MVP gas could fuel expansion in Franklin County, region - Roanoke Times

MVP gas could fuel expansion in Franklin County, region

Installation of the Mountain Valley Pipeline inflicted environmental costs on forests and streams but, with the pipeline almost ready to carry gas, a utility CEO and an economic development official predict it will generate economic gains as well.

By bolstering natural gas access in the region, the MVP creates conditions that could catalyze a wave of industrial expansion, according to officials.
Gas from the Mountain Valley Pipeline will soon be available in the Summit View Business Park in Franklin County through a tap installed by Roanoke Gas Co. The gate station at the business park is nearing completion and Roanoke Gas Co. plans to start operations as soon as this month.

Summit View Business Park in Franklin County will receive gas upon the MVP beginning service, possibly this month, a boon to efforts to market its 13 available sites.

In addition, Roanoke Gas Co. will tap the MVP to augment supplies for the greater Roanoke region — and none too soon.

“We were out of gas literally,” said Paul Nester, President and CEO of RGC Resources, the parent company of Roanoke Gas.

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About four years ago demand and supply lines began to intersect, he said.

“It was going to be difficult if not impossible to add a large economic development prospect, a large industrial user, someone that would use a large amount of gas.” He said he previously could not accommodate a new user on par with the likes of, say, Yokohama Tire in Salem and Steel Dynamics in Roanoke, who are among the system’s largest users.
Paul Nester, president and CEO of Roanoke Gas Co. and RGC Resources, Inc., stands in front of the interconnect where Roanoke Gas is nearing completion to receive natural gas from Mountain Valley Pipeline in the Summit View Business Park in Franklin County.

“So the Mountain Valley Pipeline is going to enable the region to, hopefully, again grow by adding a large employer like that,” Nester said. “We think that’s going to be helpful to the whole region.”

These appear to be some of the kinds of benefits envisioned when the Federal Energy Regulatory Commission authorized the pipeline on Oct. 13, 2017, citing public need. It is set to become the third interstate pipeline providing gas to the region.

MVP officials lacked a firm date to begin service earlier this week as crews endeavored to finish construction and post-construction checks, but it could happen soon. Roanoke Gas plans to turn on its taps, now in place in the Lafayette area of Montgomery County and in the Franklin business park, right away, Nester said.

“Whenever they’re ready, we’re ready,” Nester said.

Stik-Pak Solutions, a contract packaging business in the Franklin business park, will receive MVP gas as soon as available.

“We are opting to go with the natural gas,” Controller Rene Satterwhite said.
Gas service will soon be available in the Summit View Business Park in Franklin County through a gate station that will interconnect with Mountain Valley Pipeline.

Stik-Pak heats its building with propane that costs $3 a gallon, “which, when you’re filling up 8,000 gallons of a 10,000 tank, that can be quite expensive,” she said.

Natural gas service is generally “much cheaper than propane,” Nester said.

Any future Summit View tenant interested in gas service can hook up as well, which “broadens the park’s appeal to various industries,” Franklin County Economic Development Director Dani Poe said by email.

“We can get the pipe installed very quickly,” Nester said, and at gas company expense.

In addition, Roanoke Gas anticipates branching outside the business park to homes and businesses adjacent to Summit View. It could reach 200 to 300 addresses during the coming year to 18 months should they be interested in hooking a furnace, stove or water heater to piped-in natural gas, according to what Nester called “a very rough estimate.”

Roanoke Gas is one of five energy companies contracted to purchase natural gas transported by Mountain Valley. Its share will account for just 0.5% of the total capacity of the project, which will carry up to 2 billion cubic feet of gas per day. The 303-mile pipeline starts in West Virginia and will connect in Pittsylvania County to the Transcontinental Pipeline, which runs from the Gulf Coast of Texas to New York City.

Mountain Valley has informed federal regulators that construction and safety tests are almost completed. The company said in a May 21 letter to the Federal Energy Regulatory Commission that it plans to seek approval to begin operations in “early June.”

As of May 21, the first 186 miles of the pipeline had been “packed” with natural gas, the letter stated. Packing consists of purging the pipeline of air and loading it with natural gas, Mountain Valley spokeswoman Natalie Cox said.

Some Roanoke Valley residents who live along the pipeline’s route suspect that gas has reached their area by now. Cox said in a June 3 email that information about additional packing will be provided in a supplemental report to FERC. There had been no such report as of 5 p.m. Friday.
Gas service will soon be available from the Mountain Valley Pipeline in the Summit View Business Park in Franklin County.

Roanoke Gas has hired an engineering firm to study serving Rocky Mount, though hooking up the town of 5,000 people might require a new tap closer to the community, its CEO said.

A member of the Franklin County Board of Supervisors said Wednesday he doubts the gas company will spend the money that would be needed to pipe gas to the county seat of Rocky Mount and expressed uncertainty over how much gas will help the business park grow.

“I don’t think the lemon was worth the squeeze,” said Mike Carter, an opponent of the pipeline since he joined the board in 2018. He voted against selling the gas company land in the park and against permitting its tap.

Gas service “should help” attract businesses to the park, the supervisor said, but added “whether it will remains to be seen.”

Costs have been significant for the corporate joint venture responsible for the MVP. The Roanoke gas utility contributed to the pipeline’s cost through its subsidiary RGC Midstream and put money into hookups. Ratepayers are its primary source of funding and rates have risen, though for a variety of capital needs and other reasons.

But, on the upside, the Mountain Valley Pipeline waived a connection fee for the Summit View tap saving Roanoke Gas between $500,000 to $1 million, Nester said.
Some of the first Mountain Valley Pipeline natural gas to be used in the region will go to the Summit View Business Park in Franklin County through a tap installed by Roanoke Gas Co.

Cost overruns have been a driver of expense. The project is six years behind schedule and billions over budget. However, transportation charges – what customers pay toward piping the gas to them – were fixed at the start of the project for 20 years and remain unchanged despite overruns, Nester said.

Those transportation charges will be higher and that’s because the MVP is a modern, new facility, Nester said. However, Nester said gas from the prolific Marcellus and Utica basins in Ohio, West Virginia, Pennsylvania and southern New York, what the MVP will deliver, is less expensive than the gas the region uses today, which comes from the Gulf of Mexico and Texas.

The combined effect of higher transportation costs and lower fuel costs? Gas service made possible by the MVP will be comparable to what gas service costs now in the Roanoke Gas service area or slightly less, Nester said.

“We’re going to have access to some of the cheapest, most plentiful gas certainly in the United States,” he said.

Plentiful, indeed. The MVP, which expects to serve markets in the Mid and South Atlantic regions of the country, will be able to carry in five days what Roanoke Gas supplies its more than 50,000 customers in a year.

It puts the region on the map. Nester knew of no other new natural gas interstate line under construction in the United States. “It’s very special for us in the Roanoke Valley,” he said. “On the economic development front, it’s truly a game changer.”

Of note, 80% to 90% of corporate prospects shopping for expansion sites list natural gas as a need. That’s according to John Hull, who directs the Roanoke Regional Partnership, who described himself as “certainly aware of the advantages as it relates to economic development.”

“It’s absolutely true that there are areas of the commonwealth that do not have the same sort of gas supply that our region can now claim. There are areas of the country writ large in the same situation,” Hull said.

Although Nester said construction delays with the MVP are believed to have cost the region some business prospects, Hull said that there are businesses considering the region today “that would benefit from MVP in one dimension or the other.” Hull said he could not name any of them.

Staff writers Laurence Hammack and Jason Dunovant contributed to this report.

Jeff Sturgeon (540) 981-3251