DATE: Thursday, November 20, 1997           TAG: 9711200508

SECTION: LOCAL                   PAGE: B1   EDITION: NORTH CAROLINA 

SOURCE: BY JEFFREY S. HAMPTON, STAFF WRITER 

DATELINE: ELIZABETH CITY                    LENGTH:   84 lines

COUNCIL PREPARES FOR NATURAL GAS

Anticipating the arrival of natural gas much like a child does Christmas, the City Council will form an authority to handle the utility at least five years before it becomes a reality.

``Whatever company brings it in here we'll be ready to handle it,'' Mayor Rick Gardner said Tuesday.

Without natural gas, the area is handicapped in the competition for new businesses and light industries interested in setting up shop in North Carolina.

Two weeks ago, North Carolina Natural Gas said it could run a 6-inch-diameter pipeline 15.8 miles from the Virginia line to Elizabeth City along U.S. 17 at a cost of $2.3 million. Distribution lines within the city would cost an additional $1.6 million. North Carolina Natural Gas would buy from Commonwealth Gas, a Richmond company that supplies parts of Hampton Roads.

That's great news for local officials who have wished for natural gas for a decade and seriously lobbied for it the past three years. Elizabeth City would have the largest customer base, but the whole region stands to benefit, they say.

However, NCNG will not run the pipeline for five to 10 years because Elizabeth City does not have the industry base to support the cost.

``I seriously doubt that it will ever be economically feasible,'' said Stuart Dixon, vice president of government relations for NCNG.

The company can finance the pipeline, however, through one of three methods: the state expansion fund, government grants or by having the customers bear much of the cost.

The state created the expansion fund by withdrawing refunds given gas companies by their major providers when costs are lower than predicted. The expansion fund can reach several million dollars a year, Dixon said.

Expansion funds will not be available to Elizabeth City until at least after the year 2000, Dixon said.

NCNG is one of five natural gas companies in North Carolina that hold rights to every region of the state. NCNG holds the rights to south central and eastern North Carolina. Because of a lack of industrial customers, pipelines have never reached 15 counties in northeastern North Carolina. Twelve counties in the western corners of the state are still unserved.

Officials here say that with natural gas available, more industry will come.

Forty percent of all industry that comes to North Carolina demands natural gas, said Jimmie Dixon, a Pasquotank County commissioner and member of the Northeast Commission.

``They get off the plane and ask, `Do you have gas?' '' Dixon said. `` `No,' we say. They get right back on the plane and say sayonara.''

Natural gas appeals to industry because it is so much cheaper than electricity, according to figures from the North Carolina Utilities Commission.

The average homeowner will spend $1,300 a year using electricity. The same homeowner would spend $700 using natural gas, according to commission surveys. Industries can save thousands.

In some places natural gas has drawn industries that increased the tax base by 50 percent.

``If something like that happened, then we'd be able to lower the tax rate,'' Jimmie Dixon said.

To push gas companies to install pipelines in industry poor areas of the state, the legislature passed this year a ``Use it or Lose it'' law. Rep. Bill Owens, D-Pasquotank, sponsored the bill. Sen. Marc Basnight, D-Dare, supported the bill through the senate.

After the law takes effect July 1, 1998, NCNG has no claim on the region unless it lays pipelines.

But because of the costs, it is unlikely another utility company will want to take over the region, said Jeff Davis, a public utilities engineer for the utilities commission.

``If you want something bad enough, you can get it,'' Davis said. ``Sometimes it is not as easy as it may appear.''

Frontier Utilities of North Carolina has spoken with local authorities but fears it may be sued by NCNG, Jimmie Dixon said. Frontier has said it could install the pipeline and then charge slightly higher rates to make up the cost.

Another way is to establish its own regional authority and buy directly from Commonwealth. The authority would face the expense of laying the pipeline and buying ``capacity,'' a term used to describe the amount of gas needed here on the coldest day.

Capacity is expensive, Davis said.

If and when natural gas comes here, Elizabeth City's authority will buy gas from a supplier, then sell it to its customers just as it does electrical power.

Send Suggestions or Comments to webmaster@scholar.lib.vt.edu