Kentucky Frontier Gas purchased BTU Gas on August 20, 2012.
Frontier was appointed operator of BTU Gas Company on August 11, 2011 by the US bankruptcy trustee in Case No. 10-70767-TNW. The former owners of BTU were involved in a personal bankruptcy case which encumbered BTU's ability to continue operations. BTU didn't have credit to buy adequate gas supply for its customers which led to outages and the utility was in danger of bankruptcy. Separately, BTU was in jeopardy with Kentucky Public Service Commission over pipeline safety compliance.
In its operation of BTU, Frontier found the BTU system runs with inordinately high gas losses. For the last 5 months in 2011, about 59% of the gas purchased by BTU simply disappeared. Gas utilities normally average less than 3% losses. Some of this discrepancy is from leakage but a leak survey in 2010 indicates leakage is a minor issue. Some of the lost gas is due to inaccurate measurement since most BTU meters are older and were never tested as required by KyPSC.
But Frontier believes that most of the loss is simply customers taking gas without meters or payment. BTU had many "deals" to give Free Gas for various reasons - sometimes for a pipeline easement (which a distribution utility almost never buys) or as a gift to friends or churches or for local political reasons.
Such deals are not allowed by KyPSC or any other state, since all other customers must pay for any "Free" Gas given to another. By law, every customer taking gas must have a meter; there are almost no instances where Free Gas is given to any customer by a regulated utility. Frontier has installed proper meters and regulators on more than 60 properties that were taking Free Gas.
Frontier also suspects other pipeline entities take gas from illicit connections. All of these factors lead to BTU losing 2/3 of the gas it purchased which in turn was bankrupting the utility. BTU Gas was not going to survive without intervention.
Frontier made numerous arrangements for new gas supply since BTU lost all of its former suppliers. Frontier eliminated many "free" customers, fixed some leaks, and improved metering. Frontier as operator of BTU filed several Gas Cost Adjustments starting in October 2011 - a rate calculating process that every other gas utility uses. Frontier has filed quarterly GCAs since then.
Frontier is now authorized by KyPSC to consolidate BTU Gas into the Frontier brand with the same rates and rules and rights as every other Frontier customer.
In combining BTU with Frontier none of these steps were easy and or popular since the price of gas service has necessarily increased. This was particularly true for those who got "free" gas for years. If you believe you are in this group, please contact Frontier immediately.
Frontier is committed to greatly improving the service of BTU Gas and to make it up-to-date and reliable. Contact Frontier or the KyPSC if you have further questions or comments.
Who Does Frontier Serve?
Kentucky Frontier Gas is a new utility assembled from several older, more familiar Eastern Kentucky gas companies. Under Kentucky rules, every gas pipeline must offer gas service to any residence within .5 mile. This rule resulted in a lot of folks getting gas service from many different pipelines and small utility networks.
Each gas utility has to follow pipeline safety rules from US DOT and the financial and tariff rules of the Kentucky Public Service Commission. Each utility has a billing and accounting system, managers and office staff, field workers, a 24-hour emergency response center, and written standards of service.
This isn’t an easy undertaking for smaller companies with 20 or 200 customers; Frontier has now merged into one entity with ten other utility companies:
- Auxier Road Gas serves the communities of Auxier, Cliff, and the northern outskirts of Prestonsburg.
- Belfry Gas serves the communities of Belfry, Forest Hills, Goody, Hardy, Huddy, Jerry Bottom, Leckieville, Murphys Bottom, and Price.
- Blaine Gas is a former municipal gas system that serves homes, businesses, and the school around Blaine in Lawrence County.
- BTU Gas serves customers on the west side of Salyersville, Elk Creek, Lickburg, Wheelersburg, Flat Fork, Jellicoe, Mine Fork, Maggard, Coon Creek, Buffalo Creek, Lakeville, Sublett, Royalton, Oakley, Swampton, and Half Mountain.
- Cow Creek Gas serves rural customers east of Prestonsburg on Cow Creek and around Endicott.
- Cow Creek also serves former customers of Salyersville Gas and Sigma Gas in the communities of Salyersville, Mashfork, Falcon, Oil Springs, Royalton, Marshallville, Ivyton, Burning Fork, and along Abbott Creek.
- Dema Gas serves the community of Dema.
- Floyd County Gas or East Kentucky Utilities serves the communities of Allen, Dwale, Estill, Garrett, Hueysville, Lackey, Middle Creek, Minnie, and Wayland.
- Mike Little Gas serves the communities of Bevinsville, Bypro, Melvin, Weeksbury, Langley, and Goble Roberts.
- Peoples Gas was once part of Mike Little Gas and serves the Phelps community.
- Public Gas serves the communities in and around Jackson, Campton, Hazel Green, and other communities near the Mountain Parkway.
- Quality Natural Gas and Alert Oil & Gas and KLC and Interstate Gas had farm tap customers in Floyd, Johnson, Knott, Lawrence, Lee, Leslie, Letcher, Magoffin, Martin, Morgan, Perry, and Pike counties.
We’re here to stay, we’re here to grow in Eastern Kentucky.