June 9, 2005
The Jackson Township Supervisors held a special meeting to discuss approving a Highway Occupancy Permit to Rager Mountain L.P. for a proposed landfill gas line at 8:00 a.m. at the Jackson Township Municipal Building. Members present were Supervisors Dave Bracken, Bob Stephens and Bruce Baker along with Secretary-Treasurer / Manager Dave Hirko and Solicitor Bill Barbin. Also present was Greg Shaffer of Keystone Renewable Energies. The meeting was called to order by Dave Bracken, Chairman with the Pledge of Allegiance to the flag.
Board Roll Call was taken with all three Supervisors present.
Public Comments Concerning Agenda Items:
Steve Yurasek asked if we could have a run-down of what this right-of-way consist of and my reasoning for this is simple. We’re proposing water lines, we’re proposing sewer lines eventually and we need to know in the proximity is this going to hinder us at a later date and we want to know where the water lines are going to go down this way so we’re not giving a right-of-way and having somebody else hindering what we’re trying to do.
Clair Michaels said I just wanted to know what was going on and also what the gas line permit authorization involves. How do we know what to ask until we know what is going on because there was nothing given out on the gas line and we couldn’t go in and look at it. I live down that road below the garbage dump and want to know what’s going on with it. We should have been able to look at anything ahead of time and this is the trouble when the Township throws it down in front of us and says here, that’s it. You look at an agenda and don’t even know what you’re talking about and how can you ask questions when you don’t know anything about it.
Will Michaels said I’m also here to find out what’s going on.
Motion Baker, second Bracken to approve Highway Occupancy Permit to Ranger Mountain L.P. and the Cambria-Somerset Authority. A discussion then followed. Solicitor Barbin said the motion had to be made before we could discuss this and said that the Township only knows the vaguest facts too and I only know the most superficial details that they want to run a pipeline along the road near one of our culverts and you’re here today to explain what you want. Chairman Bracken turned the floor over to Greg Shaffer of Keystone Renewable Energies to explain their request for the right-of-way. Greg Shaffer said our company is called Keystone Renewable Energies and we’ve been working for almost three years trying to get this project off the ground. Mr. Shaffer displayed an ariel photograph showing where the proposed lines would go and where they were requesting a right-of-way along Wagner Road in Jackson Township. He explained various points of reference and said that the photograph was several years old and the landfill is now much bigger than when the photograph was taken. He pointed out the location of Wagner Road which goes to the Indiana County line and then turns into Plowman Road. Shaffer then explained, We made an arrangement with a group called JAREC. JAREC is the Johnstown Area Regional Energy Cooperative. The founding members of JAREC are Johnstown Wire Technologies, Gautier Steel, Johnstown Welding & Fabricating and the Johnstown Redevelopment Authority. The arrangement we made with that group is two-fold. . . (1) that we ran out of money developing the project which you probably saw in the paper and County National Bank provided us with financing to finish the design permitting of this project. The founding members of JAREC guaranteed that loan and what they were interested in was a reasonably priced long-term supply of natural gas and they’re getting hammered with high energy costs. We’ve agreed to sell our gas to them at a discounted rate as a result of them stepping up to guarantee this loan and helping us finish the development of this project. All those guys currently get their gas from People’s Gas and one of the ways we can most quickly get them gas is to deliver the processed methane out of this landfill and there is a pipeline on the photograph known as the Betsy 8" Pipeline. If you were to follow it down to Tanneryville, just on the hill to the East, this Betsy 8" pipeline ties into Peoples Pipeline 1160. Our goal is to get our gas into the Besty 8" which will provide a conveyance mechanism for the gas to get to Wire Tech, Gautier, Redevelopment Authority and Welding & Fabricating. What we’re hoping to do is in October or November is build a pipeline from the Landfill to an inter-connection in East Wheatfield Township. I was in East Wheatfield Township Tuesday evening and they authorized their Solicitor / Engineer to work with Keystone and me to get a Highway Occupancy Permit agreement complete and that’s what we’re hoping to do here today. . . .to get the Supervisors to authorize this.
Steve Yurasek asked, Are you asking for a specific crossing or something or just to sign a blank thing. Shaffer said, We’re going to ask very specifically. He said we’re looking to come out of the large excavated area out of the landfill on an old road which could have been a function of past mining and through Benny Rager where I’m going to drop off an Easement Agreement which will permit us to come down their driveway, past their place and then along an old road that used to be an entrance to a deep mine. We’ve made arrangements with the Game Commission and they’re going to allow us to put our pipeline down that old road alignment until we intersect Wagner Road. At that point what we’re asking from Jackson Township is for permission to put our pipeline in the right-of-way of Wagner Road from the Game Commission Road to the East Wheatfield Township boundary. Yurasek asked whether the Water Company or the Sewer Authority had an opportunity to look at this. Shaffer said he knew there was a water line in place in East Wheatfield. Will Michaels said we should have had that water up our way. Shaffer said whatever side of the road the water line’s on assuming that someday it may be inter-connected with the Authority in this Township, both sides of the right-of-way are currently vacant with the exception that there’s power lines along some places. We can work on the opposite side of whatever side that water line’s on and preserve ability for that water line to come through. Will Michaels asked how deep and how wide would it be. Shaffer said final design wasn’t done yet but it will either be 4" or 6" and won’t be any bigger than 6" and it will be at least 3 ˝ feet from the crown of the pipe. Will Michaels asked if it would be pretty high pressure then. Shaffer replied Lynn Energy was in the process of upgrading it’s system and new wells were being added that would deliver into this to increase the flow. It’s currently operating at about 200 psi but it’s likely to go to about 250. Barbin said a real high pressure gas line of 500 or 600 could be hazardous. We want to specify what the upper limit is and not give you a blanket to do anything you want and the upper limit for psi needs to be written into the agreement. Shaffer said 300 would be fine for an upper limit and we’re expecting to meet with Lynn Energy next week as they will have a Compression Study done by the end of this week. Barbin said we can use language saying we won’t be unreasonable but we won’t unreasonably okay something either like a super gigantic high pressure line that could hurt somebody. You may not be here and somebody totally different could be running the line or even somebody from Saudi Arabia. It would only involve the part of Wagner Road to the East Wheatfield Township line.
Yurasek asked if the people along that line would be offered gas or not. Shaffer said the Pennsylvania Utility Commission prohibits us from selling to any individuals. Supervisor Baker said that is probably the reason for the co-op JAREC. Shaffer said the only way we can get this project up this Fall is to be able to use the Township roads both in Jackson & East Wheatfield Townships. County National Bank is going to provide us construction financing but a number of conditions have to be fulfilled before they’re willing to let loose of the money and one of those primary conditions is that we have to be able to demonstrate that we have the rights-of-ways or easements necessary to build the pipeline so we’re working real hard to fulfill their conditions by the middle of July. Other conditions include having an evaluation of the project done and having all the environmental permits. Yurasek asked, Don’t we need to have the Water Authority since they already got a project on the books in putting a water line down there so before we give you right-of-ways we ought to know where the water line is going and we’ve already committed to the water line. Barbin said Larry Custer of the Cambria County Redevelopment Authority has engineering plans for a water line and it’s not coming in from Indiana but would be coming in from Chickaree Hill Road. Shaffer said it only makes sense that they would inter-connect from a pressure stand-point. Barbin said it was inter-connection that anybody’s talking about. Shaffer said he was thinking from a service & reliability stand-point, if that water line was looped and they were inter-connected, the pressures would be far more even across the system than they will be if they remain independent. Barbin says that’s a separate issue. Shaffer said we can work with the Water Authority. Barbin said before we sign the final Highway Occupancy Permit, we would have to have clearance that it’s not going to interfere with any current construction plans. Larry Custer has plans. Some discussion took place about the cost of the water line from High Ridge versus Jackson Township Water Authority. Barbin said the point for today is that you don’t want somebody digging where a water line is proposed for construction. Barbin asked about crossing the road. Yurasek said there were road culverts all the way along there and when you dig out for culverts you don’t always just dig two or three feet deep. Shaffer said what was discussed with East Wheatfield was pipe 3 ˝ feet deep unless working in the area of a culvert and then we should be 2 feet below the invert of the culvert. Supervisor Stephens said we need to find out what side of the road this water line’s going on and it has to be so many feet from another line. Barbin said it has to be 18 inches from a sewer line. I don’t know that exists for a gas line but they may want to be away from anybody because they don’t want to be out repairing.
Shaffer said one way they could benefit the Water Authority and on the upper right hand side there are 3 ˝ acres on what is considered to be wetlands. In Pennsylvania there is a General Permit and an Individual Permit. A General Permit takes 30 days and an Individual Permit takes 5-6 months. If you cross more than 300 feet of wetlands you can’t get a General Permit. We want approval from the Township to dig up those culverts, put in our line and put the culverts back. The Water Authority could be faced with this same issue. When we dig up the culverts we could put a steel sleeve through for them and when they do their work all they would have to do is put their line through the sleeves. Yurasek asked if the culvert pipe was deteriorated could that pipe be changed and this way it would be clear for so many years. Shaffer replied yes and that’s not an issue. Barbin asked what kind of pipe. Shaffer said there were two options available. . .steel or a pipe called fiber-smart which is polyester plastic which gets it strength from being encased with fiber wound inside fiberglass and it’s rated at 750 gsi. Barbin asked about crossings on the road. Shaffer said there was actually two separate crossings. . .one by Rager Road and one carrying Rummel Run under the road. They’re both 4 ft. pipes. Barbin what kind of pipe was in there right now. I’m assuming it’s corrugated right now. Bracken said we’ll probably put plastic in there. Yurasek said he put steel pipe in down by the Fire Hall about 20 years ago and that’s still in good shape. Discussion continued among those attending on the different types of pipes that could potentially be used and the benefits or disadvantages. Shaffer said one important thing to note is that there is no acid mine drainage in Rummel Run and you got a neutral pH. Shaffer added when we put the culverts back in we can’t make them any longer than what they are now or we’re going to be in the wetlands. That means we’re not going to be able to put much more additional fill or cover on top of the pipe. An engineering analysis may be necessary to see what will work best in this situation. Barbin said you’ll probably be providing us with a clear engineering drawing at some point. Additional discussion took place as to possibly which side of the road the line would be on. Shaffer said there is wetlands on both sides of the road so the only place we can put our pipe is within the footprint of the culvert. Shaffer asked what was the history on those culverts ever flooding. Will Michaels said pretty low, I don’t ever remember them flooding, not even in the ‘77 flood. Shaffer said given the nature of the watershed, my guess is they’re bigger than necessary. He said perhaps instead of 1 48" we could put in two 32" ones and then we can get more cover. Additional discussion took place on what the possibilities could be in the type of pipe used. Discussion also took place on possible alternative or shorter routes that could be used for the pipeline. Shaffer continued that one of the problems they’ve had is looking at old deeds and trying to establish locations such as the old oak tree or stone wall which aren’t there anymore. We’re going to do anything we can do to cut construction cost in terms of a shorter more direct route. We need an agreement as quick as possible that allows County National Bank to have some comfort that we can put our pipe in the ground and get that as quick as possible which will free of construction money. In the mean-time we can work with private landowners to see if the route of the pipeline can be shortened. Barbin said you are going to talk to Larry Custer about the water line project. Shaffer replied I’m sure we can benefit the project.
Shaffer said the last item was that as a function of working with the Township and hosting our plant, we proposed an indefinite period fee 5 cents per mnbtu’s that flow through the pipeline which is 5 cents per million btu’s. Barbin asked how much is a million btu. Shaffer replied 1,000 cubic feet. Barbin asked if an mnbtu was equivalent to an amp. Shaffer said very close. Will Michaels asked are you going to give the private landowners the same. Shaffer said no, we’ve reached an agreement with Mr. Rager including re-installing a water line, upgrading his driveway and paying any attorney fees. Baker said I suspect we’re going to have some pretty good engineering fees in this ourselves. You said this nickel equates to an approximate number. Shaffer said initially you’re going to put out somewhere in the vicinity of 432,000 mnbtu’s which would equal approximately $21,500. Over 15 years the volume of gas is going to grow considerably from that plant. Barbin asked how much volume do you project in four years. Shaffer said about $700,000. Barbin said that would round out to about $35,000. Baker mentioned a line proposed at the other end coming out of the landfill in the future up to Dishong. Shaffer said we’re not proposing to go along Dishong with the gas line. We’re proposing to tie in to the Three Rivers Pipeline owned by Equitable. There’s a proposal to build a pump station and a forced main of leechee out of the Landfill down along Dishong Mountain Road. Baker asked if the nickle proposed was for gas pumped out of just the bottom or all gas out of that plant. Shaffer said it is on all gas out of the plant. Waste Management was very adamant that we don’t call this a Host Community Benefit because they could be faced with this at all of their other landfill gas projects and currently there isn’t anything similar to what is proposed here. Barbin said we don’t generally charge for highway occupancies. We make them do it right and meet conditions but don’t normally charge rental. I suggest we get the agreement up front because after there is no bargaining position. You’re doing several good things for these people as this goes on including the sewage, Act 537 plan and the Highway Occupancy, permits and zoning. They still have to get construction permits from the County but we’re agreeing not to throw obstacles in their way also. Shaffer said there are no other gas projects he’s aware of that pay their host community fees. We volunteered to create it up front to try to promote good will and I think it’s a good deal for the Township. Keystone Renewable Energy is the developer but the actual project assets are under a limited partnership called Rager Mountain LP and the assets are going to be conveyed to JAREC who actually hired Keystone to develop and operate the project. Barbin added that the Cambria-Somerset Authority would actually own the line. Shaffer said he anticipated that to be the case. Barbin asked how can we assure our deal with Keystone carries through others in the future. Shaffer said the agreement should be made with Rager Mountain LP as that’s where all the assets of the project are. They have a lease for the plant and the lease with Waste Management along with gas rights and the gas bill contract with JAREC are all with Rager Mountain LP.
Barbin said the motion would be to grant a Highway Occupancy Permit upon acceptable language in the agreement acceptable to the Township Solicitor and Township Engineer to put a pipeline along Wagner Road from the Game Commission right-of-way near the Rager property to Wagner Road at the County Line for a 4 or 6 inch natural gas pipeline carrying no more than 300 pounds per square inch to be 3 ˝ feet covered from the top of the pipe in the ditches and deeper in the culverts so that there is at least 2 feet from the top of the gas line and the bottom of the culvert and approval to put through the culverts that carry Rummel Run and unnamed tributary. He said on the culverts carrying Rummel Run you can excavate and place your lines under the culvert but the placement of materials will need the approval of the Township Engineer. At the same time we issue the Highway Occupancy Permit we will need the agreement to issue 5 cents per mnbtu for all natural gas produced at the Laurel Highlands Landfill Gas Recovery Plant. This agreement needs to be recordable. Additional discussion took place as to where possible shut-offs may be necessary and what the possible cost could be. Yurasek said you need something to shut the line down to isolate any problem and remember when there was the fire up on the mountain. Barbin said it could have blown the top off the mountain. Yurasek said we could have had a disaster if there weren’t shut downs everywhere. Barbin said I’ve been told the whole top of the mountain burned off. Shaffer mentioned that the one time there was the fire, that line was on the ground instead of being buried and operating at 3300 psi as opposed vs. 250 psi. Baker said the casing for the water line should be mentioned in there also. More discussion took place on making sure residents along Wagner Road are protected and possible language that may need added to the agreement. Barbin suggested that there be a control valve at the point of connection and at some point between Wagner Road and Betsy Line in Indiana County.
Stephens asked on the five cents is there any way we could have a cost-of-living on certain yearly increments or some specified time. Five cents twenty years from now may only equal what a penny is now. Shaffer said I wasn’t authorized to do that coming in here. As the volume grows over time, the dollars are going to grow also. What’s $20,000 initially could be $30-35,000 as volume increase. Stephens said based on $700,000 max what started out at $21,000 could end up being $37,000. Shaffer said with the agreement with JAREC to help them grow in jobs over the years, the gas price in the agreement over the years declines. Stephens said I’m in favor of it coming in and the dollar value but could it be re-negotiated at some point in time so specified in this agreement. Discussion continued as to various possibilities of renegotiation versus an established guaranteed rate. Shaffer said his real problem with renegotiation is the bank will say Jackson Township could throw something into the wrench here and this project could shut down. Shaffer said if gas prices would go down the project could be jeopardized with increasing costs and fees and if the project shuts down nobody would benefit. Barbin said if a gigantic discovery of natural gas it could bring prices down including an adjustable fee based on the gas price but it’s highly unlikely. What if the economy went down that affected jobs. Shaffer said we entered into a fixed price contract with JAREC. Barbin said a proportionate fee could be in the agreement taking into consideration the contract made with JAREC so that both parties would benefit or be protected. Shaffer suggested leaving the nickle on the gas sold to JAREC and the proportionate rate only on that sold on the open market. Barbin said that would be fair and we could explore what the correct language would be in the agreement.
Motion Baker, second Stephens to amend the original motion to add the following: Approve Highway Occupancy Permit on Wagner Road from the County Line no further than the Game Commission right-of-way intersection with Wagner Road and the Rager Property for a 4 or 6 inch natural gas line and any necessary telemetry devices to operate at no more than 300 pounds per square inch. Changes to operating conditions require the consent of the Township but consent will not be unreasonably withheld including the right to place pipe from under existing culverts at Rummel Run and an un-named tributary including removal of the culverts, providing culvert replacements according to specs approved by the Township Engineer and a steel sleeve sufficient to carry the water line for the Wagner Road Water Line Project being installed at the same time, providing shut-off capabilities at the plant and at the inter-connection with the Betsy Line, approval of condition upon an agreement satisfactory to the Township Engineer and the Solicitor and an Agreement providing for a five cents per mnbtu Highway Occupancy License Fee with some language for proportional adjustments. Vote-3 yes.
Chairman Dave Bracken announced that the next scheduled meeting would be held on Thursday, June 30, 2005 at 7:00 p.m. at the Jackson Township Municipal Building.
Motion Baker, second Stephens to adjourn the meeting at 9:20 a.m. Vote-3 yes.