SPOTLIGHT REPORT

From Hometown Oneonta & The Freeman’s Journal

IF CONSTITUTION STALLS,

WOULD AMPHENOL STAY?

Lacking Supply, Gas Supplier Shifts Focus To Pennsylvania

Editor’s Note:  This “Spotlight Report” is reprinted from this week’s Freeman’s Journal & Hometown Oneonta.  Pick up allotsego.com’s sister newspapers weekly for news, features and commentary about the Otsego County regional issues.

By JIM KEVLIN • Special to allotsego.com

The future of Amphenol Aerospace’s 1,000-job Sidney plant if the state rejects the Constitution Pipeline is “a relatively minor blip from the perspective of the people who have opposed the pipeline,” says Bob Nied, Richmondville, formerly on the Stop the Pipeline steering committee.

If approved, Stop the Pipeline adherents believe, the pipeline would damage tourism, preventing job growth in that sector, and depress property values, counter-balancing Amphenol’s economic benefits, Nied said.

But Glenn Nealis, director of the Delaware County Economic Development Department, takes another view.  He pointed out that, with its $30 million annual payroll, there is no larger employer than Amphenol in his county or Otsego, and that it is on a par with Raymond Corp., the fork-lift manufacturer in Greene, Chenango County.

Natural gas for Amphenol is “very important,” said Nealis.  “They were very clear during the negotiations to keep them here that that was a key consideration, one they estimated would save them $1 million a year.”

Always in the background of the debate, the threat to Amphenol’s local future moved into the foreground last week when Leatherstocking Gas Corp., the subsidiary of Corning Inc. and Mirabito Energy Products that would build the 2-mile line to the Sidney plant, announced that, for the time being at least, it was shifting its focus to Northeastern Pennsylvania.

“You need supply to build a utility,” Leatherstocking Gas President Michael German said in an interview. “As long as there’s no supply, we’re going to focus our activity where there is supply.  But the moment supply shows up, we would move forward with Sidney, Bainbridge, Unadilla, Afton.”

Nealis’ concern was echoed by his Otsego County counterpart, Otsego Now President Sandy Mathes, who is seeking to develop job-creating sites at Oneonta’s D&H railyards the Pony Farm Commerce Park.  “It’s critical for us to supply gas to local industry,” he said. “It’s a critical project for us to grow.”

But Stop the Pipeline organizer Anne Marie Garti disagreed:  “If Amphenol wants to use gas, the company can get compressed natural gas trucked in. However, with the drop in oil prices worldwide, all fuels are cheaper now, including renewable.”

The Sidney plant has been a mainstay of Oneonta’s economy since 1924, when a Swiss company, Scintilla, began manufacturing magnetos there.  Since, it has employed generations of Otsego County people through ownership by Bendix, Allied and now Amphenol, a worldwide maker of auto, broadband, industrial and other products based in Wallingford, Conn.

The original plant was located in downtown Sidney, but after suffering significant damage in the 2006 and 2011 floods, the company considered moving.  Only a $20 million aid package from the Cuomo Administration, and the promise of significant savings from natural gas, enticed the company to build a new plant that opened this spring on Back River Road.

John Wall, then general manager of the Sidney plant, said as much in a Jan. 7, 2015, letter to Stephen Tomasik at the state DEC’s Division of Environmental Permits, which may be deciding on a permit for the Constitution any day now.

“A major part of our decision to stay in Sidney was the promise from state officials that they would assistant us in bringing natural gas service to our plant,” Wall wrote.  “…We suffer a 30-40 percent energy price disadvantage by not having access to natural gas.”

“It’s very important to us,” said Ryan Fisher, who succeeded Wall in March.  “There are many different fuel sources.  We have no problem running our factory.  But natural gas is cheaper than fuel oil or propane.  It would make us more cost effective.”

Without that advantage, other sites may be more attractive in the future, he said.  Natural-gas savings “are material,” he said, adding, “We work for Wall Street.”

County Rep. Ed Frazier, R-Unadilla, whose district is contiguous to Sidney, agreed: ““That was part of the guarantee:  They would have a gas source to cut energy costs, along with a PILOT and tax incentives.”

Frazier, who is vice chair of the Otsego County Board of Representatives, said natural-gas savings were not only important to Amphenol, but to the Village of Sidney and surrounding communities.   Former school superintendent Chuck Malloy in the financially troubled Unatego district lobbied for it; in Sidney schools, a study showed possible savings of $100,000 a year, said Frazier.  “That’s two positions,” he added.

Nealis pointed out that energy savings would benefit all major institutions – businesses, colleges, hospitals – and also homeowners who would have the option to switch to cheaper natural gas.

While business people and officials expressed concern, Stop the Pipeline and its allies can turn out several hundred Constitution foes at will at state and FERC hearings on the project.

It’s unclear what impact that can have on the governmental process, although state Sen. Jim Seward, R-Milford, who had supported “Alternate M,” a pipeline route through Otsego County, in June sent a letter to FERC opposing Kinder-Morgan’s Tennessee Pipeline, proposed to parallel the Constitution, a project of Houston-based Williams.

Nealis said he’s been at hearings where the majority of attendees were pro-pipeline.  Beyond that, he listed business groups, rather than local governments, as the main supporters of the Constitution.

In February, the Delaware County Board of Supervisors passed a resolution, not opposing the Constitution per se, but urging the DEC, “for the protection of … natural resources,” to “fully review” the pipeline project before issuing permits.

The Otsego County board, in 2013, passed a resolution supporting “Alternate M” because it would have raised  property tax revenues by some $13 million, but has been silent since the route was moved to Delaware.

For his part, German said, if the supply comes through, Leatherstocking would shift its focus back to the I-88 corridor.  (It is moving forward with contracts in Windsor, Broome County, where gas can be delivered through the Millennium Pipeline, which follows the New York-Pennsylvania line from Northeast Pennsylvania’s fracking fields into the New York Metropolitan Area.)

“You need supply to build a utility,” German said.  “As long as there’s no supply, we’re going to focus our activity where there is supply.  But the moment the supply shows up, we would move – to Sidney, Bainbridge, Unadilla, Afton.  It’s beyond Amphenol.”