Economic Development

Utilities Commission Approves Natural Gas Expansion

The State Utilities Commission on Wednesday approved a request by CP&L and the Albemarle-Pamlico Economic Development Corp. -- a consortium of 14 Northeastern North Carolina counties -- to use $38 million in state bond money to begin offering natural gas service in that part of the state. The commission granted a certificate of public convenience and necessity to Eastern North Carolina Natural Gas Co. LLC, the venture created by CP&L and the counties. The commission authorized a 12.1 percent profit margin for the entity.

The money comes from proceeds of a $200 million bond referendum approved by voters in 1998 to provide grants and other inducements to providers so they will find it more economically feasible to offer gas service in unserved areas of the state.

However, the Utilities Commission cut the request for bond money $44.2 to $38.8 million on grounds that $4.5 million of the request was to be used for economic development activities not directly related to laying gas distribution lines. CP&L said the $38.8 million that was approved isn't enough and the company may have to re-evaluate its plans. The money approved represents the negative net present value of the first phase of the proposed project.

The proposed 231-mile gas system would be connected to Transcontinental Gas Pipeline Corp.'s system in Hertford County and run eastward through Gates, Chowan, Perquimans, Pasquotank, Camden and Currituck counties in the northeastern corner of the state.

CP&L, which entered the gas business last year when it bought N.C. Natural Gas Corp., would construct and operate the new gas system on behalf of Eastern. The Raleigh-based utility also would be in charge of customer service.

Thirty-four North Carolina counties do not have any piped natural gas service.

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