Real Estate & Property Law

Pennsylvania Hears About a New Gas Line Utility

By Alan Ackerman

    Tom Karam is a responsible administrator.  The question raised is whether his private company should be converted into a utility.  Will it be regulated, thereby limited in the profits?  Will the rates be fair to all, including those individual producers and landowners who are not part of his corporate umbrella?  Will the landowners be paid fair royalties, as well as initial payments?
    Utility regulation is 'tough' because one knows not where it starts or ends.  

the-times-tribune.com

The start-up company bought a 20-mile gathering line and compressor station in the Barnett Shale partially regulated as a utility in Texas. That's miniscule compared the utilities and pipelines in seven states that had been under Mr. Karam and his partners at Southern Union. From 1995 to 2001, Mr. Karam was chief executive officer of Pennsylvania Enterprises Inc. and PG Energy Inc., which included the local water and natural gas utilities. Those businesses were acquired by Austin, Texas-based Southern Union. While Mr. Karam was at Southern Union, it acquired the natural gas pipelines formerly owned by Enron and pieced together more than 18,000 miles of interstate transmission lines. The company owned utilities in several states, a liquified natural gas terminal in Louisiana and gas storage and transportation companies.

Southern Union in 2004 built what was to be its lavish corporate headquarters on Lackawanna Avenue in Scranton, but the Enron pipeline acquisition shifted the company's focus, and the company never occupied the building.

Mr. Karam, who always maintained his Waverly residence, never thought natural gas would bring him back to Pennsylvania.

This pipeline will be the first of what Mr. Karam hopes will be several Laser develops in the Marcellus region. Even after construction of the proposed pipeline, Laser Northeast will have assets of $198 million, according to the application, enough to build four more similar pipeline.

"It's exciting being part of the beginning of the Marcellus and bring investment to the area," he said. "We are on the ground floor, we will do it right, and gain a reputation for credibility, efficiency and reliability."

The public hearings will be held at Wednesday, 1 p.m. at Great Bend Hose Company 1, Church and Tannery streets in Great Bend and at 7 p.m. at American Legion Gardner-Warner Post 154, Elk Lake Road in Montrose.

Full post as published by National Eminent Domain Blog on July 15, 2010 (boomark / email).