Why a Natural Gas Cooperative?

You may wonder why the SEDA-COG Natural Gas Cooperative was formed. With the large abundance of natural gas in the state, we have a tremendous opportunity, but also a great challenge.

Natural gas is a clean, less expensive, local energy source – but getting it to businesses and homes is where the challenge comes in.

While there are many traditional natural gas distribution companies nationwide that provide excellent, safe delivery systems to their customers, it may be costly for them to build new infrastructure because the infrastructure is underground.

Plus, in Pennsylvania, local natural gas distribution companies are regulated by the Public Utility Commission, and have limited flexibility to set rates. Their profit ceilings may influence their willingness to provide new service.

Cooperatives, however, can be more cost-effective and efficient to market or procure natural gas service. A cooperative is based on the idea that it may be better for groups or individuals to band together for a cause instead of going it alone. In fact, many electric and telephone cooperatives were formed early in the last century to establish and promote their services, especially in rural areas of the U.S.

There are natural gas cooperatives in Pennsylvania and elsewhere, but they’re not widespread and usually are small and cover limited geographic areas. Most municipalities in the state are assigned to a specific natural gas utility’s service (or tariff) area – but some of these places don’t have nearby delivery infrastructure.

The difference with our cooperative is partnerships – we’re in it together. Instead of an isolated, individual approach, we are making a coordinated, regional effort that involves cooperation by several member counties and partnerships with stakeholders and customers to better justify new natural gas service. We’re especially trying to encourage the development of natural gas projects that will directly benefit the region’s economy – which likely wouldn’t happen if we didn’t work together.

This partnership extends to natural gas suppliers. Projects may be coordinated with local natural gas distribution companies. They may actually be the builders, owners, and maintainers of new infrastructure, while the cooperative facilitates infrastructure funding.

In other cases, the cooperative may develop, own, and operate new systems on our own if appropriate. Approaches will be tailored to each project on a case-by-case basis.

The SEDA-COG Natural Gas Cooperative hopes this great opportunity proves to be an effective way to deliver new natural gas services throughout central Pennsylvania, and we look forward to adding new counties to our membership.

As executive director, I will blog about our progress and work, and plan to have exciting successes to report. Welcome to our cooperative, and please contact me if you want to know more.

Don Kiel

Executive director, SEDA-COG Natural Gas Cooperative, Inc.