Yankee Gas Services Co., a Northeast Utilities subsidiary, broke ground last week on a natural gas pipeline expansion project in Connecticut, the company's first under the state's new regulatory strategy designed to encourage such expansions.

Construction began on Aug. 1 on Yankee's Wilton Gas Expansion Project, a new 3.5-mile, 8-inch diameter pipeline through the Town of Wilton. The pipeline will run under existing roads and provide gas to the downtown business district, municipal buildings, three schools and a community center.

The project is part of Yankee's plan to convert 10,000 low-use customers to natural gas heating, as well as to add 41,296 "on-main" and 31,125 "off-main" customers, by 2023. On-main customers are those that have gas service available on their street but have not yet connected, while off-main are those interested in gas service but are not close enough to existing infrastructure to connect.

Yankee's overall plan is one of three large-scale expansions approved by the state Public Utilities Regulatory Authority (PURA) last November (see Daily GPINov. 25, 2013Nov. 7, 2013). Collectively, expansions by Yankee, Connecticut Natural Gas Corp. (CNGC) and Southern Connecticut Gas Co. are expected to add 280,000 new gas customers over the next 10 years.

Gov. Dannel Malloy signed legislation to expand the state's gas distribution system last year. The three utilities had also submitted a joint gas expansion plan with PURA and the state Department of Energy and Environmental Protection in 2013 (see Daily GPIJuly 11, 2013June 18, 2013).

"We created our state's first-ever Comprehensive Energy Strategy with the goal of providing cleaner, cheaper and more reliable energy to Connecticut's residents," Malloy said in a statement released Monday. "Today's announcement is Wilton doing just that -- reducing energy costs while creating construction jobs in the short-term and putting into place the infrastructure to support a growing economy that leads to long-term job growth."

Northeast Utilities' CEO Tom May added that residents and businesses across the state would benefit from the new legislation. "As part of the initiative, we're working very closely with communities like Wilton to develop plans that will enable us to provide natural gas service to the growing number of customers who want it," he said.

According to Yankee, the town is expected to save $500,000 in annual energy costs.

"On behalf of the Town of Wilton, we are delighted the natural gas expansion project is now under construction, which will benefit our entire community for many years in the future," said Town of Wilton First Selectman Bill Brennan.

Yankee said construction is expected to be completed by the end of November, weather permitting.

According to PURA, CNGC and Southern -- both units of UIL Holdings Corp. -- have proposed converting 29,500 low-use, non-heating customers to heating by 2023. The two utilities would also add 113,700 on-main customers, plus 54,000 off-main customers, by that time.