m. vi FEASIBILITY STUDY REGION NINE REGIONAL PLANNING AND DEVELOPMENT COUNCIL ‘GAS PIPELINE FEASIBILITY PROJECT BERKELEY AND JEFFERSON COUNTIES, WEST VIRGINIA = INDEX - Introduction A. Project Overview B, Project Tear, Review Committee and Key Personnel CG. _ Project Stakelotders Current situation A Overview 1B. _Bxisting Natural Gas Supply and Inftasructore © Customers D. —Newd for Project Future Situation A. Proposed Outsome B. Assumptions Used to Determine Demand C. Generel Coasiderations Regarding Pipeline Construction Alternat General ‘Options for Gas Service Peak-Shaving Facility Do Nothing. pose Plan Recommendation and Fundi 1g Scenarios A. Selection Criteria B. Determination of Best Option ©. Project Financing Options Environmental Information Area Description Air Quality ‘Water Quality ‘Transportation Noise History Archacologi = RpORE 3 13 4vm vm. ROROZEr RST EO Wildlife and Bndangered Species 17 Eneray 18 Construstion 8 Flocd Blevation 18 ‘Toxie Substances 18 ‘Misgation 18 Permits 18 Unavoidable Adverse Impacts 19 Relationship Between Total Short-Term and Long-Term Productivity 19 Irreversible and Instriovable Commitments of Resourcas 1» Parks, Recreational Areas or Open Spaces 19 Groundwater 20 ject Summaries Project Feasibility Summary a Project Cost Summary a1 Schedule 2B Land and Rights.of Way B Public Benefit 2B Evidence of Compliance a Project Documents ROZErRASOEOmESA SP Jefferson County Natural Gas Line Bstension Pro-Feasibility Analysis Eastom Panhanille Natural Gas Expansion Feasibility Study - Procurement Guidelines Eustera Panhandle Natural Gas Expansion Feasibility Study Scope of Work _Engineesing Service Agreement bewween Region Nine and The Thrasher Group Economic Impact of a Natural Gas Pipeline in Berkeley & JetTerson Couaties ‘New Customer Matix for Peak Daily Flowrates ‘Mouniainoer Gas Company of WY - Martinsburg System Overview Breakdown of Cost for New Pipeline - NORTH OPTION —31.5 Miles Breakdown of Cost for New Pipeline BAST OPTION ~21.5 Miles “Memo from Steptoe & Johnson -“PILOT” Arrangements Map I — Region Nine Overall Project Map Map 2— North Option Map May 3 ~ Bast Option Map ‘Map 4—South Option Map Map $ ~ MGCWY System and Existing Industrial and Business Pass ‘Map 6 ~ Map of Existing Interstate Natural Gas Pipelines Near Region NineFEASIBIUTY STUDY REGION NINE REGIONAL PLANNING AND DEVELOPMENT COUNCIL GAS PIPELINE FEASIBILITY PROJECT BERKELEY AND JEFFERSON COUNTIES, WEST VIRGINIA. |. INTRODUCTION A. PROJECT OVERVIEW ‘The Region Nine Reional Planning and Development Council (“Region Nine") exits to assist local governments in resolving their common problems, engage in area-wide comprehensive and functional planning, identify, apply for, and administer ceriain federal and stato grants, and provide a ronal focus in regard to multiple programs undertaken on an area-wide basis, The ares of focus for Rogion Nino consists of Borketey, Jffirson, and Morgan Counties, located in the eastern panhandle of West Virgin In March 2014, Region Nine solicited requests for professional engineering services to perform & ‘study with related research and analysis to detomnine the fesibility of expending the supply of natural gas in the castem panhandle region of West Virginia and to identify the most economically beneficial route for a proposed natural ges pipeline that would deliver and distribute natral gas into the three-county area served by Region Nine. In Aupust 2014, Region Nine executed an agreement with the Thrasher Group, Ine. ("Thrasher") to perform the study. Thrasher is a WV-basel engineering, architecture and design firm with direct experience in the upstream (drilling and exploration) and midstream (pipeline and processing) cil end ges indusiry in WV, PA and OH. Is experience and knowiedge in tbe energy rena provides Thrasher @ unique qualification to perform tis study. ‘The results ofthe research along with options for service and relate study findings are inchuded within tis eport B. PROJECT TEAM, REVIEW COMMITTEE AND KEY PERSONNEL ‘The Thrasher Project Team consists of ‘Woody Thrashes, Tom Marion, Michael Hines - The Thrasher Group Eric Bowen MS, John Deskins PhD, Christiadai PhD - WVU BBER ‘Michael Griffith - Miche! Griffis and Assoc Bill Roach - W. 8, Rosch and Associates Sinnmy Staton ~Steton Consulting, LLC Toka Stump ~Stepioe & Jobson ‘The Region Nine Project Committe is composed of Steve Christin — Berkeley County Development Authority 1olin Reisenvieber ~Joffeson: County Development Authority Patsy Noland Jefferson County Cormmission Sim Barnhart — Berkeley County Counc Mark Baldin— City Manager Martinsburg WV ‘Other key persoanl end subject mater experts involved wih he project inlude Bill Cla, Executive Ditector ~ Region Nine ‘Tetsi Busens, Executive Diseot ~ Moran County Bosnunnic Developurent Auority ‘Moses Skaff, Larry Meador, Tom Westfall, Rich Pistner ~ Mountaineer Gas Compsny Kris Hopkins, Tedd Hooker, Nie Diehl = WV Development Office PROJECT STAKEHOLDERS Primary project stakebolders have a vested interest in the potential availability of natural gas service in the Region Nine area, Several of these stakeholders have assisted with guidance, ‘counsel and information gathering throughout the study, as needed, individually and/or as & ‘up. Primary stakeholders are noted below. Region Nine and its three county development entities, Jefferson County Development Authority CICDAY, Berkeley County Development Autherity (*BCDA") and Morgan County Economic Development Authority (“MICEDA"), commissioned this study to understand the opportunities, challenges, options and related costs of bringing additional natural gas supply into the eastem panhandle region, specifically Jefferson and Berkeley Counties. Mountaineer Gas Company of West Virginia (MGCWV") is the only local distribution company LDC") that + authorized and approved by the West Virginia Public Service Commission (WVPSC’) to operate a netural gas utility to support the commercial and sesidental natural gas market in Region Nine, ‘The West Virginia Development Office (“WVDO") is another interested party. Its mission isto “filmprove the quality of life for all West Virginians by strengthening our communities and expanding the state’s economy to ereate more and better jobs.” Another key stakeholder in aggregate isthe general population of the easter panhendle region of| ‘WY, whose lives and livelinoods may be positively impacted by the construction of a natural gas pipeline and the potential availability of natural gas servies in the arcs. A subset of this group ‘would be landowners whose property may be impacted by construction and routing of the gas pipeline Finally the company that would build andor operate the pipeline would be a stakeholder, along with the entity or entities hat would be financing the project.PRELIMINARY PROJECT TIMELINE Pipeline construction timelines can vary greatly depending upon the many unknowns and variables encountered dusing scoping, planning and design. The project team has compiled 3 preliminary project simeline bssed upon past construction experience and related research. This grySrmommpaEe inary project schedule is shown below: ‘Submit Final Report to Region Nine Solivitand Obtain Project Financing, ‘Announce Open Sesson for Nonbinding Agreement Design, Routing, Survey, Mapping. Public Project Announcement FERC Application Pre-Submittal Bogin ROW Acquisition and Environmental Studies FERC Application Submittal Permits Submitted and Approved FERC Application Approval ‘Contractor Bidding and Negotiation ‘Construction and Testing In-Service wns i9n013 ~ 612015 3/2015 -4"12015, 3/2015 — 612015 3612015 ‘anu20is 4.2015 91172015, 1012015 202016 2/016 312016 4/2016 ~ 3/31/2017 42017CURRENT SITUATION A. OVERVIEW Advances in horizontal drilling tochaologies and hydraulic fracturing processes have made the ‘Appalachia Besin one ofthe leading regions in the United States for nataral gas exploration and production. However, the Eastern Panhandle region of WV hes not shared in the natural gas industry growth experienced by ther vegions of WV, primarily the northern half ofthe state a 3 result of the development of the Marcellus and Utica Shale formations. Both of these prolific natural gas-bearing shale formations are located west of the Region Nine area, There are no known proved natural gas eserves or economically-developable gas-bearing formations in the ‘easter panhandle are, ‘As a result, compared to cther regions of WY, the castem panhandle has a much lower naturel ‘gts utilization rate primarily because it is not located in «natural yas producing region, Because Of this, other energy sources such as electricity and propane are the primary energy sources of choice for residential, commercial und industrial users. ‘The Eastern Panhandle region of WY is one of the top economic growth engines in WV. However, continued economic growth is largely dependent upon having natural gas service available to meet residential, commercial and industrial demand. Curent, natural gas service is ‘only available in southern Berkeley County, parts of the greater Martinsburg area and one site in Jefferson County, the former Eastman Kodak plant ‘The lack of natural gas service in the Eastern Panhandle has become a limiting factor in the ‘continued commercial and industrial growth ofthe cegion. Businesses and industries thst would have otherwise coasidered the region fer expansion and development have located in other regions and states a¢ result of the lack of natural gas availablity and limited prospects for improving the situation in the nea-teem. Homeowners secking natural ges utility service have Timited options as wal B. _ EXISTING NATURAL GAS SUPPLY AND INFRASTRUCTURE ‘The natural gas supply that is curently available in the Eastem Penkandle region is brought in solely via pipeline to the LDC operated by MGCWV, which is headquartered in Charleston, wy. MGCWV has been granted the sole franchise to distribute natural ges to residential, industil, commersial and institutional customers in Berkeley and Jefferson Counties by the WVPSC. MGCWY"s rates and operations are regulated and monitored by the WYPSC. MGCWV feeds the LDC sysiem with natural gas acquired on the spot market off-system, Purchased gas is then tcansporce into northem Virginia via Celumbia Pipeline Group's “WB” {4lso know as “VBS") interstate pipeline that commences neat Broad Run, WY, and terminates ‘near Baltimore, MD.Delivery of natural gas from WE is delivered frst to Washington Gas & Light (“WGL") via tap ‘oa WE nae Cleatbrook, VA, and then delivered by WGL to MGCWY at the WV/VA border. MGCWY operates the naturel gas pipeline that transports the natural gas ftom the interconnect with WGL at the WV/VA state line. Ths pipeline rns approximately 13 miles through southemn [erkeley County to its terminus point northeast of Martinsburg. “This pipeline was eequired ftom WGL by MGCWV in 1998, The pipeline is curceatly limited to 426 pounals yer syuate inde gauge (PSIG, line pressure is reduced to 50 PSIG when the fa centers the plastic low pressure distribution system. “The LDC gas infrstructse is composed of approximately 730,000 linear feet LE") or 138 niles of distribution main natura gas pipeline, split into 260,000 LF (49 miles) of steal pipeline and 470,000 LE (89 miles) of plastic pipeline, This system is situted in the general Mattinsburg regional rea, Tae LDC trunk fine consists of 6” and 8" stesl pipe which is generally located within the ‘Martinsburg city limits. I hasan operating pressure of 426 pounds per square inch (“PSI”) and @ peak howe load rating of 675 thousand cubic feet (“MCF”) per hour, or 16.2 million eubie feet per day (*MMCFD"). ‘The system currently operates st approximately 85% of maximum capacity, which is @ safe and reliable capacity rating. However, there is lite fo no opportunity for increasing capacity given the system's current operating capacity, system utilization and load, MGCWY has been granted a franchise to also provide natural gus service to Jefferson County by the WVPSC. However, the only natural gas service that extends into Jefferson County serves just ‘one fiity, the lithographic plate manofacturing plant owned by Eastman Kodak Co,, which is situated just inside the border with Berkeley County, This plant is aot curently in operation enw 18 of October 2014 was listed as being for sle. No other locations within Jefferson County have natural gas service atthe time that this study wes performed in 2014. A Pre-Feasibility Analysis was performed for the Jefferson County Development Authority by Moreland Advisors, Inc. in December 2013 (see Project Documents, “Jetferson County Natural Gas Line Extension Pre-Foasibility Analysis”), This teport discussed the historieal and current rataral gas supply issues facing Jefferson County and the challenges and constraints that would peed to be adressad in onder to bring substantial gas supply into Tefferson County. ‘The Pro-Fensibility study proposed utilizing the natural gas line that extended from Martinsburg to the former Eastman Kodak as a feed line into Jefferson County. However, tis line isnot large ‘enough to offer much, if any, additional capacity into Jefferson County. Further, the existing MGCWY LDC thet would feed this spur line does not have te eapacity 1o handle the additions! volumes that would be needed to support now industrial and commercial growth in Jefferson and. Berkeley Counties.CUSTOMERS Region Nine does nol directly or indirectly serve customers with gas service; natural gas utility servie is provided solely by MGCWV and itis assumed that MGCWY would be the sole utlty providing, new residential and commercial gas service in the event 8 new pipeline would be onstrated, MGCWV"s eastern panhandle LDC operstes almost exclusively within the borders of Berkeley ‘County, serving a cstomer base located primarily in and around the greater Marinsburg area “The LDC supplies natural gas to epproximately 5,600 customers, split between 4,600 residential snd 1,000 industrial, commmercil and institutional customers. For residential customers, itis assumed that only new home developments would be the primary ‘users of residential natural gas service. Research indicated that most existing homeowners whose homes used other energy sources besides natural gas, eg. propane or electric, would likely not switch to natural gas even if it was available. The primary reagon is tha the cost to switch from one energy source to another and the ‘elated cost of retofitting or replacing existing appliances would be prohibitive. Also, new infrastructure would need to be installed in existing neighborhoods, which is costly and time- consuming. Residential developments with existing propane distribution systems would be difficult to ccavert fo natural gas due tothe logistical challenge of all users being prepared to convert their homes and appliances fiom propane to natural gas at the same time. Existing propane istabution system hardware and piping would likely require full replacement due to the sifferonces in natural gas (methane) and propane characteristics, pipeline pressures, transport ‘standards, physical properties and building/safety code requirements. Commercial customers may be willing to consider astural ges service depending upon physical proximity to gas willy service and cost to convert, among other factors such as Tong, term viability, regulatory pressures, and commodity costs, [Numerous entities have approached members of the Region Nine committee and stated that if natural ges wae available as an exergy source they would prefer to convert their facilites to be powered by naturel gas, The Pre-Feasbility Study indicated that the Jefferson County Schoo! Board would Fike t0 phsse their school buses from diesel-powered vehicles to natural gas powered veces. The availabilty of natural gas would factor heavily into the ease of the School ‘Board's decision fo convert thet existing fleet, Several businesses inthe Burr Business Park also voiood interest in converting their faciities to natural ges if service becomes available, Finally, University Healthcare is considering a replacement hospital for the Jefferson Medical Center, Getting natural gas to this new building is a key part of meeting the Joint Commission's aceretation requirement that te facility have two separate sources of energy.D. NEED FOR PROJECT “The Region Nine area curently has limited access to natural gas service. The area being studied js located in and around the greater Martinsburg area in central Berkeley County as well a the Roste 9 corridor in western Jefferson County. At the present time, there is no natural gas service in Morgen County and only one single service point lovated within Jefferson County. ‘The lack of natural gas service has severely limited the potentia! business and industrial growth ‘opportunities in the area. Having natural gts service in the areas of the major existing snd planned industrial parks would bolp to airact new industries tothe orea, which will in tum wil ‘reate more jobs, enhance the local and regional economy, and stimulate sustainable grovth in the region, Natural gas servie will sso allow residential developers inthe region to offer natural gas as a viable, and potentially cheaper, altemative to the current propane tank systems and electrical grids throughout the region. This in tum vill enhance the resurgence of residentil ‘growth and construction ofthe planned communities in the region.FUTURE SITUATION ‘A. PROPOSED OUTCOME Based on interviews and information gathered for this study, the project team determined thatthe best solution for expending natural gas service capacity inthe eastern panhandle of WY would bbe to construct 2 natural gas pipeline of adequate size and capacity to effectively support ‘anticipated demand over the twenty-year perio from 2015 to 2035, “This pipeline would most likely be a spur line fed from an interstate natural gas pipeline located within reasonable proximity of the exstem panhandle to minimize construction anf operating costs while maximizing espacity and throughput. For purposes of the study, the terminus of the pipeline would be located a a point where the Berkeley County Jefferson County line intersects with WV State Route 9, Funding for the project would most likely come from a combination of sources comprised of public and private financing to ho discussed later in this document Operation ofthe pipeline would be the responsibility ofthe owner, whois undetermined at this point a time. B, ASSUMPTIONS USED TO DETERMINE DEMAND ‘The project team reviewed current gas growth demand in other parts of WV and prowth trends in the Region Nine area 10 compile a model of anticigated natural gas demand in the easter, panhandle region, The team assumed thet projected population and industry growth would create an increase over {he earrent level of natural gus domand (16.2 MMCFD) in the Region Nine aea ranging from 35 MMCFD to 65 MMCFD over the twenty-year petiod from 2015 to 2035. This demand grow cstimate was then utilized to design a natural gas pipeline that would be appropriately sized 10 support the projected growth in natural gas use by residential and commercial customers ‘A demand growth increase of 35-65 MMCFD over the twenty-year period would equate fo aa approximate range mix of residential, commercial, industriel and/or power generation facilites 2s shown below on Table One, “Range of Ges Demand Growth Assuriptions:*‘Table One ~ Range of Gas Demand Growth Assumptions Facility Type ‘35 MMCED 30 MMCFD MMC Growth Growth Growth ‘Residential UnitwHomes |__1.575- 1,928 3,000 = 4,406 5750-8,250 Commercial Buildings 45-55 [S199 118 ‘Industrial Plants 6-8 10-12 rc Power Generation oO 0 0 “Total Approxamate Hur | $a] MMCED SSM ‘65.3 MMCED. GENERAL CONSIDERATIONS REGARDING PIPELINE CONSTRUCTION Foray pireline project, thee isa long list of considerations that must be evaluated as par ofthe ‘overall decision to move forward by the stakeholders. These considerations are listed below in ‘no particular order, Considerations include bu are not limited to: FERC jurisdiction and oversight Federal, stete and loa! regulatory climate Existing and potential customer demand Consiructability Availability of reliable ges supply Impact on landowners and existing land use Public safexy Environmental impact Impacts to historic and cultural sites 10, Project costIV, ALTERNATIVES. ‘A. GENERAL Region Nine is seeking to improve ity industrial growth via improvements to the natural £28 distribution system inthe area. The region wants to increase the amount of natural gas wvailable to the area by expanding the level of infstructure that is necessary to support large industrial provements to the existing system are limited because the curent system was constructed and is operated mainly a5 a distribution system, Gas distribution systems are typically limited in pressure to properly disburse natural gas et arate which is useful tothe customers B, OPTIONS FOR GAS SERVICE ‘With regard tothe general considerations noted above in Section Ill, C, "General Considerations {or Construction of a Nateral Gas Pipeline,” the project team researched the availability of natural gas in the general region surrounding the Region Nine area. Interstate natural gos pipelines are located to the north, east and south of the area. The project team assessed the universe of alternatives and identified three primary routing options for natural {gs service: The North Option, The East Option and The South Option, Each of the three options are listed below and detailed further ia the section, For purposes of consistency and standardization, each of the three Options is designed to terminate at & location detined asthe intersection point between Route 9 and the boader between. Jefferson and Berkeley Counties. For identification purposes in this study, this point will be called the “Pipeline Terminus.” Option 1 ~ The North Option ‘The North Option i « natural gas pipeline that would be constructed to connect the Pipeline “Terminus to a natural ges pipeline knowa as Pipefine 1804 (te “Mason-Dixon Pipeline”) tht is Tocated north of the WV cestera panhandle. The Meson-Diton Pipeline is owned and operated bby Columbia Pipeline Group (*CPG"). Tae North Option would be a 16° welded steel pipeline that would ran approximately 31.5 miles from the Mason-Dixon Pipeline to the Terminus Point, depending upon final routing. ‘As the team researched the issue of capacity on this pipeline, it detennined that additional jncremental capacity on the Mason-Dixon pipeline was not adequate to support the longer-term Gemand of the easter panhandle region, thereby rendering the North Option unfeasible a tis time. However, capacity tumback could potentially result in adequate pipeline capacity at some point in the fateAdvantage): 1, No compression facilities would be sequited, which minimizes construction and operating cost. 2, The pipeline could be potentially tapped wt a future point to augment the existing LDC system, Of te three routes, itis routed nearest to Cumbo Yerd, whichis the nortnernmost extent of MGCWY's existing gas service. isadvantape(s) 1. The Mason-Dixon Pipeline is curently fally-subscribed and as no. additional incremental transportation capacity available, which rules it out as an option for gas supply tothe eastem panhandle. Anticipated Cost: ‘At an average all-in cost per mile of $3,200,000 including a 25% contingency, the North ‘Option woald cost approximately $100,800,000 to design and construc. Option 2 ~ The East Option ‘The East Option is a natural gas pipeline that would be constructed to connect the Pipeline ‘Terminus o a natural gas pipeline located east of the WV eastern panhandle known as PL that is owned and operated by Dominioa Transmission, Inc. (‘DTM DTI recently upgraded PL:1 10 increase its capacity to support the reclassification of Dominion’s Cove Point LNG facility on Chesapeake Bay in MD from an import facility to aa expos facility. The East Option would be a 16” welded stecl pipeline that would run appreximetely 21.5 miles from the PL-1 Pipeline to the ‘Terminus Point, depencing upon final routing. ‘Unfortunately, further research into He issue of capacity availability on this pipeline revealed that no additional incremental capacity remained, thereby eliminating the East Option a5 @ potential route. However, lke the North Option, the possibility of future capacity tumback by ‘other shippers could result in available pipeline capacity a some future point, Adveningo(s 1. No compression facies would be required, which minimizes construction amd ‘operating costs 2. Atapproximately 21.$ miles in length, the East Option isthe shortest and leastexpensive pipeline option.{ Disadvantage(s): 1. The PL-I Pipeline is curently fully-subseribed and has 0 additional incremental transportation capecity availble, which rales it out as an option for gas supply 10 the ‘astern panbandle Anticipated Cost: ‘AL an average allen west per mile of $3,200,000 incleding # 25% contingency, the Bast ‘Option would cost approximately $68,800,000 to design and construct, Option 3 ~The South Option ‘The South Option is a natural ges pipeline that would be constructed to connest the Pipeline ‘Terminus to the WB Pipeline that is located south of the WV eastem panhandle in VA. The W-B. Pipeline is owned and operated by Columbia Pipeline Group (“CPG”). The South Option would ‘bea 16” welded ste! pipeline that would run approximately 33.0 miles from the W-B Pipeline 10 the Terminus Point, depending upon final routing Advaniage(s): 1. The gas supply source for the South Option, the W-B pipeline, is being expanded via the WB Xpress Project. The expansion will inerease eapacity to level that could support additional throughput demand of 3S-65MMCFD. ‘The possiblity of using backhaul arrangements would allow edétional incremental ‘volumes of gas to meet growing demand. 3. No compression facilities would be required, which minimizes construction and ‘operating costs. Disodvantage(s): |, The approximately 33-mile long South Option isthe longest ofthe three options and the most expensive option. 2. Unlike the Northern’ Option, the Southern Option roughly parallels the existing WGLMGCWV supply pipeline, which does not allow system augmentation at the northemmost point of MGCWV"s existing system. Anticipated Cost At an average all-in cost per mile of $2,200,000 including # 25% contingency, the East ‘Option would east approximately $105,600,000 to complete. C, PORTABLE LNG/PEAK SHAVING FACILITY OPTION ‘The Portable LNG/Pesk Shaving Facility option is not a vieble alternative to having full-scale reliable natural gas volumes delivered via pipeline. A Portable LNG/Peak Shaving facility maystill be beneficial as a ‘peakday” service to augment exiting natural gas service on cold days ‘hea the existing LDC system is st maximum capacity. D. DO NOTHING OPTION ‘The “Do Nothing” option does not mest the cbjectives of the study and is only « fallback position if none ofthe other options ere chosen for ation by the stakeholders. “The "Do Nothing” option foregoes constriction of a pipeline entirely. Asa result, the reglon will continue to grow at a certain level, but it will not hove as great a potential to bring in medium to large-sized industil/commercial firms or residential growth as it would have otnerwise hed with an expanded level of natura! gas series.V. PLAN RECOMMENDATION AND FUNDING SCENARIOS ‘A. SELECTION CRITERIA Regardless of available capacity, the project am considered each of the three primary pipeline ‘options 10 detemnie the “best fit” for the region, Critical suvcess factors and other criteria ullized in the review are listed below (inno particular order 1. Constructabilty 2. Project financing 3. Total cost to tuild and operate 4 Availability of materials and labor 5. Impact to environment © Land and rights-of-way 7, Terrain and esse of construction 8. Projected population and economic growth and related gas demand 9. Pipeline size 10, Federal, state and local rogulatory environment 11, Support of oval residents, industry and commerce 12, Impact on enlirlhistory 13. Projected evonomic growth of the region 14, Needs of residents and commercial/industrial entities 15. Existingnaural gas service and customers 16. Ability to tie-in o existing natural gas supply Location(s) B. DETERMINATION OF BEST OPTION Using these criteria, the projet team ranked the thre pipeline options in onder ofthe best ft for the region. Given the date, circumstances and pipeline expacity constraints st the point in time this stady was complete, the project team determined that the option that best suits the needs of| the easter parhandie of WV is Option 3, the South Option. Besides Option 3, there is no other option available for natural gas service in the demand volumes anticipated by the region unlest one of the other pipelines had capacity that would ‘become available st some point in time i the nesr future ‘The South Option ties iato CPOs W-B Pipetie, This pipeline is tated for a sagt expansion ‘soon as the “W-B Xpress Proje.” CPG made formal application with the FERC on 11/1/2013 to request a Cettficate of Need to expand capacity and throughput of the W-B Pipeline. CPC's board of directors approved the project for funding in October, 2014. The projec is expected to begin construction within 12-18 month following regulatory approvale, Utilizing the W-B Pipeline as the source of natural gas for an expanded gas infrastructure males sense on a siandalone basis, notwithstanding the fuct thet the other two potential sources of tural gas identified by the project team, the North Option (CPG's Mason-Dixon Pipeline) and the Best Option (Dontinioa’s PL-1 Pipeline) are a or near full capacity and unable to contract for 1B‘adltional incremental capacity iu the volumes necessary to eupport anticipated demand in the ‘easter panhandle of WV. Like the North Option and the East Option, the additional capacity chat is being built nto he W- B Pipeline is already fully subscribed by ocher natural gas shippers. However, the uiffercnce is that incremental capacity can still be made available by CPG to the eastern panhandle via backhaul arrangement. A backhaul is "paper transport” of natural gxs by displacentent against the flow on a single pipeline, so that the natural gas is redelivered upstream of its point of exci FFinully, at this eet}y poin. in the W-B Xpress Project, CPG could sill conceivably tweak the ‘model fo squeeze some additional excess capacity out ofthe system that could be used to support ‘expansion in the exster pankandle, By vise of (1) the availabilty of capacity on W-B, the upooming expansion via W-B Xpress, @) the opportunity to add capacity vie backhaul, the possibility of fine-tuning W-B Xpress for ditional incremental capacity, a (3) the potential for support by CPG, the South Option isthe best option at this time, given all supply and demand constraints, for expansion of natural gas seevies in W's eastern panhandle region, PROJECT FINANCING OPTIONS [New pipeline construction projects scem to be allover the place inthe gesrich Mareetlus end ties gas regions. In ict, atthe time this document was prepared, there urea least five mejor interstate pipelines under review or construction inthe nor, west, southeast end cental regions ‘of West Virginia. The region is exceptionally capacity-constrained and needs additional takeaway capacity built as soon as possible to get all the shale gas being produced in WV, OH and PA to market points i the northeastem, easter end southern USA as wel as southem Canada, However, the situation in the eastem panhandle is different, The region is looking for additional regional gus supply. Most pipelines under design or construstion are being designe to transport natural gas fou the production regia to residential, industrial andor commercial customers Tocated at points where existing and known future demand will alow amortization ofthe cost of the pipeline to be spresd across many customers overtime, which witl pey the expense of the pipeline cost and net the owner/operator a reasonable rte of retumn. ‘The largest hurdle facing the concept ofa new pipeline bring constructed to bring edditional gas supply into the eastern panhandleis financing. With the price tag ofthis proposed project ‘estimated to exceed one hundred million dollars, a pipeline operstor would want to hve as much ‘oF the pipcine’s eapacty sold es possible soit can cover the capital cost of construction and the ‘operstng and maintenance expense of running it once it starts transporting gas. Government assistance is also « worthwhile option to consider Midstream Operator Financing‘Meetings with multiple midstream operators indicated that they would have interest in a projest ike this if the pipeline capacity was st or near fully subscribed. However, none were interested in it knowing that fll capacity wonld likely not be reached until some unknown point in the fue, For this reason, te project team fll ht traditional midstream company would not be & ‘good fit for making this project reality Interstate Pipeline Operator ‘inancing ‘Ader identifying the major oxioing pipelines in the region and learning more about which may have available capacity, the project team reached out to CPG, operator of to of the tree pipelines tergeted as sources of natural gas supply forthe eastern panhandle. |A representative from the Thinsher project team familiar with the project and the CPG ‘organization met with CPG's Chief Commercial Officer. The meetings were conducted for the ‘panpose (1) of determining if CPG had availabe capacity te provide incremental gas service in & Tocation neat to the caster panacdle and (2) to gauge CPG's interest in working with the regional government and development cuties in the aca to assist in the development, construction and operation of a natural gas pipeline. As a result, the projec: team learned that ‘CPG would indeed be interested inthe project. Specifically, “In short, (CPG) would be willing to work with {the Thrasher project am and Region Nine} t0 ensure that the Eastern Panhandle markets could be served. As you would ‘expect, CPG needs to earn a reasonable returt on any investments to make this happen. [CPG] indicated a willingness to work creatively with us to serve the marke.” Further, “We also discussed CPG's willingness to participate in and operate « lateral to serve the Easiern Panhandle markets, Again, [CPG] indicated a willingness to ereatively price the lateral 20 that CPG ears a reasonable return. The concept of property tax abatements was ‘appealing t0 CPG given the magnitude of investment It continues to make in West Virginia. [CPG] cautioned. however, that CPO has many other investment opportunities and any investment would need tbe competitive with alterna.” Finally, “Nevertheless, f believe there isa creative solution that would Involve state regulatory support, tax abatements and market development.” PILOT Arvangement ‘A meeting was belé on October 51, 2014 between the project tem snd other infrastructure professionals to discuss finencing options for this proposed project. The key takeaway was an ‘option for infiastucture financing known as e PILOT Agreement, PILOT is an acconym for “Payment In Lieu Of Tox” PILOT arrangements are routinely employed in West Virginia to reduce or cliranate ad valores property taxes as an incentive to attract location of, or investment by, industrial or commnercieh businestes,t 1 typical PILOT arrangement, a project sponser conveys real o personal property, oF both, to ‘a governmental entity. The goveramental entity holds tte to such property, and then leases the property buck tothe private entity, Since government-owned property is generally exempt from Property taxation, the private entity is able to reduce iss property tax burden by pursuing the Sale/easeback transaction and agreeing to make payments in lieu of taxes, ‘The Wett Virginia Eeonomic Development Authority ( “WVEDAY? is the prefered entity to use for the sileleaseback acrangement, since the WVEDA’s authorizing legislation clearly states that such hase anumgsis ae considered to be for a “public purpose” and booeuce of the experience thatthe WVEDA has with such arrangements, “The key patties to work with in connection with a PILOT Agreement ate the County Commission of the county where the project will be located and the WVEDA’s executive dlivecto and stall, Because ofits vast investment in natural gas infrastuctue, gas storage fields and facilites in the state of WV, CPG has a keen interest in leaminy mare about hov a PILOT arrangement may be Utilized to assist in building a natural gas pipeline into the eastern pankandle of WY. A project Tike this will requite input, engagement and involvement from many sourees, including CPG, WVEDA, Region Nine, Thrasher, the locel economic development authorities and many others. 16t VI, ENVIRONMENTAL INFORMATION ‘A. AREA DESCRIPTION ‘Construction for the proposed project will tke place primarily on private lands, Permanent easements will neod to be acquired for the proposed gas pipeline right of way through all Jandowners associated wit the route of the proposed projec. B. AIRQUALITY Air quality will not be permanently alfocted by the proposed gas pipeline project. Temporary impacts due to dust may temporarily affect portions in the immediate vicinity of the construction, ‘but tis an be limited with proper dust contol messures. C. WATER QUALITY ‘Water quality will nt be affectd by the proposed gas pipeline projet D. TRANSPORTATION ‘Transportation will nly be negatively affected during the construction of the proposed pipeline during crossings of roadways. ‘Transportation could conceivably be positively impacted due to the availability of natural gas sud the potential for natural gas refueling stations tobe constructed to serve natural gas vehicles. E. NOISE ‘There will be noise generated from equipment during the construction of the proposed natural gas pipeline, This coise will be limited to the immediste areas of construction ax weil ag ‘securing only during construction working hours. Any temporary noise pollution due to ‘cozstruction should be iow in decibel volume and not hamnfal in any way. F, _ HISTORIC/ARCHAEOLOGICAL PROPERTIES Prospective historic areas and archaeological sites will need to be investigated for potential ‘adverse impacts prior to commencement an final routing ofthe projet G. WILDLIFE AND ENDANGERED SPECIES Potential endangered species impacts will require iavestigetion for adverse impocts price to projost startup and final routing ofthe project. " . . . | . | | |H. ENERGY New energy supplies are not required forthe constuction ofthis projet, This proposed projext will supply Jefferson and Berkeley Counties with a new souree of natural gas whieh in tum will aive residents and businesses in Jefferson County a new soutoe of energy, and in Berkeley County, additional volumes of natural gs. 1. CONSTRUCTION Construction for the proposed gas pipeline will be primarily within the permanent easement acquired from private landowners, Additional rights-of-way may need to be sequited from ‘various local and siate agencies The proposed gas pipeline installation will be performed with minimal construction equipment as is necessary to clear right-of-ways, excavate trenches, lay and cover pipes, and restore disturbed ‘areas, All construction will conform tothe Standards and Specifications of the West Virgicia and Virginia Erosion and Sediment Coniol handbooks andor other regulatory and oversight entities a required. J. FLOOD ELEVATION “The proposed gs pipeline may fll within dhe ints of various Mood plains. Appropriate permits wil be sequied. However, sie this project will involve the consuction and burying of & welded steel natural gas pipeline, no adverse impacts are anticipated. The pipeline rights-of-way ‘would be retured othe orginal contour ofthe land during the restoration process. ‘TOXIC SUBSTANCES. NNo toxic, hazardous, or radioactive substances over and above what is normally known and Ullized in welded sleel pipoline construction will be utilized or produced by this proposed improvement project L MMIGATION [No mitigation measures are currently anticipated for construction ofthe proposed gas pipeline, M. PERMITS ‘This proposed project will require the pipeline owner(s) to obtain a multitude of permits, including, but nt limited to, the following regulatory agencies: ULS. Federal Energy Regulatory Commission (“FERC”) USS. Any Corps of Engineers (“USACE”) US. Fish and Wildlife Service (USEWS”) WY Depariment of Environmental Protection "WYDEP") 18| WV Division of Netural Resources “WVDNR") WV SiatoHisoric and Preservation Office SHPO") WY Division of Highways CWVDOH") YA Deparment of Environmental Quality -VADEQ”) MD Deparment ofthe Environment 0. Other WV, VA, and MD sic and locel pemits as required by aw for pipeline constreton and operation. NN. UNAVOIDABLE ADVERSE IMPACTS, Construction of any pipeline project has certain temporary, unavoidable adverse environmental impacts. These impacts are temporary end ar listed as fellows: 1. Land disturbances necessary 10 construct pipelines, This lund distureance has the [potential to create minor soil erosion during the construction period. All Best Management Practices will be followed during construction. This will ensure any soil crosionis limited during the construction period. 2. The construction process will create dust, exhaust emissions and noise trom the equipment required to construct the project. These emissions will be managed so they are at a minimal level and will be limited to the area direcly associated with active construction 2ones and activities. 3, Vegetated areas will be disturbed during construction of the natural gas pipeline. All isturbed areas will be reclaimed and rosceded with local vegetation to ensure no long teem adverse effets RELATIONSHIP BETWEEN TOTAL SHORT-TERM USES AND LONG-TERM PRODUCTIVITY “This projects short-ierm adverse impacts would be limited to those listed in the unavoidable ‘adverue impact section. These short-term impacts wotld eroate some short-term productivity loss to the envizoament, but would have no hearing on the long-term effect on wildlife, wetlands, ‘oF historicfarcheologiesl areas, The project is anticipated (0 produce long-term productivity improvements inthe project area. P, IRREVERSIBLE AND iRRETRIEVABLE COMMITMENTS OF RESOURCES the project would require iretrievable resources necessary for the consttuetion of the system ‘upgrades, These resources would include concrete, fuels, machinery, piping materials, and ste! ‘The imeversible and icetrievable commisment of resources for tho proposed project would not bave a significant detrimental effect on the United Stare vital resources, Q. PARKS, RECREATIONAL AREAS OR OPEN SPACES ‘The proposed project will not have any adverse impact on parks, recreational areas or open spaces.| | R. GROUNDWATER, Due to the minimal depth (10” ot less) required to bury a welded steel gas pipeline, there should ‘be no effect on the quality of groundwater inthe aresVI. PROJECT SUMMARIES ‘A. PROJECT FEASIBILITY SUMMARY Region Nine is investigating the feasibility of the construction of additional natural gas {afisstructure within Jefferson and Berkeley Counties, hice options have heen identified hy the project wa: the Noxth Optioa, the Bast Option atx the South Option, OF the thee, the South Option is the best choice, primarily because i is the ‘nly option that would have capacity available within the projet timeframe. ‘This project would consist of the instalation of approximately 33 miles of ANSI 600 steel pipeline from a location in Vieginia oa the existing Columbia W-B/VBS pipeline, This pipeline ‘would then travel north into West Virginia to a tenninus point located at the intersection of Route 9 andthe Berkeley and Jefferson County border. A metering and regulation (MOR) skid ‘ill be installed atthe tp location on the existing Columbia line as well ss the at the terminus point stated above. 8, PROJECT COST SUMMARY “The projected cost of the South Option, including a 25% contingency, is approximately '$106,000,000. See Table Two, "Breakdown of Cost for New Pipeline ~ SOUTH OPTION ~ 33.0 Miles.” shown on following page: 2agjon9 Cac Fossey Study teexkdownetCost‘or Naw Pipe -SOUTHOPTICN 320 Mies 6 ANS CN Bulk 9 Cae Hanessconine andar 2 16° Pipcine Tomi temaied iene Canstston Component smeran conte | condCompnet irormenea Sees, sa degen Sede Sues al 00] owt retina Sues Tn ana) {courhnas Woreon HOW 450) 748500) [andra Acs 35000 355000] ROW Payments i200 a BOW Spas Condon Raden 2560 xm [cop sree ars aos] Timber osrage ‘anoco) s2u0m pirsctre\ wong baa a 41250] Dirt og rand Figen 1s 9500) rectal org asa ‘awn en 1 ‘s00n) Cathie retecion Dai 1250 1250 (Ground eden Rete Des 0h 250 nec Se Acquistion sod 950) meeeence Fst 1500 2550 sate ets ‘as0} iso [sears waterways ars 0) sia igi Crossing ets rm 181500] falroad Grossha Pers 700 2; [Welends Dolneston 500 2: ae racer son Teme [raepontaton 10000 330000] [staat irs000 a cas ert 500 Fr: eas Measures S00) 1 esse Tesi 500) 181500) Out 2200) 3800] rock cine Taso) "res. 0] ecg Maa 5000) 1,485.00 ck it 2.09 sec 0] [tng ahs rs Pa ounce, ee 3000) 9750) en eo) 220 0] (canage Reverdon/ine Wateg 009 3g] (conplancs tated Coes 35009 Tass.00g (commission rg 1209 3,69 [coningncies 2%. axa] zoo (real 3 Soa | § 0s a RA tne, 2004SCHEDULE ‘The schedule fr this project isto be detecmined, D. LAND & RIGHTS-OF-WAY ‘This proposed project involves both public and privete essements for constmetion of the proposed natural as pipeline. The majority of the pipeline would be located through private lands ‘equising casements to be acquired by and assigned to tue Owner. There would be sections which will require public easements such as through public road rights-of-way as well as other potential aceus, depending upon ‘inal route, such as the Appalachian Tail Corridor and various stream, crossings. During the design phase, nel alignment will be identified and the exact nuraber and lengths of private and public right-of-way will be defined. Permits for the public -ishts-of-way will be ‘obisined from the appropriate agencies and agreements with the private landowners will be ‘executed prior to construction, E, PUBLICBENEFIT ‘There are numerous public benefits that will come as a result of this project. The foremost benefit isthe availability of un adequate and safe neural gas supply tothe region, which up until row bas only had natural gs in limited quantity and availability. By design, the project will eahance the natural gas infrastructure in tho area and create additional supply of natural gas, ‘which wil in turn atract new business and industry tothe region, New business and ingiustry will create fresh and diverse employment opportunities for local residents and generate new incremental tax income for staie and local governments. Additionally, exidents seeking other sources of energy for their homes will have natural gas as an option. The construction of the pipeline itself will erste a one-time boost to the fecal economy while the projost is being. eonsteucted, Allin all, the project will have a direct positive impact on the region. Overall the ‘quality of Life would be enhanced inthe region as result of building this project F. EVIDENCE OF COMPLIANCE Region Nine has complied with West Virginia Code §5G-1-1 for procurement of engincecing services forthe generation of this repos. The procurement information has been providod inthe Section VII, “Project Documents, of this report. 2B| 1 vil, o> ozzrnermammoa PROJECT DOCUMENTS Jefferson County Natural Gas Line Extension Pre-Feasbility Aral Easter Panhandle Natural Gas Expansion Feasibility Study - Prcrement Guidelines Bastem Panhandle Natural Gas Expansion Feasibility Study - Scope of Work Engineering Service Agreement between Region Nine and The Thrasher Group Beonomnic Impact of a New Natural Ges Pipeline in Berkeley and Jefferson Counties New Customer Matrix for Peak Daily Flowrates Mountainser Gas Company of WV - Martinsburg System Overview [Breakdown of Cost for New Pipeline ~ NORTH OPTION = 31.5 Miles Breakdown of Cost for New Pipeline - EAST OPTION ~ 21.5 Miles Memo from Steptoe & Johnson - Payment in Liew of Tax (“PILOT”) Arrangements Map 1 ~ Region Nine Overall Project Map Map 2~ North Option Map Map 3 — East Option Map Map 4 ~South Option Map Map 5 ~ MGCWV System snd Existing Indusiial and Business Parks 4Jefferson County Natural Gas Line Extension Pre-Feasibility Analysis 25Jefferson County Natural Gas Line Extension Pre-Feasibility Analysis Prepared for: Jefferson County Development Authority Prepared by: Moreland Advisors, Inc. MORELAND apvisoRs. December 2013,Project Background: ln September 2013, the Jeterson County Development Authority asked Moreland ‘Advisors to examine the pre-feasiblty of extending natural gas service into Jefferson ‘County, WV. The purpose ofthis analysis and report was to uncover any signicant, insurmountable obstacies to the project movine forward. tts intended to be a precursor 10.4 more detaled “feasiilly report” which would perform a more comprehensive ‘examination ofthe economic and technical issues relative to this project. \Jetterson County has long recognized the importance of providing its clizens and ‘commercial base with the option for natural gas sarvios. As early as inthe 1990's, the ‘concept of extending natural gas further into the county had been discussed numerous times. Each time the projact was unable to demonstrate the favorable economic, ‘conditions that would prove its feasibility and the efforts lost momentum, Since that time, several conditions have changed which now make the project have a much higher Jkehood of demonstrating its feastbitty On the supply side, the United States isin the beginning stages of a shale gas revolution. Horizontal driling and hyéraulic wel stimulation techniques ("racking") have made natural gas extraction trom shel formations economically feasible. This has ramaticaly increased the supply of natural gas in the country and driven commodity ‘92s prices down to historically law levels. Wost Virginia's proximity to the Marcellas shale formation places it squarely in the heart ofthis once in a generation transformation. ‘A the same time, the lower commodity prices have caused demand for natural gas service to rise. Jefferson County has been fortunate to have several large potental gas Users ether locate in the area, or plan to expand ther existing facities. These ler “anchor tenant" users are citical to demonstrating the potential fora return on the investment necessary to bring gas service to the area. Current Condition: ‘Mountaineer Gas Company holds the franchise to provide natural gas to Jefferson County, West Virginia. Currently, the County has only one ‘acilty that receives natural {ae service. Thattaclty is the 2/0-acre plant owned by Eastman Kouak Cu., cated [ust inside the border with Berkeley County. No other locatons within the County are ‘curently served by natural gas service. (On the northern end of Jefferson County, along Route 0, the Eactorn Regional Jail Complex in Berkeley County has existing natural gas service. This facility is located approximately 9 miles outside of Jefferson County and would be the most likely starting point for servos line extension into Jefferson County Page 1 of 6 Moreland Advisors, Inc.“alkely that itmay be necessary to extend both ofthese existing gas lines into wJfferson Couniy (in a phased approach) to get the required gas rohomes nur Pressures to the correct geographic areas. Page 2 of 6 Moreland Advisors, Inc.Public Sector Meetings: (On November 6, 2013, Morotand conducted a grcup meeting with several ofthe publ sector stakeholders for this project. Attonding were representatives from: + Jefferson County Development Authority + Jatferson County Schoo! Board ‘efferson County Public Service District + Gity of Charles Town, WV + Gity of Ranson, wv + gion 9 Planning and Development Counct Alf the attendees recognized the critical nature of the project and the economic ‘development impact it could have on the County and the cties within. We discussed that this project was also coming at an opportune time as the County works through the development ofits Comprehensive Plan. Access to natural gas as a resut of this project has the potential to meaningfully alter the development pattems of the County ‘and will certainly need to be considered as the Comprehensive Plan progresses. “The public sector wil have a unique role In the project as they wil also be potertiat users of the gas servios, The Stato has mandated that municipalites begin to shift thelr vohicle fleets to natural gas. Atthe meeting, we discussed withthe Jefferson County ‘School Beard thor efforts to convert their bus fset to natural gas. Currently, they ‘consume appreximately 7,000 gallons of ciesel fuel a week to power ther floet of 120, ‘schoal busses. As tho School Board considers a new bus maintonanos facility and begins to phase into atematively sled busses, access to natural gas wil figure prominently in their decision process. In addition to the potential to serve the Schoo! Board's bus fleet wth natural gas, i is likely thatthe gas line extension wil be sited close enough to reasonably connect, ‘several existing school feclties. Those schoo! facilis include the T.A. Lowrey Elementary School, Driswood Elementary School, Wiidwood Middle Schoo! and Jefferson High School. The natural gas demand from converting these educational {alities could go a long way in helping demonstrate the feasibly ofthis project During the feasibiity phase it wil be important to etter understand the quantities of gas that these facilities could require, as wel as the potental operating expense savings @ conversion to natural gas would allow. Finally, University Healthcaro is in the planning stages of a replacement hospital for the Jefferson Medical Canter in Ranson, WV. Our understanding Is that this new facility is ‘rtical to University Healthcare's continued ability to meet the healthcare and public safety needs of Jefferson County. Natural gas service to this new faciity would be a titical step in addressing tha Jant Commission's accreditation requirement that the facility bo served by two separata fuel sources. In adeition, the reduced emissions from natural gas eervioas would aide the hospital in addressing is Air Permit requirements. Satisfying both of these ragulatory requirements is critical to the new faciity receiving its Page 3 of 8 Moreland Advisors, Inc.Certiicate of Need, which it will need to begin constuction. Once operational, the new facility and the surrounding medical campus would represent a significant source of netural gas demand in the area. Several of ho entities id mentioned that they wera stil feeling the effects of the recent ‘economic dowrium and noted that their budgets were ight. During the feasibilly phase, i will be critical to develop a financial and development strategy that is sensitive {o the fiscal reales facing the public sector In Jotfarson County, ‘While the current economic challenges facing the local government entities are a ‘concer, they should not be insurmountable. The success of this project isnot totaly ‘dependent on the ablity of te local government entities to fund 100% of the cost. Any ‘successful project strategy will require varying capital contributions from a wide range of stakenolders, 'No additional obstacles to the projects completion were uncovered from the public sector meetings. Private Sector Meetings: ‘eo In November, Moreland conducted individual meetings with a number of local businesses to confidentially discuss their current enargy usage and the relevance ofthis project to their operations. All of the businesses wo spoke with viewed the project very favorably and commended the city and county leaders for taking the iniative to move it forward. “The majoriy ofthe businesses that we interviewed are curently using propane as their heating source. With current netural gas prices, these businesses could reduce their heating fuel costs by 30-40% by switching to natural gas and each business was acutely aware of the potential cast savings. In general, these businesses felt that i ‘hey could demonstrate a 3-5 year payback period, t would justity an investment in retrofiting thelr equipment and/or contriouting tothe project itsel. With propane as @ starting point, these payback periods should be easly attainable. Itis worth noting that more than one business pointed out that they were facing some sort of outside regulatory pressure that would make a conversion to natural gas very ‘apealing, int mandatory. In some cases, that presauro was creating competion in their sector vhich was negatively impacting their business operations. in other cases, the regulatory pressure was in the form of emissions controls and environmental ‘mandates. In both cases, the benefits of switching fo natural gas would help mitgate these outside requiremenis,elther through drect cost savings or reduced greenhouse gas emissions. In addition tothe commorcial sactor companies that wo interviewed, there are also ‘several residorilal projects that have the potential to become major natural gas users. Infact, one public oficial estimated that there are over 12,000 residential units in Page 4 of 6 Moreland Advisors, Inc.various stages of permitting in the County. Wile itis unikely that al wll come to {tuition or that all that do would use natural gas, these naw units corlainly represent a ‘substantial poo! of potential new natural gas customers, Several existing housing ‘developments in the County have been built using propane tank farms to supply development wide heating fual, Thase projects could potentially convert from propane to natural gas (whon available) and sil make use ofthe exsting "ast mile” infrastructure “The private sactor appears to be very positive towards the project and recognizes the ‘economic and environmental bonefits that can be realized by converting to natural gas. ‘With an appropriate economic business case and suitable payback period, i is reasonable lo anticipate some private sector capital contributions to the project. No additional obstacles to the project's completion were uncovered from the private. ‘sector meetings. Mountaineer Gas: In the course of our analysis, Moreland contacted Mountaineer Gas and discussed with ‘them the potential fr bringing natural gas furtho into Jetferson County. The feedback {rom Mr. Larry Meador with Mountaineer was very positive on the concept and he ‘appeared very wiling to work with the various stakeholders to move the project forward. Mountainoor has an established internal process to determine the economic fessibilty ‘of extending thelr infrastructure. tis the results of this analysis that will determine ‘whothor Mountaineer will make the necessary capital investment. ‘As would be expected, demonstrated customer damand is a erieal component of their internal economic analysis. We discussed the spectic natural gas requirements for 8 ‘prospect considering Jefferson County fora new facity and Mr. Meador felt that their Usage would go a long way to proving the required demand. When coupled with the ‘existing companies in the County, there should be a substantial demand base fo justify ‘and investment by Mountaineer. In that same conversation, we did specticaly ask Nr. Meador f there were any potential roadblocks or challenges that he was aware of that would make this project unfeasible. His response was that as long as there was adsquate demand, he did not foresee any Lungurmountable chellongos. Conclusion: Moreland Advisors, Inc. has conducted its preliminary, pro-feasbilty analysis and hes rot uncovered any major issues that would prevent this project from moving forward ‘As the project progresses, there will undoubtedly be unforeseen challenges that will ‘emerge and will need to be dealt with. However, this is customary for nearly all projacts ‘ofthis size and scope, and is not unique to Jefferson County's position Page 5 0f 6 Moreland Advisors, Inc‘Our recommendation is to move to conduct a full feasibilty study that will serve to more fully quantfy the potential customer demand inthe area, examine the technical issues relative to extending the existing gas lines, and establish a pro-forme estimate of the project costs. The results ofthis study should be used as inputs for Mountaineer's ‘economic feasiality analysis. Page 6 of 6 Moreland Advisors, Ine.| Eastern Panhandle Natural Gas Expansion Feasibility Study - Procurement Guidelines 26astern Panhandle Natural Gas Expansion Feasibility study Procurement Guidlines ané cope of Work ‘The Region9 Planning and Gevelopment Counc ofthe eastern pachandl ls accepting Statement of {uslifations rom professional engineering consulting rms detalng the fr’ qualieations, technical expertise, management and staffing capabilites, references, and related prior experience fr natural gas “ntension projects Successful candidates wil provide vale fasilty for he extension of netra as line service through the esstern panhandle which profesional services may Include, but arenct limited tall information and review to determine, capacty/supplyavaiabilty, éemand, technical nana, mapping and possible time table regarding the expansion of ratual ga devery systems, Procurement of sid services wil ein accordance with Chapter SG-13 ofthe WY Code. intrested firme must submit (8) copies o all equestes information tothe Region 9 Planning and Development CCounet cf Bl|Clark Executive Director AO0 West Stephen Street, Sule 301 Martinsburg, WW 25401 Request for Qualifications must be recelved by May 2, 2024; later than 4PM . RFOYs sent via ‘acsimilesallnet be accepted. RFQ's sal be submitted in an envelope sealed with tape and ‘prominently marked on the ower le-hand corer ofthe envelop, Overight mail must alo be property labeled on the outide ofthe express envelope or package, Any RF received after closing date fd time wil not be accogted. ‘tention is dreced to the fac thatthe proposed projects) may be undertaken with a variety of State fan lcel Funds and tat al work wil be parformed in accordance with the regulations issued by such Agencies andthe State of West Virginia pertaining thereto, “The selected firm willbe requires to comply with Tite ofthe Cv Rights Act of 1964, shal provide a Confit of interest Statement and provide cefecences and proof of al certfeates and Heenses to provide services within WV. Region 9 Planning & Development Counc! wil afford fll epportunty to women-owned and minority business enterprises to submit a show o interest in response to this request and wall not discriminate ‘against ony interested firm or individual an the grounds of race, creed, color, sex, age, handicap, oF ‘national origin nthe award ofthis contact. {t's understood thatthe Region $ Council reserves the right to negotiate all elements that comprise the ‘submission and to accept o eect par oral af any submission. The Council reserves the right to reject “any oral roposalsand waive any fl regulates orto proceed otherwise when nthe best interest ‘rthe counc Proyeels shal Le vad fora period of sty doy fom the submission deadline “The Reslan 9 Coun or ts designate search committee shall evaluate the statements of qualifications and performance data and other material submitted by interested firms and select a minimum of Uree firms which, in ther opinion are best qualified to perform the desed services. Interviews with each firm selected shale conducted, which may ircude dscusions regarding anticipated concepts and ‘proposed methods of approach, The search committee shall rank, n order of preference, these three professional rms deemed tobe the most highly qualfled to provide the services required, and shall Commence potential adjustments tothe wren scope of services and price negotiations vith the highest qualifed professional frm for engingering servicesShould the Search Committee be unable 10 negotiate a satisfactory contrat with the professional firm considered tobe the mast qualified, ata fee determined tobe fai and reasonable, price negotiations ‘wth the frm of second choice shall commence. Failing acord withthe second most qualified professional fim, the committee shal undertake price negotiations withthe third most qualified professional rm. Should the Search Comets be unable to negotiate a satisfactory contract with any Df selected professional frm, ft shall select adltional professional fms in order of tel competence la quifications andi shall centinue negattlone in aecardance With these procedures until an ‘aereement Is reached, Evaluations willbe bazed onthe following criteria: relevant experience, past performance, record of completing projects on time, favorabity of efeences, the adequacy ofthe proposal in terms of ‘addressing the needs sot forth in ths RFO, andthe Speci issues sted below, ech candidate shall provide all information herein cequested A minimum of tree references where similar engineering series in terms of design and scope have been performed during the pat fve {ears shale included a pat ofthis RFQ, The engineer willbe require to enter nto writen professional series agreement with the Region 9 Counc, which wil incorporate the information ontalned inthis RFQ, The engineer shall agree to a lump sum fae orto» unit cost witha states ‘munienum fe which the project wll aot exceed. The fee shall inchude al costs associate withthe ‘Servces outlined herein Costs sometimes billed separetely @s reimbursable costs shal be deciared and Jnduded inthe lump sum amount ofthis proposal. volces shall be provided setting forth the percentage of work completed to date, establishing the amount due based on the percentoge ‘complete, less any previous amounts Professional Libilty Insurance is requied; please Indkate te level of coverage provides. please direct your questions regarding the preparation ofthe REQto Bil Clark. The Region 9 Natural Gas Committee wil review Requests for Informatio. Deadline for submitig: Apri 23, 2014. Submitted ‘proposals willbe weighted heavily towards the Firm's technical expertise and the ality to best deliver ‘the product that meets the general requirements ofthe scope of work. Please attach proposal, a minimum of three project references simi Indesign and scope, and limits of ‘coverage for professional lability insurance.j Eastern Panhandle Natural Gas Expansion Feasibility Study - Scope of Work i 7Eastern Panhandle of WV Natural Gas Service Extension - Feasibility Report ‘Scope of Work (Contract Documents~ Article 7.8.2) Process: Procurement of services was managed in accordance with Chapter 5G-1-3 of the WV Code. Interested firms submitted requested information to the Region 9 Planning. and Development Council c/o Bill Clark Executive Director, 400 West Stephen Street, Suite 301 Martinsburg, WV 25401. These RFQs were scored by an evaluation team Selected by the Gas Committee, The top scoring firms were interviewed and rescored. It is understood thatthe Region 9 Council reserves the right to negotiate all elements that comprise the submission and to acceptor reject part orallof any ‘submission. The Counc reserves the right to reject ary or all proposals and waive “any or all irregularities or to proceed otherwise when in the best interest of the Council. Proposals shall be valid fora period of sixty days from the submission deadline. ‘The enginzer shall agree to a lump sum foe or to a unit cost with a stated maximum fee which the project will notexceed. The fee shall include all costs associated with the services outlined herein, Costs sometimes billed separately as reimbursable costs shall be declared and included In the lump sum amount of this proposal. Invoices shall be provided setting forth the percentage of work completed to date, establishing the amount due based on the percentage completed, less any previous ‘amounts. Professional Liability Insurance is required; please indicate the evel of coverage provided. Overview: 1L Provide a very brief overview ofthe project history its stakeholders and the actions taken to date 2. Provide a market overview (demographic and employment) of bath Jefferson ‘County and Berkeley County, WY. Infrastructure - Determine Feasibilty of the following: 1. Extend a natural gas transmission line to WY; preference should be given to the route that wil provide the greatest future capacity or. 2, Expand capacity uf ie existing distribution main lines in Berkley County. Determine what i any capacity exists in the existing transmission mains in Berkeley County. 13, Extend a distribution main line through Jefferson County and other areas of the n panhandle. 4. Mainline availability through Maryland and Virginia should be investigated. Ease of available access should be investigated throughout the region, Preliminary Engineering: L.__Designate several routes for the gas line extensions, Each route will include @ capacity analysts, Consider impacts within economy impacts within West Virginiaa Work with local stakeholders to determine areas of projected high demand. 2, For each route define what easements would be needed to undertake ‘construction, 3, Develop aproliminary cost for each route, 4. Develop aschedule for the design, permitting, governmental review and construction ofthe gas lines Supply/Capacity: 1. Discuss the current capacity issue related to Columbia's transmission lines and Mountaineer’s existing distribution infrastructure. 2, Provide an overview of the surrounding natural gas transmission lines (MD, VA ‘and PA) and their current capacities. 1. Provide a discussion and analysis ofthe historical energy use data for the major ‘potential conversion users in both jefferson and Berkeley counties (Notall ‘companies may provide this information. 3 years of historical data preferred). 2, Plot potential users of map and show potential ROW paths to service them, 3, Provide a discussion and analysis of new development areas within jefferson. ‘County, Berkeley County and those areas planned for future growth, ‘Project Costs and Financing: 1. Provide an overview ofthe potential scope of work forthe construction of the project 2, Provide a project pro-forma demonstrating the potential costs to extend a transmission line to service the Jefferson Co,/Berieley Co. area. These will be preliminary estimates and will be formulated in conjunction with the help of Mountaincer’s internal engineering staff. 43 Provide 2 discussion and analysis of the potential financing mechanisms that ‘could be avallable to the project to Include Pederal, State and Local funding as ‘well as private funding through a public-private partnership (PPP). ‘Economic Impact: 1, Provide adiscussion and analysis ofthe economic impact thatthe investment in ‘the extension of the natural gas service into JetTerson and Berkeley Counties could provide (direct and Indirect benefits), 1. Provide adiscussion some of the key considerations thet the project will need to ‘contemplate and address as it moves forward, For each, provide a general discussion of is impact tothe project and potential ways to enhance/ mitigate those impacts. Some of the items to be addressed include, but are not fimited to: 1.1 Pipeline Safety Issues 1.2, Environmental Impacts 1.3, Historical Issues14. Installation Costs 15. Right of Way Acquisition 16, Public Service Commission 1. Provide a preliminary timeline ofthe project development including a discussion ‘of critical path items. 1. Provide a recommendation on the best path forward for the project and a discussion on the next steps to be taken. 2, Include estimates, maps and methodology for recommendationsEngineering Service Agreement between Region Nine and The Thrasher GroupSESE EASTERN PANHANDLE REGIONAL PLANNING AND DEVELOPMENT COUNCIL (REGION x) BERKELEY COUNTY, WEST VIRGINIA FEASIBILITY STUDY OF CAPACITY OF EXISTING NATURAL GAS SYSTEM AND EXTENSION OF NATURAL GAS LINE SERVICE THROUGH PORTIONS OF EASTERN PANHANDLE ENGINEERING SERVICE AGREEMENT AUGUST 2014 THRASHER PROJECT #101-015.0259 20 Wite Cats Goward «PO Bo 80 Badger, Wy iebapsgouRDusNn OIAGREEMENT BETWEEN OWNER AND CONTRACTOR FOR FEASIBILITY STUDY astem Panhandle Regional Planning and “THIS AGREEMENT is by and between Development Council ("Region 9”) Owner") and ‘The Thrasher Group, In. “Thrases”) (‘Contactor ‘Owner and Contractor hereby agree as follows: ARTICLE 1- WORK 1.01 Contractor shall complete all Work as specified or indicated in the Contact Documents, The ‘Work is generally described as follows: ‘Thrasher will prepare a Feasibiliy Study for increased capacity of existing natural gas system ‘and extension of natural gas line service through other portions of the easter panhandle in ‘accordance with Region Nine’s project scope. ARTICLE.2- PROJECT “The Project is kiown as “Eastern Panhandle Natural Gas Expansion Feasibility Sy." 2.01 The Project consists of a feasibility study to determine a business model to extend natura gk service in the eastern panhandle of West Virginia. Preliminary conceptual design, modeling, ‘mapping and cost estimates, among other engineering methods and processes, wil be utlized by the Contactor in completion ofthe work. Completion of the study shall be in accordance with the Contract Documents, The Project for which the Wark under the Contract Documents may be | | | I 1 I ! I I I I iy tetsu or enya geal eobel l ' I A 4 ‘ ‘ ' ‘Thrasher will prepare @ Feastbiliy Study for increased capacity of existing natural gas system ‘and extension of natural gas line service through other portions of the eastern panhandle in ‘accordance with Region Nine's project scope. ARTICLE 3 CONTRACT TIMES. 301 Time ofthe Essence ‘A. All-time limits for Milestones, if any, Substantial Completion, and completion and readiness for final payment as stated in the Contract Documents ae ofthe essence of the Contract | 3.02 Days to Achieve Subsiontial Completion and Final Payment | AA. The Work wil be substantially completed within ninety (90) days afer the date when the Contact Times comumenee to run as provided in Paragraph 2.01 Project, and completed ai Tea Rae Fem hon vs Or one Cai Cnet Sepa Fe) ‘abn 620 etal Saye Poin Engr fr ICDC Aa ree mattready for final payment in apcordance with Paragraph 4.01 Contract Price within ninety (50) slays after the date when the Contract Times commence fo nun. 3.02 _Liguidated Damages- There will be no liquidsted damages in this contract ARTICLE 4 CONTRACT PRICE THE LUMP SUM FEE FOR ALL SERVICES WILL BE BILLED AT PROJECT COMPLETION. THRASHER OFFERS TO PERFORM THE FEASIBILITY STUDY ITSELF FOR $40,000. LF THE STUDY LEADS TO A TANGIBLE EASTERN PANHANDLE GAS SERVICE EXPANSION PROJECT AS A RESULT OF THE STUDY, THE REMAINING $40,000 WOULD THEN BE PAYABLE IIV FULL TO THRASHER 4.01 Owner shall pay Contractor for completion of the Work in acconlance with the Contract Document an amount in current funds equal to the sum of the amounts determined pursuant to Paragraphs 4.01.4 below: ‘A. Forall Work other than Unit Price Work, a payment schedules shown below will apply: Payment of $40,000 will be made by Owner to Contractor upon project completion 2. Ifa tangible easter panhandle gas expansion project cemmences as 9 result ofthe study ‘within & period of twenty-four (24) montis after acceptance of the study by Owner, final ‘payment ofthe remining $40,000 will be made by Owner to Contractor. 13. All specific eash allowances are included inthe above price in aocordance with the General Conditions. ARTICLE 5 -PAYMENT PROCEDURES 5.02 Submital and Processing of Payments ‘A. Contractor shall submit invoice for Payment to Owner upon final completion ofthe study. 5.03 Final Payment |A. Final payment will be made by Owner to Cantractor upon final completion and acceptance of the Work in the opinion of Region 9 and the Natural Ges Committee in accordance with the scope of work and report submitted for approval ARTICLE 6 ~ CONTRACTOR'S REPRESENTATIONS. 601 Ip onder to induce Ovmer to enter into this Agreement, Contractor makes the following representations: ‘A. Contractor hes examined and caefilly studied the Contract Docaments and the other related data identified in the Bidding Documents. DCT ogni hare nn Ged Cai Cin Cota ed PD Eprints Sy ot Poel gmc or CDC ass ae tsARTICLE 7 - CONTRACT DOCUMENTS: 701 Contents A. The Contract Documents consist ofthe following: 1. This Agreement 2, ‘The Scope of work 3. The following which may be delivered or issued on or after the Effective Date of the ‘Agreement and are not anached hereto: a. Notice to Proceed B. The documents listed in Paragraph 7.01.A ae attacked to this Agreement (except as expressly noted otherwise above) ‘C. Thereaze no Contract Documents other than those listed above in this Article 7. D. The Contract Documents may be amended, modified, or supplemented with approval of both pats, ARTICLE 8 - MISCELLANEOUS 801 Terms ‘A. Terns wsed inthis Agreement will ave the meanings sisted in the Geveral Conditions and the ‘Supplementary Conditions, 8.02 Assignment of Contract A. No assignment by a party hereto of any rights under of interests in the Contract willbe binding on another party hereto without the written consent of the purty sought to be bound; and, specifically but without limitation, moneys that may become dove and moneys that are dve may ‘ot be assigned without such consent (except tothe extent thatthe effect of this restietion may be limited by law), snd unless specifically stated tothe contrary in any written consent to an sssigement, no assgament wil release o discharge the assignor from any duty o responsibility under the Cortract Documents, 803 Successors and Assions ‘A. Owner and Contractor each binds ite, its parness, successors, assigns, and legal representatives to the olher pty hereto, iis parers, succewors, assigns, and legal tepresentatives in respect to all covenants, agreements, and obligations contained in the Contract Documents "EDS Cs ed arent even Ovando Gotan Gna pn Cerri 907 Neto eyo Pern Empurn BrFICDC Age mae aedot® c804 805 Severability ‘A. Any provision or part of the Contract Documents held tobe void or unenforceable under any ‘Law or Regulation shall be deemed suchen, and ll rining provisions shal continue to be valid and binding upon Over and Contactor, who egre thatthe Cantet Documeats sal be reformed to replace such scken provision or part reo with a alid and enforceable provision that comes as close as possible to expressing Ue intention ofthe suieken provision. Conractor's Certifications A. Contmcion centfies that it has nat engaged in comup, fraxilen, cothiive, or enercive practices in competing for or in exeeuting the Contre. For the purposes of this Paragraph 805: 1, “comrupt practice” means the offering, giving, receiving, or soliciting of any thing of value likely fo influence the action ofa public official in the bidding process or inthe Contract execntion; “fraudulent practice” means an intentional misrepresentation of fats made (a) to influence the bidding prooess or the execution of the Contact to the detriment of Owner, (6) ‘edablish Bid or Contract prices at atfcil non-competitive levels, or (¢) to deprive Owner of the benefits of fiee and open competition; 3. “collusive practice” means a scheme or arrangement between two or more Bidders, with or ‘without the knowledge of Owner, a purpose of which isto establish Bid prices et artificial, ‘non-competitive levels, and 4. “cosreive practice” means harming or threatening to harm, directly or indirectly, persons or their property to influence their patciation in the bidding process or affect the execution ofthe Contact. TEE CE Sra orm ogra es On i rt Conon Conn Coren! 050 Sel Sey Posie gine te HICDC ABE perenIN WITNESS WHERFOF, Owner and Contractor have signed this Agreement, Counterparts have been Gelivered to Owner and Contractor. All postions of the Contzact Documents have been signed or have been, | identified by Owner and Contractor or on their behalf, ‘This Agreement will be effective on August 11,2014 (which isthe Effective Date of the Agreement). ‘OWNER: CONTRACTOR, ‘Easter Panhandle Regional Planning and Development Council Reg The Thrasher By: ‘Title: Executive Director pe sn PG ti the De, fos Dh ‘Adress forgiving notices: ‘Adres for giving noice: West Steen Stet, Suite 301 {600 White Ouks Boulevard ‘Matinsburg, WW 25403 Bridgeport, WY 26330 License No, ‘Where aplicabiey elated OTE TO USK: tein esr chr omer iacopaian sche Alc veep red SenSids tye ap eds Aga arenisof pee as dormers ug ren ‘of this Agreement.) ICO CE aed Frm ao Ts Ova od Cir or Ciro Oat itd a) Spb oan heat sya Pt Eerste OCDE Al se TeteEconomic Impact of a New Natural Gas Pipeline in Berkeley and Jefferson Counties »Economic Impact of a New Natural Gas Pipeline in Berkeley and Jefferson Counties Eric Bowen, Research Associate Christiadi, PhD, Research Associate John Deskins, PhD, Director December 2014(© Copyright 2014 WU Research Corporation “The euthorsthankthe fellowing people fer valuble input int this report Tou Hooker, senior manager OF fnaneal progres end nations accourts tthe West Virgina Development Ofc, Stove Christian, tvecuthe director ofthe Berkeley County Economic Development thoy and ohn Resenwaber, recive director ofthe Jefferson County Economie Development Authority‘Table of Contents Lito Figures snd Tables : 1 Market OverieM n ref 2 Five-Year Economie Development Potential Personal income. Population Economie Ips nn cecil 3a 32 33 35 CopelShOR nnn Pipeline ConstetOR concn Long-Run Economie penn Scenario 1: Food Products Manufacturer Scenario 2: Consumer Produts Manufacturer... Scenario 3: Large Pastis Manufacturer Bureau of Business & Economic ResearchList of Figures and Tables Figure 1: Total Employment. i Fieure2: Employment Distriaution by Sector... Figure 3 Berkeley and leterson Counties’ UnempioymentRate.. Figure 4: Per Capita Personal Income Growth. is Figure 5: Per Copa Personal income by County. Figure 6: Average Annual Salary by Mar Seto 2033} ons Table 1: Summary Population Profiles. * Figure 7: Employment Growth Forecast igure 8: Employment Growth Forecast by County. Figure 9: Employment Growth Forecast by Sector. Figure 10: Unemployment Rate Forecast Figure 11: Population Forecast. Table 2: Pipeline Construction Impact nn Table 3: Scenario Esonomielmpat Summary. ‘Table: Seana 2 Economie lmpact Summary. Table 5: Scenario 3 Economicmpact Summary nm1. Market Overview Berkeley and Jefferson counties are two ofthe fastest growing county economies in West Vin, notching a heathy rate of ob rowth during 2013. Alter reitering a curultive loss of approximately 4200 obs (9 percent decline) over the course ofthe Great Recesion and into the fourth quarter of 2010, the two counties have since bounced back ta ttorg pace (see Figure 1) Local payrolls have Jnsesoed Ly roughly 5,700, sae Un reoverng the bs lost ding te economledowntury, and now ‘exceed the peak level observed prior othe recession by more than 3 percent* Figure 4: Total Employment 9 Tue ouaty Regen Towns ae 6 a 700 as ons SPOR PPPS POO POE Source: soso Labo Sites roe WY oth Berkeley and efferson countes experienced varying degrees of Job losses during the economic downturn, ut the overall trajectory of growth from te beginning ofthe recovery through the fist ‘quarter of 2014 has not been identical. Berkeley County contains approximately two-thirds ofthe Jobs {ound inthe region and has ako been the biggest contributor of ob losses and gains ove the course of ‘he recesson ara economic recovery. vera berkeley reestered a net decine in employment of Nery 12 percent fom late 2007 to 2010 ending ata Itle ore than 28 thousand js, But the county hes een payrolls rebound 18 percent on a cumulative bass through eary-2014 Jefferson County recorded ‘amare moderate downturn and recovery over the past several years. Nonetheless, total payrolls at businesses located within the county are roughly a par with therr precession peak "sources orhisteraliforation are noted in ech gure.In ation to the jobs located within the region's borers, more than 40 percent ofthe region's workforce hols jb out-of stat, primarily in Nerthern Veins, suburban Maryand o Washington, 1. Although the greater Washington, OC, metro aree’s economy cotinuesto expand thank toa highly Aiversfied industrial bate, the pace of job gains nthe region have taken a it over the pat two years de tothe efets of federal budget sequestration. _Although Berkely and eterson counties have enjoyed relatively robust economic recovery, afew sectors have arcuntnd forth ln’ chavo oh grou inthe ein ever the pst few Years. gure 2 “hows the regions employment by sector. The trade transportation, and utes sector has recorsed ‘the strongest gains in employment, largely 0 8 result ofthe new Macs fulilment center in Martinsburg which tas provided the largest boost to payrolls in the region. The facity now employs approximately 1,100 cor staff for year-round operations ands expected to hie more than 2,00 short ‘erm workers ditig holiday shopping seasons. However, lca etal sector employment has also ‘tended higher fr the past wo years, as consumer spending actvy hs benefited from a healthier labor market and continued population growth. Professional and business services ims have recovered significant portion of the jobs lost during the ‘cession. The two-countyrelon’s proximity to Northern Virginia al suburban Maryland have enabled ito copture a range of business support actives for reglonal employers over the year, including, Jaga accounting and tempservices rir atv has slowed over the past yea as sequestration an weaker overal growth In federal spending have hurt companies inthe area that perform contracting td subcontracting functions for federal defense and chil agences After relatively bri drop-off in Hcg acthity uring ate 2012 and early 2033, the education and heatheare sector have seen employment levels resume thelr long-term upward tend. Overall this sector has added more than 2,000 jos inthe past decade.Figure 2: Employment Distribution by Sector anc tin Sg og ‘s stra pap ena sources Us tore aba Setter “The region's eure and hosptalty sector has loet some momentum. Several new midscale hotels and {an improved reglonal and natonalbackop for consumer and business travel and tourism spending have buoyed activity in the area, However, the expasion of gaming into Pennsyhana and more recently Maryland have leary begun to affect the Holwood Casino at Chaces Town Races, Total aces revenues (evens minus winnings] fom video lottery terminals and able garmes has fll to 421 rillon in VW state fcal year 2018 fom $582 millon in fiscal yea 2012, a drop of more then 27 percent In ation to the large numberof eslents whe comma into Maryland, Virginia and Washington, DC, to worke!federalagencies, the public rector cae a significant source of jobs thin the reson. n fc fovernment at all levels account for more than 2 nj in reglon. Asie from state and lc fovernmentoffies, the US federal goveramant has a szable presence, with offices and fal for ‘Trensury, Veteran Afar, Customs andthe National Parks Service that employ more than 4,000 workers Publ sector employment hae generally remained ft forthe past four years. State goverament payrolls inthe region have increased moderately since 2010, but the vel f local government employment has been stagnant forceveral years a a est of weak property tax revenue growth, and lagging casino and ‘cing receipts. Federal government employment nthe region has remained steady fr several yeers, {eflectng broader national trends related tothe US federal bdget situation. aImprovements have slowed down appreciably forthe construction sector in Berkeley anderson ‘counties. The pace of rew snalefamity housing starts nthe two-county region plunged nearly 90 between early 2006 and lte 2011, bottoming out at approximately 260 housing starts Shee then the ‘evel of new home contruction hes increased almost 0 percent to 610 single-family housing stars a of ‘midyear 2014, but the rate of growth hasbeen iglfieanty slower nthe past yard to stilight lending conditions a wellas vey harsh winter conditions. Nonresdemialactvty ha bean relatively imted over the past ow years, withthe Macy’ fitment center and Spring Hil High cheal representing the mast significant projets, Approximately SE7 milion in porresidential construction projects have been started over the past year across the two-rounty region, n increase of 45 percent compared to the previous £2-monthpercd but wel below levels ‘observed as recently as 2011. Sim to other parts of West Vigil, a well as the nation asa whole, spending on inrastructure ard other nonbullaing construction has remained weak nthe two-county region. Over the couse ofthe past year, $72 millon in nonbldng project have been started nthe ‘egjon with the majority of estimated spending assecated with mandated capital improvements to ‘Berkely County: wastewater treatment system In comparison to other regions in West Virgina, Berkeley and Jefferson counties conta Fmites mounts of natural resources. Most ofthe region's Jobs in natural resources and mining ate asocisted ‘with agricultural production However, since the employment cata presented hee cover businesses that ‘ay unemployment insurance taxes, large portion ofthe eons farm sector is excluded. Accordingto ‘the 2012 Census of Agere, the region contlns nes 1,200 toa farm operation that generates approximately $66 millon n cash recep fro sles, 60 percent cumulative increase since 2007. The Primary tpes of farm operation fund nthe area include ttle ranching, hoses and some apple ‘orchards. While containing fewer farm operations, eerson County accounte for more than half ofthe regions agicukural sales reelps. Overall farms there recelved $36 milion nsales during 2012 ‘The unemployment ate nthe two counties reached a peak of 8.6 percent during the fourth quarter of 2010 (Figure 3), By the end of 2013, thereon’ jobless ate hed fallen o 5.1 perce, marking 25-year low. Over the past two quarters, however, the unemployment rate har increased to 5.6 percent, Despite ‘he ncreate, the region's unemployment rate i lower compared with the sme period a year ago andi ‘more than one-half percentage polnt ower than state ad national averages. efersan County his the lowest unemployment ate inthe regon at 45 percent while Berkeley Counts obese rate (6.1 percet) is generally Ine wih tae an national averages * ate rom Mera Hl Const,Figure 3: Berkeley and Jefferson Counties’ Unemployment Rate og tatabr foe ® Wo vie ‘wo com eon SPPP POPP PSS ORS See ee maton In contrast to broader statewide trends, Bevteley and eferson counties’ ntl decine inthe unemployment ate were accompanied by sai labor fore growth a 2,000 people jlnedthe labor force between the fourth quarters of 2010 and 2012. Since that point, however, preiminry data indiate the region has experience some degree of nba force alin key 352 result of the recent ‘federal government-drven slowdown in growth occuring in Northern Virgniaand Marland subutbs of ‘the OC metro area. On «poltve nate, the two-count elon’ labor force has added neal ,000 people since the beginning of 2014 In adtion, both counties inthe regon have labo force Partipation rates well above the statewide average and infact ae several percentage points higher faomparion to the res ofthe nation. 1.1 Personal Income Fer cpit persona income in Berleley and Jeforon counties was estimated 2 naty $35,200 during Calendar year 2013, without aejusting for iation. This was down sight from the previous year, Compared to gains of 1.1 and 1.3 percent forthe state and nation, respectively (Fure 4) though ‘wages paid by cl businesses increased in 2013, wages ened by residents wh commuted outside of ‘estate actualy declined reflection ofthe Greater Weshingion, DC, economy's suggsh performance in 2013, Overall since 2008, the region has seen nominal per capita Income velsincrease tate of 19 percent pet yeor, edging pst the 1.8 percent rate of growth abrenved natinly yet logging the 28 percent average snoual gun for Wes Vegnia registered over thi time period. 5Figure 4: Per Capita Personal income Growth Index, 08100 EEE ESF EEE PES ES sauce: usburenu ot feononic ls ‘tere ar fer arly aed elenon counts estate ‘Of the two counties, resents in Jefferson County have the highest per capita ncome at roughly 139,500, puting it almost 4,000 above the statewide average and ranking t among the top fe of ‘West Vins’ 55 counties se Figure 5)-Per capa income levels in Berkeley County were lower at 132,803 Incomes tend tobe somewhat higher in efferson County since a large share of workers ‘commate nto the Washington, DC metro areawhere wages and salaries tend tobe higher. Pure 6 ‘hows average annual salaries by sector 6 Sd Garavot in 8 moc RechFigure 5: Per Capita Personal income by County West Vraia oncoy ‘000 ssim00 $4000 aocn_faB000 GND ZONE ‘441000 $48,000 Sure: Us brent Konami Ais ~ Bacon fbr oni eachFigure 6: Average Annual Salary by Major Sector (2013) ovement Ptesonalandbuense somone team snd oath earns ‘ntomaton Mandoctring Panel atti Toa tr Racor Mig "Yet, warsparaton, ond ues Ober sonices Later sr osstaty 10900 Z0;00 sie anc s0G00 e0;00 7ozG0 @n0m Suc: US Bret aor Stier 12 Population Berkeley andJetfetzon have consistently ranked as two of West Virginia's fastest growing counties over the past 20 years in terms of population (te Table 1. Between 1983 and 2013, the two counties ‘combined 0 ads roughly 61,30 residents to atotal of more than 163 thousand residents, ora net petcetage increase of 60 percent, The state's emsinng $3 counties combines to produce ane decline ‘of more than 23 10 resents. Population growth nthe two-county region has been measuraby slower ‘over the past several years as a esi ofthe recession and housing market bust leading to smaller net Inemigration flows. After fling below an annual ircrease of 1 percent in both 2011 and 2012, the pace ‘of population growth picked up sight to 1.2 percent during 2013. In terms of ts underying demographic characteristics, the two-county population does not closely resemble breader statewide conditions. For exemple, wth aelatvely younger population, Berkeley and Jefferson countes have higher bith ates an lower death rates, which lows the reglon to gain residents va natural erence ithe mini death) Foe the repln as whole the median age Is more than two yess below the state figure. The local pepuston also tends to possess higher level of ‘educational ttinment. Nearly 22 percent ofthe region's 25 years and older population held at least = bachelor’s degre during 2012. efferson County contained the highest share of college graduates in the ‘reglon, 228 percent ofthe county's residents aged 25 years and oer had received a bachelor’s or sraduate degree.‘Table 1: Summary Population Profiles Berkoley & West iginin | United states Jefferson Counties si 7 ‘otal Population (2013) 163,779, 1854300 316,128,839 ‘Population Under 18 2013) 233% 20.8% 233% ‘% Population 65 Years + (2013) 15.0% 1738 B78 Population with less than igh Schoo! Diploma 2012, of pop: | 14.2% 155K 136% asyrs) Population with High School Diploma, NoCollege (2032, %of | 36.0% 40.6% 280% op. 25 4) Population with Some Calloge 27.6% 25.3% 292% (202, % of pop. 25 yr 4) Population with Bachelors Degree or Higher (2012, % of 222% 18.7% 201% op. 25 is.) ‘median Age (2013) 388. a9 36 ‘Mean Household income (2012) $70,840) $5402 sna ‘Average Household Size (2012) 260 2a 268 2. Five-Year Economic Development Potential Economic erowthin Berkeley and Jefferson countes wil playa srong ol in determining potential demand for natural ga inthe ature, Tht ection outlines a five-year proth forecast forthe two County region. The forecasts bared on the West Virginia University Bureau of Business & Economic Research Eeonometic Medel ‘ue forecast cal forthe economcrecovery in Berkeley and Jefferson counties to continue over the next fie yeas (see Figure 7) Proected economic growth a the national level during the outlook period odes wel forthe local economy and should allow the region to enjoy above-average growth though theend of 213. We antilpate total employment wil Increase at arate of 1.3 percent per yea. Ths represents eslower rate of growth that was observed asthe region emerged fom recession, bu his wrllput the two-county reglons performance ahead of statewide ob growth (0.9 percent} and ‘moderately lower than the national average (5 percent). 8 ¥ aay fees & oroFigure 7: Employment Growth Forecast Chang, Ama *€ so ou een vest ven o% cue ™% 1% e222 2% FPF ESE ESE LESS ES ES seu ten! be tc: Wore WY NU BUR nee Mae Sal et ‘Rendell nd vn Cntr sm everterlmen Saedean repraet the ores prod “Among the two counties, the forcat call for Jefferson County to enjoy the strongest rate of growth ‘ver the net fve yeas with an expected gan of roughly 1.7 percent per year Figure 8}. Infect, Jefferson Count projected to rank as one of thestate's fastest growing couniesdutng the forecast horizon. reflectingbrosd-based improvement nthe county's econorny. Berkeley County's economy is projected to nave a slower rate o jb growth at 1 percent pe year, but wil stil outpace the statewide bverage thanks to strong contributions from construction, manufacturing and several private sevice Providing sectors, However, Berkley County's forecest contains considerable uncertainty due tothe | tsoca | isa.co fndustiat Plans Yao} 200| aol soa] soo] an] 120400 [Rewer Generation 5 _ 7 : = ia [roaraam (omer S000 | Saas | Tesogo | Pesoeoa | sesso | aaaET | Sisco | 307. so000 ‘Assad Demand Growth (20 Year window) 38.000.Mountaineer Gas Company of WV - Martinsburg System Overview 3Mountaineer Gas - Martinsburg System Overview 1+ Approamately 138 miles of astrbuton main 4596 residential atomers 287 genera saveo(emeria esters 3 transportation customers “Single source system uth Emited additonal capacity “The Matinaburg Service Centar safe with ful ve employees MARTIN! BERKELEY er soBreakdown of Cost for New Pipeline ~ NORTH OPTION ~ 31.5 Miles 32Region 9 Gas FeasibtyStady ‘Brestdown of Cast for New Pipeline - NORTH OPTON-31.5 Mies 416" ANS 600 Bl to Cass Trangmision ine Standards Ppa Tai Ene Poetne Cnsrucion Component romercovinite | _cnicoponn s [centr Sues aS Has [Endorse Se 22 2520 owt Pein sure a0 Et [curtiouss Wk on ROW 00 Ta73H lanaan Actes 35,09 a7250H Row Payments 752,09 Hs8009 ROM Special onions Bard z 2500 7850 [con Gxmage 7 2259 75585 Timer amage aE aed Berge 1259 33375 Decioral brig Sorat ad geri Ls) nz vectors ping is,ocol 77500 <7, 100 sso ents Preto Daa 1259 aa [round eds ad cer On 0 za sce Ste Acutton Tog z7350 fnerave Teste 1500 ar [ste Parma “500 ien750 rear Waterway Femme 300 Free! [igh crossing ers 3509 a aircad cosing res 7500 62 [exnasosioston 1500 aia es raccerent S500 eam Freepers 0,00 35 nti T5000 masa’ rapes 45 Mus Eas Messe 5 7 row es 5 37323) [oyout rr 22: och Cae Hs 37500) easing ware em 1at7 50 Ia hee Em ‘20000 acing, Vale, Ros Piano Wi 62500 ete 250, 787592 resets Mig 704 55000 [comotnne Felted casts 7 3 702500 [conmsonng/Pu ua 3780 consngencies at 295 7 Ho sna io Sas |S Ine 2014Breakdown of Cost for New Pipeline - EAST OPTION — 21.5 Miles 3Region Gas Feasity study freakoun of Cstfor New Pipeline -EAST OPTION 22.5 Mes 36" ANS600 Bui oa Transmssion Line Standards Ie Fipsine Toa Enna ote Construction Component average Conttia | Cat/cerponent s $ aaron Sais z Sil 5 a 7 za sin route Preimnay Sane 7 9 3,30) eourthoue Wonk on FOW 7 509 5.75] dman sees 75.000 TS] OW Payments izz00) Zaskc00| sow Speci Centon Burdon 7.09 3, crop Damage 4250 a7 [rinber um 09 set [Drectona uong bang 250 267 Dectons| ong Permis and gaara 100 225 rections Boring Tea $267 sto] be Oesign 2.09 21500] estos rotten Dn Be 5a) [Stound bods and Rect Gai “sa ea eit Acalion Tq FE [nrerenc exing 509 50 ate ers 00 3675 trams watery Pai 5,50 726d [gory cong Fos 09 sia. aioe Grosing Fermi 709 oe [WalandsDsinesion 09 3226 Foe Prociremont Ts.00 Tease ranesortation 12,60 “ns.00q Inealstion Bsn Tass as Pete 509 36750 EBS Meare 009 i075 rose Teng 5.00 uaz Oey Out 209 3 Rock Caue 00 a, seeing Meter “an 3613 rock stels 5.00 su ings, ahs Rr ig aura, 35,09 ESTFE| leer 5,09 S750] barags revenue org 0,09 3.00] [eomptane rte Css 35,000 75150] [onmisonng/ Fane 1.20 25,80 coningencis 5 2% So.) FT a Siono00| 3 e.0,000 aR Ine. 2084Memo - Payment in Lieu of Tax (“PILOT”) Arrangements 34ohn C. Stump, Esquire ‘Chase Tower, Eig Floor eae jl stump@steploejohnoncom MEMORANDUM TO: File FROM: — John Stump DATE: December 12,2014 RE: Economie Incentives - Payment in Liew of Tax Arrangements PILOT nerall Payment ia Liew of Tex Amangements (“PILOT”) are routinely employed in West ‘Virginie to reduce or eliminate ed valoreen property taxes 48 an incentive to attract location of, co investment by, industrial or commercial businesses. In a typical PILOT arrangement, a project sponsor conveys real or personal property, or both, to a govemmental entity, the governmental enty holds ttle to such property, and then leases the property back tothe pvate ‘entity, Since government-owned property is generally exempt from property taxation, the private entity is able to reduce its property tax burden by pursing the sale/leaseback transaction and agreeing to make payments in liev of taxes. The West Virginia Economic Development ‘Authority (he “WVEDA" is the preferred entity t use fer the saleeaseback arrangement, since the WVEDA's authorizing legislation clearly states that such lease arrangements are considered to be for a “public purpose,” and because of the experience that the WVEDA has with such anrangements, The key parties to work with in eomuectivn with & PILOT Agreement are the County Commission of the county where the project will be located and the WVEDA’s executive director and staff ‘Currently, there is no statutory restriction on the lengh of a PILOT Agreement. “The timettame to negotiate a saleeascback transaction and PILOT Agreement varies. If the County Commission and other county officials ace supportive ofa projec, the process might take anywhere from throe to six months. If county officals are not filly supportive, or if 1 ensarsa{ litigation is instituted, the process could take well over a year. As noted above, it isin the best interests ofthe private entity to approach county officals and the WVEDA early inthe process. For a large project, the WVEDA would doticate substantial resources in order come to aa agreement ‘artes PILOT Agreement ‘The PILOT agreement is generally negotiated between the county commission and the private entity before tcl ransfers to the county eaxtuniasion, county building commission, the WVEDA, or local development authority, and, in the case of a transfer to a development authority, the county commission is fully involved in, and kept abreast of, the plans to trnsfor the property to 4 tax exempt entity in order to abate property x, The governmental entities ‘understand that it is in theit best interest to receive some remuneration through # PILOT ‘egreement, andthe various governmental entities inthe county ate typically willing to receive an ‘amount less that the property tax that they would otherwise receive since the new business will ‘ad tothe tax base of the county asa result of hundreds, or sometimes thousands, of jobs lowing, into the county. Local authorities — the beneficiaries of ad valorem tax payments and PILOT payments alike — are involved in the PILOT process, and a writen agreement is entered into by local government officials and representatives of the private entity. Typically, paties to PILOT agreements inode the private entity thet leases the property and the County Commission, Board of Educstion, Sheriff and Assessor of the county where the property subject to the PILOT is located ‘Legal Documents and Key Language In West Virginia, thore would likely be three primary legal documents prepared in conjunction with the transfer of real and personal property to a govemmental entity in furtherance of a PILOT: 1) a facility development agreement; 2) the asset purchase and Tease ‘agreement in which the private entity transfers cetain property 1 a governmental entity and then. Teases that property back from the governmeatal entity, and 3) the PILOT agreement with the ‘County Commission, County Board of Education, County Sketiff, ancl County Assessor. AS a general matter, the three agreements should include language specifying that they are caforceable accerding to ther terms. ‘Basis of PILOT Payments ‘The recommended practice for determining an amount thatthe business entity will pay ‘under to PILOT is to agree to an amount atthe onset af the PILOT. The annual amount paid ‘under the PILOT can be level throughout the life of the project, or the payments can be sraduated. orss758I Reporting to Tax Commissioner ‘The state that deseribes the total basic stte aid allowance for public schools recognizes that cectain counties have entered into PILOT agreements in which those counties receives payments or contibutions in lieu of property taxes. W. Va. Code § 18-9A-12{c). Under this subsection, the Tax Commissioner is required to provide the State Board of Education, by January 15" of each year, a certified listing of those counties in which an adjustment o the state share sid formule resulting from a PILOT is required, slong with the amount of reveaue that is available to each county board of education in the ensuing fiscal year as a result of a PILOT. ‘Adjustments are then made fo the smount of state aid distributed to that county pursuant 0 the slate share aid formula, The private entity's PILOT would be incloded in this reporting. Distribution of PILOT Payments to Levving Bodies ‘The PILOT payments are distributed fo the various levying bodies in the county’ ~ the ‘county itself, the county school board, and municipalities if the propesty is within municipal limits - as if the payments wore ad valorem property tax payments. Esseiially, the PILOT payments are viewed a8 a “substitute” for ad valorem property texes. Each county, schoo! board and municipality in the State of West Virginia has the authority to establish a regular levy rate and, if approved by voters, an excess levy rate. ‘As a gencral rule, approximately 75% of PILOT payments are ellocated to the County Board of Education, approximately 20-25% of PILOT payments are allocated to the County ‘Commission, andthe remainder of PILOT payments are allocated to municipalities and the State of West Virgina, ‘Distribution of Lease Payments to Levving Bodies Unkike PILOT payments, lese payments are not treated as a substitute fora valorem property taxation, Distribution of lee payments are often negotiated between the governmental cnfity that will own the property and the private eatity that will lease the property from the governmental enity, The amount of lease payments is based on what the private entity and governmental agency are comfortable with, and it may be a nominal amount or it may be a more substantial amount, depending on the negotiations, ‘Typicelly, when the WVEDA is involved, the amount of lesse payments is minimal The Sate of Went Virgina ako receives mall share of property thx espe in each Coy, typically fs ha ok ealstionk 2 esse