Business Spotlight

UGI Brings the Benefits of Natural Gas to Pennsylvania Consumers

Spring 2016 Catalyst

UGI logoUGI is helping businesses and homeowners take advantage of the economic and environmental benefits of natural gas, Pennsylvania’s clean, plentiful and local natural resource.

The discovery of significant Marcellus Shale natural gas reserves in Pennsylvania over the past decade has made the Commonwealth an energy production powerhouse. UGI is uniquely positioned to benefit from these new natural gas supplies, as much of the company’s service territory sits directly atop the Marcellus Shale. This connection to the plentiful supply of locally produced natural gas benefits both UGI’s customers and the state’s economy.

What is the impact of Marcellus Shale natural gas on Pennsylvania’s economy? As an example, UGI added a record number of commercial and industrial customers during 2015, fueled by conversions of existing businesses as well as new businesses locating within UGI’s service territory.  In addition, the availability of plentiful supplies of clean, reasonably-priced natural gas have made Pennsylvania a magnet for businesses with significant energy needs.

UGI also assists companies to become more innovative as they make use of the Commonwealth’s natural gas resources. In addition to the conventional uses of natural gas for heating, water heating, cooking and traditional commercial and industrial applications, new technologies such as Combined Heat and Power and Compressed Natural Gas vehicles have generated significant interest.

In a nutshell, CHP is the simultaneous production of electricity and heat from a single fuel source. In traditional applications, approximately two-thirds of the energy used to create electricity in power plants is lost during the generation process. CHP is a system that reclaims lost thermal energy by using “waste” heat from the generation process to provide heating to buildings that are connected to the CHP unit. CHP technologies increase the energy efficiency of power generation by up to 80 percent. CHP applications have been installed in industrial parks, college campuses, military bases and even communities that are close enough to power generation sources to use the recovered heat.

An additional example of innovative natural gas technology is the use of CNG as a vehicle fuel. CNG burns more cleanly than gasoline or diesel fuel. Natural gas vehicles are a game-changing sustainability solution, reducing CO2, CO, NOx and VOC emissions by as much as 90 percent. CNG vehicles also offer the additional benefit of reduced engine maintenance requirements. As a cleaner burning fuel, CNG vehicles experience less engine wear and require fewer oil changes.

A number of organizations have switched their vehicle fleets to CNG and have installed on-site CNG fueling stations. In addition, the number of public CNG fueling stations continues to grow, providing the opportunity for small businesses as well as residents to benefit from natural gas vehicles. There are currently 18 CNG filling stations within the UGI service territory, 15 of which have been installed in the past two years.

The Pennsylvania Department of Environmental Protection recently renewed its Alternative Fuels Incentive Grant program as part of an effort to improve the Commonwealth’s air quality and reduce consumption of imported oil. Significant funding is available to retrofit or replace fleets for school districts, municipal authorities, political subdivisions, nonprofit entities and businesses. AFIG grants cover up to 50 percent of the cost to purchase CNG vehicles or retrofit existing fleet vehicles to operate on alternative fuels such as CNG.

Here are a few examples of Pennsylvania companies within the UGI service territory taking advantage of expanded natural gas supply availability and the use of new technologies:

  • Procter & Gamble — P&G Paper Products Company in Wyoming County worked with UGI last year to add a second fast-fill CNG fueling station at its northeastern Pennsylvania facilities. P&G opened its first CNG fueling station in 2012 and has converted 74 of its yard and heavy-duty freight trucks to run on natural gas —  one of the largest CNG fleet conversions in the United States. The second station allowed P&G to double its CNG fleet to 150. The company said the project will generate annual fuel cost savings of more than $1 million. The environmental benefits will be equivalent to removing emissions from 550 cars.
  • Pennsylvania State Employees Credit Union — PSECU, with UGI as a partner, installed a Combined Cooling, Heat and Power system in its new Harrisburg facilities. In addition to generating electricity and heat, the PSECU system also provides cooling for the facility during the summer months. The PSECU system uses four natural-gas-powered microturbines to generate electricity for the massive building. When the system generates more power than is needed, the excess electricity can be sold into the regional power grid. Heat from the turbines is used for heating, hot water and humidification, and to power an absorption chiller that cools the credit union’s large central Data Center. PSECU anticipates that it will take only 6.2 years for cost savings to pay back the purchase cost of the CCHP system.
  • Geisinger System Services — Geisinger converted its Marworth Treatment Center in Lackawanna County to use natural gas delivered by UGI. Geisinger said it anticipates annual fuel costs will be reduced by up to 70 percent and that carbon dioxide, sulphur and nitrous oxide emissions will be reduced as well. An onsite CHP system is being considered for efficient, simultaneous production of electricity and thermal heat — an innovation that has worked well in several other Geisinger facilities.
  • GEO Specialty Chemicals — GEO worked with UGI to connect its operations to a nearby pipeline and stated that doing so was “about the ability to survive.” According to Plant Manager Brad Osborne, connecting to plentiful natural gas energy resources assures that “we can continue to compete nationwide and be able to expand our plant when needed.”
  • State Operated Facilities — Several state-operated facilities — including State Correctional Institutions at Dallas, Retreat, Waymart and Camp Hill — have worked with UGI to convert to natural gas from other more costly fuel sources to reduce costs and decrease emissions. 

Residential customers have also discovered the advantages of natural gas. Over the past six years, more than 55,000 homeowners have converted to natural gas from other fuels. There is little wonder why: most UGI residential customers have seen their monthly bill drop more than 40 percent since 2008.

UGI is also working aggressively to extend natural gas service to unserved or underserved communities within the company’s service territory.  To assist in this effort, UGI launched the “GET Gas” program in 2014.  GET Gas is an innovative pilot program that has received nationwide attention.  It allows customers to pay a monthly surcharge over a 10-year-period to help defer the cost of extending service to areas that typically could not economically receive gas service. UGI has received a tremendous response to the GET Gas program, as communities throughout Pennsylvania have expressed interest in bringing natural gas into their neighborhoods.

These initiatives are just part of a long history of serving Pennsylvania’s energy needs. UGI has provided the “Energy to do More” program for more than 130 years. UGI’s spirit of innovation dates back to its founding in 1882 in Philadelphia as UGI Corporation. Today, UGI Utilities, Inc. is a subsidiary of UGI Corporation, a Fortune 500 global energy company.

Safety is a core value at UGI. Committed to providing safe and reliable energy service, UGI is in the midst of a $1.2 billion infrastructure betterment initiative designed to replace all pipelines in its system made of non-contemporary materials with those made of contemporary materials. UGI is replacing approximately 65 miles of mains each year toward this commitment.

UGI is also deeply committed to the vitality of the communities it serves. UGI is celebrating the 25th anniversary of its unique partnership with “Reading Is Fundamental.” Through the UGI-RIF program, UGI has distributed over 1.2 million books to more than 400,000 first-grade students in hundreds of schools throughout the company’s service area. UGI employees have provided more than 15,000 volunteer hours helping children learn the joy of reading.

UGI has also provided more than $1 million in annual support for programs that focus on career awareness; Science, Technology, Engineering and Mathematics activities; and the prevention of “summer slide” in reading and other subjects. In addition, UGI and its employees provide both leadership and financial support to United Way campaigns across the Commonwealth each year, and sponsors the Home Fire Preparedness Program of the American Red Cross. In addition, UGI employees provide thousands of hours of service each year for community organizations, fire departments, churches and other organizations throughout the Commonwealth.

UGI Utilities, Inc., serves approximately 680,000 customers in 45 Pennsylvania counties and is one of the largest natural gas distribution utility companies in the Commonwealth. UGI is headquartered in Reading, PA and its natural gas service area includes the cities of Harrisburg, Lancaster, Reading, Allentown, Bethlehem, Scranton, Wilkes-Barre, Williamsport and Hazleton. UGI also operates an electric utility in Luzerne and Wyoming Counties.

UGI. Helping to make Pennsylvania better today and stronger tomorrow.

Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.