December 26, 2009 Pipe Lines

Volume 12 | Issue 4

Unlike many newcomers and upstarts on the natural gas scene, Equitable Gas has a history as old as the discovery of gas in Pennsylvania. And

It didn’t cause the same drama as the wildcat discovery of oil in Texas; nonetheless, Michael and Obediah Haymaker’s accidental find of natural gas in a Pennsylvania meadow in 1878 ushered in a gusher of another sort and helped to spin the wheels of development in a burgeoning corner of the United States.

The find was in Murrysvile, Westmoreland County, near the city of Pittsburgh, which was just starting to leave its market on the industrial landscape. The pair was actually drilling for oil, and according to historic accounts: “The well came in with such force that it shook the countryside.” The Haymakers made headlines and Murrysville became the first commercially developed gas field in the United States. As it turned out, western Pennsylvania was rich in natural gas deposits and natural gas wells began cropping up in many areas.

“One of the first to recognize the commercial potential of natural gas was industrialist George Westinghouse, then about 40 years old,” relates a historical narrative on Equitable Gas’s Web site. “Westinghouse discovered a sizable gas field in the backyard of his home in east Pittsburgh in 1884 and his residence was the first in Pittsburgh to light and heat with gas.” Natural gas eventually elbowed out coal as a leading energy source, quickly developing a reputation as a cleaner burning fuel. In his next move, Westinghouse bought a charter that granted him the power to lay gas lines under private property in Pittsburgh. The charter was in the name of the Philadelphia Company and Westinghouse announced on Aug. 4, 1884 that this company would begin natural gas service to Pittsburgh and surrounding communities.

Until the use of gas meters toward the end of the 1880s, the Philadelphia Company delivered unlimited amounts of natural gas to homes for a fixed monthly fee (about $1 for cook stoves and 75 cents for heating stoves).

Through the years the Philadelphia Company expanded its operations, buying up regional gas fields and extending its pipelines to municipalities in the greater Pittsburgh area. Westinghouse also acquired a number of smaller gas companies operating in the Pittsburgh area. One of these was Equitable Gas, incorporated in 1888 as a wholly owned subsidiary of the Philadelphia Company. The company also proved to be an innovator in the energy industry with the development of the first underground gas storage fields during the 1930s.

Today Equitable Gas operates 3,300 miles of distribution mains and 260,000 individual lines of service to residential, commercial and industrial customers in southwestern Pennsylvania, northern West Virginia and eastern Kentucky. The company’s primary responsibility is to provide natural gas to customers in an efficient, safe manner, with service crews on call 24 hours a day, seven days a week.

The company is one of three natural gas providers in Southwest Pennsylvania, sending gas out from the well through pipelines into households and businesses. “We also store natural gas to pipe to customers in the winter,” says Scott Waitlevertch, external communications and government relations manager, adding that there is very little processing of the gas. “We (and other processors we may get natural gas from) add odor to the gas so folks know if there is a leak of any kind. In addition, we will remove moisture from the natural gas and in the winter during cold weather the gas can get heated to prevent freezing and maintain pressure as the gas travels in pipes. But all of that is very minimal.”

The company invests more than $30 million annually, and since 1997 a total of $360 million has been invested to upgrade pipelines, improve the efficiency of operations, and enhance the quality of customer service.

Heading into its third century of operation, Equitable Gas is meeting the challenges imposed by aging infrastructure. “Like other utilities we have to replace infrastructure and aging pipelines,” notes Waitlevertch. “Some of our customers’ pipelines might be 80 years old or more. That’s a challenge for us. We continue to replace infrastructure as permitted.”

And that infrastructure places a high demand on the delivery of natural gas in the state: According to the Energy Association of Pennsylvania, 51 percent of homes in Pennsylvania use natural gas; 25.5 percent use oil; 16.5 percent use electricity; and 3 percent bottled gas. In Allegheny County 87.5 percent of homes use natural gas; 9.3 percent use electricity; 1.3 percent oil and 1 percent bottled gas.

Waitlevertch adds that “a focus of ours has also been outreach and education for our customers, to enable them to meet utility bill demand and payment.” This has been achieved through the federal Low Income Home Energy Assistance program, which has released almost $5 billion toward helping customers with utility payments; through it 60 percent of Equitable Gas’s customers have applied for and received funding, either to subsidize utility payments or to financially assist should a furnace break down.

Another distinction came last year when Equitable Gas earned the American Gas Association Safety Achievement Award for lowest rate of injuries and illness.

In the meantime Equitable Gas has managed its exposure to bad debt and has actually reduced this number, with net write offs down 25 percent.

MOVING FORWARD
Because Equitable Gas is involved in a captive market in Pennsylvania – with shrinking population and industrial growth – the company is looking into new product development, such as natural gas vehicles and fleet services. Its starting point is the bus system around Pennsylvania’s Allegheny County, and the goal is to develop buses that run on natural gas.

“A decade ago,” Waitlevertch says, “we worked with the Port Authority of Allegheny County in Pittsburgh and the surrounding areas to design and build refueling stations. Right now we’re putting together a proposal for a pilot program and getting agreements in place for a refueling station.”

Adds Equitable Gas President M. Elise Hyland, “There’s great potential in natural gas for the region and country as well as Equitable Gas. In our view there’s three main reasons for this: it’s cleaner, cheaper and it’s a domestic fuel. It’s the lowest carbon fuel we have and reducer of greenhouse gas emissions.”

The company’s initial emphasis, she explains, will be to provide return-to-base fleets, in which the refueling station initially would be located on the base, but with the prospect of growing out the business from there. Overall, the largest growth segment for natural gas vehicles, she adds, is in the trash and transit sectors.

“Our belief is that this is the right move for Pennsylvania and is also the right move for us as a growth opportunity. We’re very excited about that.”

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