DOVER — Dover officials and Chesapeake Utilities Corporation have entered into a customer advance agreement to extend natural gas to the remaining lots at the city’s premiere business center Garrison Oak Business and Technology Park.
Under the agreement, Chesapeake Utilities will add 1 mile of natural gas main to extend service to the remaining lots in the 390-acre industrial park by the end of 2023. The natural gas company already serves two businesses on the property: longtime tenants Uzin Utz and Advantech. City Manager David Hugg negotiated with Chesapeake Utilities to pay an advance of $265,986.50.
City officials approved the deal on Sept. 26.
“Natural gas is critical to many potential users, but it’s supplied by Chesapeake Utilities. Water, sewer, and electricity are the city’s responsibility and are either already in place or will be,” Hugg told the Delaware Business Times. “Typically, Chesapeake Utilities do not install gas services speculatively, instead only when there are identified users or unless a developer provides the full upfront funds.”
Customer advance agreements set up a deposit of funds to offset speculative costs to allow the utility to be installed at a property in anticipation of new users. Under the agreement, the city will be refunded a portion of the costs back based on how much natural gas tenants use and one-sixth of the cost to build the main and the cost to connect.
The deal expires after five years, but it can be extended.
“It is common practice for a city or other municipality to pursue an advance agreement for natural gas service in order to prepare a site for a commercial park such as this one,” Chesapeake Utilities spokeswoman Brianna Patterson said. “The availability of natural gas on site helps the landowner secure potential tenants that want to utilize the safe, affordable and reliable energy that natural gas provides. The number of agreements our company enters into each year is dependent upon the unique needs of the communities we serve across our service territories.”
This is not the first time Chesapeake Utilities has entered into an advanced customer service agreement with Dover. The first such agreement was around 2015 when the city worked to bring in German flooring company Uzin Utz at Garrison Oak.
At that time Chesapeake was unwilling to extend the gas service throughout Garrison Oak due to the limited number of tenants and uncertainty of the timing of future users. This time, city officials hope to extend natural gas to all possible users as interest in the business park heats up and avoids delays to construction.
Earlier this year, the Delaware Business Times reported that Byler’s Store filed plans to build in Garrison Oak. The county store with two locations in Dover and Harrington would open a warehouse and commercial bakery space, ideally to serve as space to receive and store food and products.
Dover has paid Chesapeake Utilities out of the proceeds of selling lots out of Garrison Oak, which is the city’s solely-owned industrial park.
