DOVER, Del., Aug. 11, 2016 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities") announced today that the Federal Energy Regulatory Commission ("FERC") approved on July 21 the application by Eastern Shore Natural Gas ("ESNG"), Chesapeake Utilities' interstate natural gas transmission subsidiary, to expand firm natural gas transportation service to Calpine Energy Services' Garrison Energy Center in Dover, Delaware. ESNG will transport 45,000 dekatherms per day ("dt/d") of natural gas to service Calpine's 309 MW electric generation plant.
"This project is an example of our ability to provide clean natural gas thereby generating long-term value for our customers, investors, employees and our communities," said Michael P. McMasters, Chesapeake Utilities Corporation President and Chief Executive Officer. "We are proud to be an integral part of providing access to natural gas, improving our environment and reducing energy costs."
The transportation service will be provided under ESNG's Off Peak ≤90 Firm Transportation ("OPT") Rate Schedule. The OPT is a firm service that was designed to provide customers with an additional service offering that better matched the specific load requirements of the customer. Calpine's Garrison Energy Center has dual fuel capability to help mitigate the effects of any potential gas interruption.
"This agreement with Calpine exemplifies our continued efforts to meet the energy needs of the region as demand for economic and environmentally friendly natural gas increases," said Steve Thompson, President of Eastern Shore Natural Gas. "Through our pipeline facilities, we're dedicated to transporting this domestic fuel source safely, reliably, and responsibly."
ESNG plans to expand its facilities with the installation of 5.4 miles of 16-inch pipeline looping and 3,550 horsepower of new compression in Delaware. These new facilities are estimated to cost approximately $38 million. ESNG estimates that it will generate at least $5.8 million of revenue annually from providing the OPT service to Calpine. Since Calpine's electric generation plant initiated operations in the second quarter of 2015, ESNG has been providing Calpine with a limited mix of short-term service solutions until the facilities associated with this project are completed.