ALEPPO – People crowded into Aleppo Brethren Church Thursday night wanting answers about why, despite the boom in natural gas drilling in this part of the county, their local gas company was abandoning service.
More than 50 people attended the meeting hosted by Aleppo Township and attended by representatives of Mountain Energy Ltd., which is abandoning its system, the state Public Utility Commission, state Rep. Pam Snyder, D-Jefferson, and state Sen. Tim Solobay, D-Canonsburg.
Mountain Energy filed a petition Dec. 9 with PUC seeking approval to abandon service to all 86 remaining customers. The company is in the process of abandoning the system since 2007 and, previously with PUC approval, abandoned 84 customers.
Residents wanted to know why service was being terminated and why they were being offered so little to connect to another system or to convert to another fuel to heat their homes.
Connie Jones, one of the customers, said she didn’t know how people in the community will be able to afford the conversion. “We’re not a community that is rich,” she said. “We love Aleppo, and we’d just like what is fair.”
Two customers mentioned they were offered only about $846 to convert to another fuel. Bill Black, one of those customers, said the amount wouldn’t cover buying a new clothes dryer to replace his gas dryer, let alone a new stove and water heater.
Shaun Sparks, a PUC attorney, assured residents a PUC review would take time and the commission would probably not be ready to act on the company’s application until at least the spring, after the current heating season.
Hearings will be held and residents will have the opportunity to be involved, Sparks said. He urged residents to file formal complaints, which he estimated would need to be submitted to PUC by February. Complaint forms were available at the meeting. Complaints also can be filed online through PUC’s web page.
One issue PUC will consider, Sparks said, is the amount being offered for conversions. Though Mountain Energy said it based its payouts on the PUC’s standard formula, Sparks said there is “no set formula,” and residents could protest the amount offered as not being fair.
Daniel Clearfield, an attorney for Mountain Energy, explained the company is abandoning the system because wells from which supplies are drawn are old and declining in production and distribution lines are in “very bad shape.”
Between October 2006 and November 2009, the company sold more than 170 shallow wells, gas leases and gathering lines to Leatherwood Inc., a Consol Energy subsidiary. Mountain Energy retained four wells.
Consol purchased the wells, said Bradley Bledsoe, company vice president, because it planned to mine through them. The wells would be plugged to ensure safe mining conditions.
One customer said Leatherwood was maintaining some of the wells only to allow it later to drill for Marcellus Shale gas through the leases, but Bledsoe said the wells were sold before Marcellus drilling became popular.
Leatherwood has continued to provide natural gas to Mountain Energy free of charge to serve the remaining customers until the final abandonment is completed, Clearfield said.
Mountain Energy sold the assets in four transactions. However, it failed to receive PUC approval for the sale as required by the Public Utility Code, Mountain Energy stated in its PUC application. The company also asked PUC that details of the asset sales, including purchase prices, remain confidential.
Several residents said they believed Consol should be required to provide service or pay for customers’ conversions.
Leatherwood is not a public utility, Clearfield said, and doesn’t provide residential gas service. Its wells will be unable to provide an adequate supply as some are shut down for mining and others are depleted of gas because of age, he said.
The lack of gas pressure in the system last week left a number of customers without heat. Snyder and Solobay, who were notified of the problem, said they immediately contacted PUC and Consol.
Snyder said Consol, EQT Corp. and Peoples Natural Gas all voluntarily worked to resolve the problem. The companies were able to make a connection to allow EQT and Peoples to supplement gas from wells Mountain Energy uses to supply its customers.
In response to questions, Bledsoe said Mountain Energy is negotiating with Peoples Natural Gas to supply Mountain Energy customers with gas, especially those in Aleppo who are close to a Peoples Natural Gas line.
But Ralph Graeser, a PUC safety supervisor, noted other distribution companies may be reluctant to take over lines they know nothing about and would probably want to install a whole new system.
Customer Hazel Koffler said she and others heard Mountain Energy paid the earlier abandoned customers much more than it is offering now.
After the meeting, Bledsoe said money had been escrowed for conversions from the sale of the assets to Leatherwood, but it was all spent on converting customers who had been abandoned earlier. He also mentioned an investigation being conducted regarding alleged embezzlement by a company employee.
In its PUC application, the company said it converted customers in the past to alternate fuels based on the customer’s choice.
This approach, however, was more costly than the PUC’s standard formula and financially burdensome, it said. Requiring it to convert the remaining customers to a requested alternative fuel could result in bankruptcy, it stated.
Snyder and Solobay said they will work to make sure any PUC hearings on the abandonment are held in Aleppo. Snyder also urged residents to provide their complaint forms to the township supervisors, who could then turn the complaints over to her or Solobay. They will then make sure the complaints are filed with the PUC.