Carolina Journal News Reports
CJ Series

Natural Gas in Northeast NC

In 1998 voters approved $200 million in bonds to extend natural gas to 22 northeastern counties. State Senate leader Marc Basnight’s influence apparently enabled political allies to manage most of the available funds. None of the money is likely to be paid back and the pipeline project isn’t expected to be economically feasible for decades, if ever.

(8.15.05) Utilities Commission OKs Merger
RALEIGH — The N.C. Utilities Commission last week granted permission for the full merger of a gas startup into its partial owner, Piedmont Natural Gas Corp. Eastern North Carolina Natural Gas, which serves 14 counties in the northeastern part of the state that were previously without service, received $188.3 million of $200 million in gas bond funds that voters approved in 1998. However, ENCNG is unable to continue as a separate entity because it does not have a sufficient number of customers to sustain operations.

(7.27.05) Former Official Against PNG Merger
RALEIGH — The former deputy for longtime Democratic State Treasurer Harlan Boyles says the N.C. Utilities Commission should deny plans for Piedmont Natural Gas Co. to merge into its overall rate base a money-losing gas pipeline venture in the northeastern part of the state.

(7.05.05) Hearing Held on Piedmont Merger
RALEIGH — The North Carolina Utilities Commission heard testimony late last month about Piedmont Natural Gas Co.'s desire to merge a money-losing gas operation into its overall rate base, which turned into a discussion over who should pay for the unsustainable economic development project in the northeast part of the state.

(6.27.05) Piedmont Wants to Absorb ENCNG
RALEIGH — Piedmont Natural Gas Co. wants to merge a taxpayer-subsidized, money-losing gas venture into its overall customer base, which could permanently inflate its rates, according to one of its own witnesses in a case before the North Carolina Utilities Commission. Dr. Mitch Renkow, a professor of resource economics at N.C. State University, said he thinks "there is a substantial probability that (Eastern North Carolina Natural Gas) will never become economically viable." If the ENCNG territory, extended through 14 counties in northeast North Carolina, could never turn a profit with its customer base, then all of Piedmont's remaining customers in the state would have to subsidize it.

(12.06.04) Taxpayer-Funded Gas Line Grows
RALEIGH — Eastern NC Natural Gas is winding down its pipeline-construction project in 14 Northeastern counties with an ambitious underground crossing of Currituck Sound. But it is not clear how many Outer Banks customers are eager to convert from their present energy suppliers to natural gas. Demand for natural gas in the entire region has not progressed as much as company officials had hoped — there are only about 800 customers in the northeast so far. Gas service infrastructure is usually not built unless new customers are able to pay for the new lines.The Northeast project received $188 million in bonds to be paid off by state taxpayers.

(11.18.04) Learning Their Lesson on Boondoggles
Never let it be said that state government is incapable of imparting a good education. Politicians, for example, are learning that they better stop asking the voters to approve their favorite schemes.

(11.17.04) State-Backed Natural Gas Line Fails
RALEIGH — A natural gas pipeline project in Northeastern North Carolina, built through the help of taxpayer-backed bonds, is hemorrhaging money and its managers are trying to find a way to stop the bleeding. Eastern NC Natural Gas was formed four years ago through an equal partnership between an economic development corporation and what is now Progress Energy. It received almost all of a $200 million state bond issue to construct a natural gas pipeline through 14 Northeast counties. The project, acquired by Piedmont Natural Gas, has failed to attract many customers, so now Piedmont wants its entire customer base to cover the losses.

(12.03.03) "Revolving Door" Issue Raised
RALEIGH — Allyson Duncan, a former member of the North Carolina Utilities Commission who left in 1998, a year before the end of her eight-year term, represented a newly formed gas authority before the Utilities Commission within months after resigning. Duncan’s early departure to join a law firm raised questions at the time about how quickly she should represent clients before the commission. The Senate unanimously confirmed Duncan in July 2003 to the U.S. 4th Circuit Court of Appeals. She has received bipartisan praise, with both GOP Sen. Elizabeth Dole and Democrat Sen. John Edwards supporting her nomination.

(8.27.03) Gas Pains for Customers, Taxpayers
RALEIGH — The secondary deal behind the purchase of North Carolina Natural Gas by Piedmont Natural Gas Co. could eventually cause customers’ rates to rise and diminish already faint hope that taxpayer-funded bond money will be repaid. Piedmont’s $417.5 million deal to buy NCNG from Progress Energy Inc. was accompanied by an agreement to also take on 50 percent of Eastern North Carolina Natural Gas. An expected future merger of ENCNG into Piedmont could mean the ability to recover bond funds gets lost, and ENCNG's operating losses may affect all of Piedmont's customers.

(6.11.03) Natural Gas Efforts Got Political Push
RALEIGH — In 1998 voters approved, by a 51 percent to 49 percent ratio, $200 million in bonds to extend natural-gas pipelines to 22 unserved counties in the state. However, the weight of State Senate leader Marc Basnight’s influence apparently enabled political allies in eastern North Carolina to manage $188.3 million of the available funds. None of the money is likely to be paid back because the bond legislation doesn’t require it, and because the pipeline project isn’t expected to be economically feasible for decades, if ever.

(6.11.03) Natural Gas Project Plays Role in Allegations
RALEIGH — In his pursuit to build ethanol plants in eastern North Carolina, DFI Group President William Horton says he unwittingly got on the wrong side of the most powerful politician in the state. Economic developers’ enthusiasm over Horton’s promise to bring jobs and a market for locally grown farm products was tempered by his deals with outsiders to deliver natural gas to his proposed plants. Horton attempted to work with South Carolina gas company SCANA Corporation and Texas-based El Paso Merchant Energy Corp. while Senate President Pro Tem Marc Basnight promoted a separate enterprise to get up to $200 million in taxpayer-backed bonds to build a pipeline in the east.