, NextEra Energy Inc., WGL Holdings Inc and Vega Energy Partners Ltd (see Shale DailySept. 2, 2014). MVP also said after announcing the agreement that it would file its certificate application with FERC later this month. The pipeline is expected to be in-service by 4Q2018.

"RGC Midstream's agreement with MVP addresses the growing demand for natural gas in our region and enhances the reliability of our Roanoke gas system," said RGC CEO John D'Orazio. Roanoke Gas has more than 50,000 customers in the state.

The same day MVP announced its latest agreement, the Pennsylvania Public Utility Commission (PUC) approved an unrelated plan to help incentivize more Marcellus natural gas consumption in the southeast part of the state. The PUC on Thursday authorized Philadelphia-based PECO Energy Co.'s plan to extend its gas mains to underserved locations. Under the plan, PECO would offer larger customer credits for increased natural gas usage and launch a pilot program to help finance the build-out of its service mains.

The PUC approved the reduction or elimination of the up-front customer costs for such service extensions, which often cost $1,500 or more. The Smart Gas Conversion program would allocate $10 million over three years to help finance main extensions in underserved neighborhoods. PECO would provide financing for customer costs over 20 years instead of charging for upfront payments. 

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