Chesapeake Utilities Corporation has received the green light from the Federal Energy Regulatory Commission for its Eastern Shore Natural Gas interstate natural gas transmission subsidiary, to fuel Calpine Energy Services’ Garrison Energy Center in Dover. ESNG will transport 45,000 Deka therms per day
ESNG will transport 45,000 \dekatherms per day of natural gas to service Calpine’s 309-megawatt generation plant.
“This project is an example of our ability to provide clean natural gas thereby generating long-term value for our customers, investors, employees and our communities,” said Michael P. McMasters, Chesapeake Utilities Corporation Chief Executive Officer. “We are proud to be an integral part of providing access to natural gas, improving our environment and reducing energy costs.”
The transportation service will be provided under ESNG’s Off Peak ≤90 Firm Transportation (“OPT”) Rate Schedule. The OPT is designed to provide customers with an additional service offering that better matched the specific load requirements of the customer. Calpine’s Garrison Energy Center can also burn fuel oil should cold weather or other factors tap out natural gas supplies.
“This agreement with Calpine exemplifies our continued efforts to meet the energy needs of the region as demand for economic and environmentally friendly natural gas increases,” said Steve Thompson, president of Eastern Shore Natural Gas. “Through our pipeline facilities, we’re dedicated to transporting this domestic fuel source safely, reliably, and responsibly.”
ESNG plans to expand its facilities with the installation of 5.4 miles of 16-inch pipeline looping and 3,550 horsepower of new compression in Delaware. These new facilities are estimated to cost approximately $38 million. ESNG estimates that it will generate at least $5.8 million of revenue annually from providing the OPT service to Calpine.
Since Calpine’s electric generation plant initiated operations in the second quarter of 2015, ESNG has been providing Calpine with a limited mix of short-term service solutions until the upgrades are completed. It is anticipated the upgraded will be completed in the first quarter of 2017.
A decline and lower volatility in natural gas prices have led to companies adding generating capacity through the use of natural gas. Generous supplies of natural gas are now transported throughout the East Coast from new discoveries in Pennsylvania.
