EGG HARBOR TOWNSHIP — South Jersey Gas wants to renew its franchise agreement to deliver natural gas in Egg Harbor Township.
The township’s governing body wants to know what it’s worth to them.
“I’d say, well, maybe you can help us out a little bit,” Mayor James “Sonny” McCullough said at a recent Township Committee meeting, “as we are not being compensated as the original law states.”
Committeeman Paul Hodson said later the township should check what neighboring municipalities receive from utilities within their borders. Some suggestions from the committee included the utility paying for some or all of the township’s $60,000 heating bill at its recreation center, or extending service to all parts of the municipality. He stressed he was satisfied with the company’s service.
At issue is the gas company’s long-lapsed franchise agreement with the township. Peter Miller, the township administrator, said at the meeting the gas company recently learned that its 50-year franchise to deliver natural gas, issued by the township in 1947, ended in 1997.
Since then, Miller said that any other company that wanted to provide natural gas in Egg Harbor Township could have arguably begun laying pipes and delivering service.
The company contacted the township to renew, Miller said, saying other towns such as Somers Point routinely renewed the agreements without asking for anything in exchange.
Complicating matters is the township’s longstanding resentment of how the state handles the taxes it collects from utilities. The state has taxed the utilities’ property and distributed the proceeds to municipalities since the beginning of the 20th century. Trenton, however, began taking a growing share for itself in the 1980s.
A 2012 white paper by the New Jersey State League of Municipalities estimated that during the previous 10 years, state government diverted more than $3.4 billion in utility taxes that otherwise would have gone to municipalities.
South Jersey Gas spokeswoman Joanne Brigandi said the utility still was negotiating the franchise agreement with the township.
In an emailed statement, South Jersey Gas confirmed that the township granted the company a perpetual franchise to provide natural gas service within the township on Nov. 3, 1947. The consent included permission to use the township’s streets, and the company said this permission must be renewed by statute every 50 years.
“We are thus seeking renewed consent for the use of the streets in EHT,” the company wrote. “We are not permitted, by statute, to pay for EHT’s municipal consent.”
In an interview, McCullough said other utilities within the township have “helped us out with different things.”
Comcast, McCullough said, helped finance the township’s television studio and helped get its public access channel up and running. Atlantic City Electric agreed to cut down more trees because of storm damage.
He said the township administrator has taken the lead in negotiations, and Miller said negotiations have only begun.
“I really don’t know,” McCullough said of what South Jersey Gas could provide Egg Harbor Township. “Maybe they could help us with our ballfields, or help us with our fire departments and maybe give us a break on gas bills.”
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