Tampa-Area Gas Utility Expands Through Home-Builder Market

November 27, 2000

FOR IMMEDIATE RELEASE

Use of Copper Tube for Residential Gas Distribution Makes Installation Cost Competitive with Electric

Consolidation is the name of the game among West Florida gas utilities-along with expanding the market for natural gas and propane. In 1997, TECO Energy acquired People's Gas and subsequently West Florida Gas, which serve nearly 200,000 customers in Tampa and the surrounding area.

"Three years ago," says Mike Romano, Peoples Gas senior engineer, "we were very active in sales and service-selling appliances to consumers, installing the piping and making service calls. We made a business decision to refocus our company and form partnerships with the private construction industry. Private industry has the ability and expertise to install natural gas appliances and piping as well or better than we could. We now offer training programs, partnerships and advantage buying incentives to the contractors installing gas appliances. So far, these partnerships have worked well. We continue to see the programs expand and benefit the contractor as our customer base continues to grow."

With housing starts in Tampa running at an average of 18,000 in each of the last three years, Peoples Gas saw an opportunity to expand its customer base by promoting to builders. "But builders and installers told us that gas installation costs weren't competitive with electricity," Romano says. "We decided to dig into this and find out why costs were high."

To find out what was going on in the industry-what other utilities were doing to compete effectively-Romano spent some time with ALAGASCO-the Alabama gas company-and was attracted to their 2-lb system distributed with copper tube.

"With a 2-lb system, you can install ½"- or 3/8"-diameter copper tube instead of ¾"- or 1"-rigid black pipe. The fact that copper is available in long, flexible rolls reduces labor costs tremendously," Romano says.

What Romano found out about the benefits of copper tube for gas installations became an important part of Peoples Gas Advantage Dealer program, which Romano describes as "a partnership with developers and contractor-installers" to promote gas service for new houses. The program provides information and training, sales support materials with consumer information about the benefits of a gas home, and rebates on gas-appliance installations to defray costs.

According to Billy McPhillips of Countryside Propane, Plant City, Florida, whose company took on gas-piping installations to raise cash while building its propane business, "Natural-gas usage has grown from 6 percent to 11 percent of households in just five years as a result of the Peoples Gas promotion to builders."

Lower Cost of Copper Wins Installer Support

Keith Hodge, of Hodge Plumbing, Lakeland, Florida, has installed gas-distribution piping in 65 houses at a local development called Shepherd Oaks. At first, he used either black pipe or a corrugated stainless steel tubing, which costs about $1 per foot. Brent Lipham, operations manager for the Peoples Gas Lakeland and Avon Park facilities, suggested an alternative.

"Brent saw that we were struggling with the price," said Hodge, "and he brought me copper at about 1/3 the cost of the other materials. At first I had reservations-we were putting in the CSST so fast. But now I can actually do copper faster than CSST," said Hodge. "Working with two men, I do six houses a day."

Hodge Plumbing installs all-copper distribution systems using annealed tube joined with flare fittings. The long coils and soft temper make it easy for workers to run tubing from a gas manifold up through attic space and down wall frames to each gas-fueled appliance with few joints.

Countryside Propane installers have devised a hybrid system, running soft copper tube through attics connected to shop-fabricated galvanized-steel drops for individual appliances. According to McPhillips, they have done about 1,000 houses last year with their copper system. "When the crews do all-galvanized gas piping," says Gardner Box, McPhillips partner, "they complete one, maybe one-and-a-half houses a day. Our guys do a minimum of three houses a day using our copper-galvanized system."

Copper and Gas: A Good Fit

To compete with electricity and expand our customer base, we had to work smarter, cheaper and quicker," says Romano of TECO People's Gas. "We did it with flexible copper tube.

"We contacted the Copper Development Association and asked, 'What kind of support can you give?' CDA has taken an interest in our needs and provided training, assistance with code issues, product knowledge and technical expertise. It's a good fit for the gas industry," Romano concludes.

"If you're a gas provider or gas piping installer interested in getting into the builder market, copper tube will enable you to compete more effectively," Romano explains. "If you're a gas provider that also provides installation service and you're too busy, moving to copper tube will enable you to complete more jobs in less time".

"We sat down with the individual building departments in the state to say, 'Here's what we're proposing regarding copper for gas distribution to bring the installation costs down,'" Romano said. "We pointed to The National Fuel Gas Code (NFPA 54) and SBCCI Standard Gas Code-and everybody agreed."

Operations Manager Lipham asserted, "In the long term, we needed something more economical than CSST and easier to install than black pipe. Copper is perceived as an easy-to-use material, familiar, cost-friendly- and the same plumber who does the water system can do gas piping."

"To gain share from electric and promote gas through builders and installers," Lipham says, "We needed a quality material that could give plumbers an acceptable margin. With copper we can tell the plumber he'll get volume and margin."

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