A much-anticipated $1 million grant has been awarded to the SEDA-COG Natural Gas Cooperative, for a natural gas project for Centre Hall and Potter Township, Centre County, that is based on a public-private partnership approach. The Commonwealth Financing Authority approved and announced the grant January 23.
In partnership with Columbia Gas of Pennsylvania, the project will connect Hanover Foods Corporation and initially about 100 local businesses and residents to natural gas.
The grant from the state Department of Community and Economic Development’s Pipeline Investment Program (PIPE) helps to fund the construction of a $2.7 million point-of-departure station as the initial connection infrastructure needed before further build-out by Columbia Gas. Columbia Gas is providing matching funds for the grant, and Hanover Foods also is contributing funds for the station.
The grant application was supported by state Sen. Jake Corman (R-34), state Rep. Kerry Benninghoff (R-Centre/Mifflin), Centre County Planning and Community Development Office, Centre Hall Borough, Sammis Greenhouse of Centre Hall, and Brothers Pizza of Centre Hall.
“Expanding access of natural gas to this area will help to attract and retain jobs and provide a clean energy option for the residents of these municipalities as well as employers like Hanover Foods,” Corman said. “This grant is an investment in our economy, will help to promote clean and efficient energy options, and will improve the quality of life for area residents.”
“This grant will start the process of bringing affordable, domestic, and cleaner energy to the residents and employers of rural Centre County,” Benninghoff said. “The goal of this long-desired investment is more jobs for the region and more money in the pockets of hard-working people.”
Michael A. Huwar, president of Columbia Gas, said, “Columbia Gas is highly supportive of this public-private initiative to expand access to natural gas in central Pennsylvania, and believes this approach can be replicated elsewhere in our service area.”
The Centre Hall area has been the cooperative’s priority area for targeted investment, based on the cooperative’s analysis. According to the U.S. Census Bureau’s County Business Patterns, the county experienced a 21% decrease in manufacturing jobs between 2006 and 2015 – 4% greater than the loss of manufacturing jobs statewide. During this time, Centre County’s jobs decreased by 1% while jobs statewide increased by 2%. In 2006, 11% of jobs in the county were in the manufacturing sector, which decreased to 8%by 2015.
Clinton County Commissioner and cooperative President Pete Smeltz said the grant will help the cooperative and its project partners to bridge the gap in natural gas service and stimulate economic growth in the area.
“We feel this partnership forms a judicious and common-sense approach to extending natural gas service in the Centre Hall area,” Smeltz said. “With PIPE funds, the cooperative considers this initiative to be a showcase project that serves as a catalyst in preserving and creating jobs in the area. The cooperative expects to build on this project, not only to expand natural gas service in Centre Hall, but also to use this as a replicable model for future projects.”
Centre County Commissioner and cooperative board member Michael Pipe said, “Partnering with DCED on the PIPE grant will enable Centre County residents and businesses to have more opportunities for cost savings and growth.”
The type and level of this public-private partnership is unique in the state, said cooperative Executive Director Don Kiel. “The regional cooperative approach for natural gas service is a new one that has not been tried before in Pennsylvania. There are a few other natural gas cooperatives in the state, but none are a multi-county entity geared toward economic development projects, capable of facilitating public-private partnerships to develop natural gas infrastructure,” Kiel said.
The first phase will provide the first step in implementing new natural gas service through the construction of a point-of-departure station to connect to a Dominion Energy natural gas transmission line west of Centre Hall Borough, then to Hanover Foods in Potter Township.
The station will reduce the pressure from gas in the transmission line to a lower pressure suitable for the Centre Hall delivery pipeline system. Columbia Gas will own and operate the station as well as the delivery system.
The cooperative’s role for this project is procuring and managing the grant and supporting marketing efforts. Kiel said the cooperative has been instrumental in securing greater interest and potential customer participation for this project. “A tangible benefit of the cooperative’s role has been a higher-than-normal expected participation by potential customers compared to industry averages,” Kiel said.
Phase I construction is expected to take a year and should start this fall. Preliminary planning and design are already underway.
After the point-of-departure installation, the next phase will be construction of the delivery system to serve around 95 potential new customers. Columbia Gas will build the 25,425-foot mainline pipeline delivery system to serve Centre Hall and Hanover Foods. Several businesses may be connected early on, including those in downtown Centre Hall, as well as a large greenhouse, two convenience stores, and a farm store.
The project will support up to 150 family sustaining jobs at Hanover Foods, not including the jobs that will be retained and created for small businesses along the natural gas route through Centre Hall. Access to natural gas also will be made available to 130 acres of vacant industrial acreage (across Route 45 from Hanover Foods) at the completion of the project, which will make this site more marketable for economic development.
Total cost for both phases is just over $7 million, and both should be completed within 18 months.
The SEDA-COG Natural Gas Cooperative, which was established on June 9, 2016, seeks to provide project funding and form partnerships to expand natural gas distribution infrastructure to its member counties: Centre, Clinton, Juniata, Mifflin, and Perry. More information about the cooperative can be found on the SEDA-COG Natural Gas Cooperative website.