PSC seeks input on Chesapeake Utilities

Natural gas expansion requested
September 10, 2013

The Public Service Commission is seeking public comment about Chesapeake Utilities Corporation’s application to expand its service area from Lewes toward Fenwick Island.
The hearing is at 7 p.m., Thursday, Sept. 12, in Cape Henlopen High School’s auditorium.
In September 2011, the City of Lewes and Chesapeake Utilities officials signed a franchise agreement giving the company rights to provide natural gas service to residential and commercial customers.
The company extended its existing pipeline from Harbeson along Route 9 under Route 1 south of Five Points, to Clay Road, to Kings Highway to Freeman Highway, and to Cape Henlopen Drive where it ends at SPI Pharma, not far from Cape Henlopen State Park’s entrance.
Later, the company connected Beebe Medical Center, which became its second commercial customer on the new extension. The company is proposing what it calls the Eastern Sussex County Expansion Area.
A map indicating the proposed pipeline’s route shows it running along the coast and branching inland at Bethany Beach adjacent to Route 54A, until connecting which a branch along Route 54, connecting Fenwick Island and Selbyville.
Jeffrey R. Tietbohl, vice president of Chesapeake Utilities’ Delaware Division, said it’s too soon to know exactly how the extension would be routed.
He said there are several distribution points that could be use to connect the Lewes-area pipeline to Bethany Beach and points south.
Chesapeake Utilities began providing natural gas in Milton in 2005, in Georgetown and Millsboro in 2006 and in Harbeson in 2010. The company also provides service in Dagsboro, Frankford and Selbyville.
The Delaware Public Service Commission regulates only natural gas distribution to Delaware consumers. Natural gas distribution, delivery and administrative costs are determined in commission rate proceedings.
The recovery of costs associated with natural gas used by customers is determined annually as part of fuel-adjustment proceedings.
As a result, rates for natural gas typically change at least once a year. A number of other factors might also change rates.
Natural gas distribution companies are also sometimes permitted to collect additional fees to recover unanticipated or extraordinary expenses.
For instance, both regulated natural gas distribution companies have an environmental rate rider to recover costs associated with the cleanup of pollution from old manufactured-gas sites.
In setting rates for the expanded area, the company said it would also consider the seasonal/nonseasonal nature of the customers using its service.
The company projects up to 50 customers would begin using natural gas within one year of available service; 51 to 100 in two years; 101 to 200 in three years; 201-400 in four years, 401 to 800 in five years; and more than 800 in six years.
To see Chesapeake Utilities’ complete Public Service Commission docket, go to, and look for docket number 12-292.

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