In their special meeting on September 3, 2014 the OPA Board voted to extend the franchise agreement made in 1993 with Eastern Shore Gas Company (ESG), which sold its rights as the franchisee-gas supplier to Sandpiper Energy, Inc. (a subsidiary of Chesapeake Utilities, Inc.) last year. This latest extension, which is for an indefinite period subject to termination by the OPA or Sandpiper, was made to allow for continued negotiation of a new agreement to reflect the current circumstances, including the conversion from propane to natural gas.
The 20 year term of the 1993 agreement was initially extended last year at the suggestion of ESG because it was in the process of selling its assets to Sandpiper. At that time the sale had not been approved by the Maryland Public Service Commission, which subsequently did so and approved the current “tariff” that sets the rates for the bills issued to Sandpiper’s customers. It should be noted that during the conversion process these rates are the same for all Sandpiper customers whether they are being served by the propane distribution system or have been converted to natural gas.
The Board has made every effort to engage Sandpiper in discussions that might lead to a mutually beneficial agreement and is continuing to do so in as expeditious manner as possible. During that period, the 1993 agreement has been extended several times, and both the OPA and Sandpiper have submitted various draft agreements. A joint meeting will be held shortly to discuss remaining concerns and specific language of a final draft for review by the members.
The Board understands the desire of some of our OPA membership for the lower energy costs that have been long promised with the introduction of natural gas. At the same time the Board must fully understand how that promise will be met and assure our community has appropriate protections. The Board must also consider the interests of 55% of our members, who own their portion of the OPA right of ways, but do not use gas, or who cannot economically convert from the propane distribution system. Moreover, we know from our experience with other franchises that any agreement must contain provisions that: (1) ensure responsiveness to our member issues, (2) minimize disruption to the community, (3) provides OPA the ability to help represent our members’ issues, (4) ensure an equitable negotiation at the end of the contract period, and (5) offer residents options with regard to how energy is obtained,.
With regard to the latter, the Board and Administrative Staff are assembling cost data to aid members in making intelligent decisions regarding conversion. Ocean Pines does not have a one size fits all energy solution .