Commonwealth Journal

November 1, 2012

Somerset to develop energy hub

USDA’s $8.5M loan would build unique natural gas center

by Bill Mardis
Commonwealth Journal

Somerset —  

The city of Somerset has been approved for an $8.5 million loan through the United States Department of Agriculture’s Community Facilities Program to develop and construct a modernistic energy hub.
“It was one of the largest projects approved at the close of the federal fiscal year ... they (USDA) liked the concept of the energy center ... the technology ... the potential for new jobs,” said Somerset Mayor Eddie Girdler.
Girdler said the computerized energy center, first of its kind in Ke-tucky, will monitor the city’s vast natural gas pipe-line network. It also will include offices for a new city hall.
The loan should be sufficient to build the energy hub and will be retired with natural gas revenues. No tax money will be involved, the mayor said.
The center will be energy self-sufficient with an adjacent natural-gas powered generating station that will provide more than enough electricity to operate the facility. Excess electricity produced by the generator will be put in Kentucky Utilities’ electrical grid in a trade-off deal with the city, Girdler said.
The energy hub will be located at the corner of East Mt. Vernon and College streets on what is now a city parking lot. The area will be expanded by demolition of the former Meece Hardware building on the west side of the parking lot; the former city utilities building on the west side of College Street north of the parking lot; and the current city utilities building on the east side of College Street just north of Somerset City Hall. 
The former utilities building houses the Lake Cumberland Area Drug Task Force. Girdler said the agency is in the process of relocating.
Girdler used “modernistic” several times to describe the exterior of the three-story energy hub. “There will be lots of circular glass ... plenty of open space,” he noted. The building will face west, looking over the downtown area.
The city is currently meeting provisions in a Letter of Conditions for the loan, a process that will take 60 to 90 days, Girdler said. He projected that with approaching winter, the project will be advertised for bids “ ... not earlier than April 2013.”
New city offices will be in the energy center building and the existing city hall facing East Mt. Vernon Street will be torn down to make way for a parking area.
“Natural gas is being promoted as the energy of the future,” said Girdler. “Somerset’s natural gas business has grown to the point where we can make a major impact on Kentucky and the United States.” Girdler predicted the natural gas expansion will create as many as 2,000 jobs in the region, mostly from Somerset east to Virginia and West Virginia.
Somerset Gas Company manager Dan Henderson, during an earlier interview, explained that Somerset is in a unique position in that its natural gas pipeline to the Texas Eastern terminal in Casey County crosses two other interstate transmission lines. It gives Somerset Gas Service points of connection with three major national gas transmission companies. 
“We’re like an interstate pipeline,” said Girdler, alluding to the city’s expanding natural gas business. “We run high-pressure pipelines ... we have no choice but to change our operations to protect the public.”
Somerset made a major step into the natural gas business when during a natural gas shortage in the 1970s  the city borrowed $4.5 million from Farmers Home Administration to build a natural gas pipeline into eastern Kentucky. Transmission of natural gas from previously landlocked producers ended frequent natural gas shortages in Somerset and has proven a financial success.