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HILLSVILLE — A project to build a natural gas line from the Patriot pipeline to Mohawk’s Hillsville plant for between $1.5 and $1.8 million is a feasible idea, members of the Carroll Industrial Development Authority decided Tuesday.
IDA members met with Roanoke Gas Company’s John D’Orazio, who prepared a report for the effort to retain Mohawk by making a lower cost fuel source available to the carpet maker.
This came after years of apparent inaction by Atmos Energy, the company that had the rights from the State Corporation Commission to supply natural gas to this area until last year.
Carroll has a signed contract in hand from Mohawk to cooperate on the natural gas effort, County Administrator Gary Larrowe reported. There is one blank remaining for the completion date, which may fall some time in October or November.
“Mohawk is extremely happy with this project getting underway,” he said.
Still to be worked out between Carroll and the gas company are insurance matters, County Attorney Jim Cornwell explained. Errors and omissions insurance coverage for the life of the project will probably cost $80,000, and the company has asked that Carroll cover $25,000 of that.
The insurance is necessary in Cornwell’s eyes, in case anything were to go wrong. IDA member Larry Chambers made a motion to pay the $25,000 as the county’s share. The motion was approved unanimously.
Staff advised the IDA to grant Chairman Richard Slate Sr., Cornwell and Larrowe the ability to review the contract with Mohawk and approve the final version.
Member Barry Hicks made a motion to that effect and it was approved unanimously.
D’Orazio referred to maps showing proposed routes to install pipelines from the access to the Patriot tap in the area of the Carroll County Industrial Park on Expansion Drive, crossing U.S. 58 and going east to reach the manufacturing facility.
One idea involved continuing to follow U.S. 58 until around the Hickory Hills Shopping Center and the alternative would veer off sooner through some private land.
At the east end of the route, D’Orazio explored two different ideas to get gas service to Carroll County High School.
Facilities needed to get at the gas tap will probably take about half a million dollars, he said. Plans have to follow natural gas transmission company Spectra’s requirements, such as 150 feet of four-inch steel pipe, metering equipment, a heater to prevent ice build-up and an “odorizer” to give the natural gas the distinctive smell so people will be able to sense if there is a gas leak.
Most transmission companies don’t supply a tap, so having one already in place could save the project up to $100,000, D’Orazio said.
Building the line at the industrial park will enable service to Mohawk and create potential for growth, he said.
On U.S. 58, an extension could go towards Galax.
“It also provides the most effective route to get it to Mohawk.” D’Orazio said. “It provides you the best location if you want to feed the industrial park. You’re right there, and if you want to head to Galax, just head down that way. So, it gives you the best of both worlds.”
The first route would place about 7,000 feet of line in the Virginia Department of Transportation right of way, requiring a 400-foot bore to get under 58, he said. They would have to bore under Little Reed Island and Cranberry creeks.
About 5,740 feet would require easements from private property owners. Another 2,600 feet would be on Carroll property and about 640 feet on Mohawk’s land.
The second route would reduce the amount of line needed by about 500 feet and could reduce the project cost by about $100,000, D’Orazio estimated. This option would require more easements on private property.
Estimates for the costs of these routes are based on how much rock contractors might encounter along the way, he said. The more rock, the higher the cost.
The low end of the estimate for Route 1 assumes hitting 20 percent rock along the way and only dirt on the bores, he explained. Under that scenario, the cost would be around $1.47 million.
If there’s 50 percent rock on the route and all the bores go through rock, the price could go up to about $1.75 million.
His estimates found that a six-inch plastic pipe would be suitable for the amount of natural gas Mohawk would need. Plastic pipe has been widely used for natural gas under these pressures since the 1970s, D’Orazio explained. It has the advantage of no corrosion issues.
“The only downside to plastic is a backhoe tooth will go into it pretty easily,” he said. “You just got to make sure you know where your line is.”
A six-inch pipe will provide capacity for future expansions to the county governmental center and Carroll County High School.
“We did look at future expansion,” D’Orazio said. “Even if you took all the buildings that Carroll County wants to put in, the load only increases from 32 [decatherms] up to about 44 an hour.”
The pressure would be such that “ you could put every facility, every building in Hillsville/Carroll County, everything in the industrial park on this,” he said.
Roanoke Gas typically will serve a subdivision of 300 homes with a two-inch plastic pipe, he said. Individual home service lines are usually half-inch pipes.
Typical cost for a residence about 100 feet from a main line is around $1,000. Including the meter and commercial service lines are typically $5,000.
“So, the bottom line is we have plenty of capacity?” Larrowe asked.
“You have all the capacity you’ll probably ever need,” D’Orazio agreed. “You could add three more Mohawks on this line and still be in good shape.”
“I hope we will,” said authority member Andy Jackson.
D’Orazio advised against installing optical fiber with the natural gas line because it complicates matters too much with the extra equipment and work needed.
Chambers asked if the $1.75 million estimate is as high as the project costs would go.
“This is an estimate,” D’Orazio answered.
“1.7 [million] is the most it could cost?” Chambers asked.
“We believe so, based on our experience,” D’Orazio said. “You really won’t know until you put it out to bid and you get the bids in.
“These prices are typically what we get charged to put in our stuff. I can’t imagine the prices down here would be too much different than the prices up in the Roanoke area.”
When D’Orazio recommended the shorter route, Larrowe pointed out that continuing farther east on U.S. 58 would allow the possibility of picking up the shopping center in town and other potential customers.
Cornwell advised the authority members that, based on what they’ve heard in the report, they can find the next stage of the project is feasible. The next step is to determine the final project design and route.
Authority member Clinton Willie made a motion to do so. The authority approved the motion unanimously.
Natural gas should allow Mohawk to save about 33 percent over other kinds of energy, county officials said as they began studying this idea. Mohawk has told county officials it can contribute $1.5 million to help build the line.
After a closed session, the IDA members voted to set the completion date of the project for Mohawk's contract as Dec. 31, according to Larrowe. They also selected the route that falls more on U.S. 58 to potentially to serve more customers and to allow for staff to begin obtaining the easements and property needed.
They also approved a motion asking the county supervisors oppose an application from Frontier natural gas to become a service provider in Carroll County, Larrowe said after the meeting. This is because the IDA plans to build the line and to operate it.
"A Mohawk contribution should arrive 30 days after they signed the contract in the amount of $500,000 and then there will be additional monies to assist with the project," Larrowe explained about the financial aid from the company. "It is anticipated that Mohawk will pay for a substantial amount of the line."