The Times West Virginian

Business

February 3, 2013

Natural gas vehicle conversion facility to open in Morgantown

FAIRMONT — Funding from INNOVA Commercialization Group of Fairmont is helping a company meet the alternative fuel needs in the state.

INNOVA, an initiative of the West Virginia High Technology Consortium Foundation, has invested a total of $170,000 in Alternative Fuel Solutions of West Virginia LLC, which is opening a natural gas vehicle conversion facility in Morgantown.

This money was provided through the Appalachian Regional Commission and the Claude Worthington Benedum Foundation, and West Virginia Capital Access Program provided matching funds, said Guy Peduto, director of INNOVA.

The grand opening of the facility, located in the Ridgeview Business Park near University High School, is tentatively scheduled for sometime in March. AFSWV has partnered with Alternative Fuel Solutions of Pennsylvania on this project.

“All of the factors were in place to make this a successful investment,” Peduto said. “Fleet operators were looking to convert their vehicles and in many instances traveling to Pennsylvania or Ohio to have it done; the governor had provided the tax credits; we were aware of initiatives looking to establish filling stations; and West Virginia is one of the leaders in natural gas extraction. In addition, the reputation and experience of AFSPA as a collaborative partner to West Virginia entrepreneurs put all of the pieces in place.”

AFSPA, located in Mahaffey, Pa., specializes in allowing businesses to implement alternative domestic fuels, such as propane and natural gas, in order to cut down on the dependence of foreign oil in the country, said co-founder James O’Donnell, who started the business with his brother Dennis.

The company has been doing alternative fuel conversions for both on- and off-road engines for more than three years, but has also been involved in special projects for over four years.

“Our biggest push is domestic fuel freedom,” he said.

The company tries to educate people about how the systems work, and does a lot with nonprofits having a hard time dealing with their overhead costs for fuel because of high gasoline prices. AFSPA helps these organizations with the grant application and writing process to help them get funding to run their vehicles using low-cost alternative domestic fuels, which are also low-emission, O’Donnell said.

He said the Morgantown facility is the flagship location for AFSPA’s brand in West Virginia.

“We recognized early on that the state of West Virginia was heading in the right direction with tax incentives and also with state policies toward the alternative fuels,” O’Donnell said.

The state has a large source of natural gas available and there is a need for alternative fuel conversions here, so it made sense for AFSPA to move into West Virginia, he said. This will allow the company to expand and do its part to support the state.

O’Donnell said the Morgantown location will offer all the same services that are currently available in Pennsylvania, but AFSWV is going to utilize the public infrastructure that West Virginia is putting in to help with the cause. It will also provide on-site education and cater to the walk-in traffic as well.

Travis Buggey, a partner in AFSWV, said AFSWV will convert trucks and vehicles to burn natural gas in combination potentially with gasoline, diesel fuels and propane — whatever makes the most sense for the customer. It converts both gasoline and diesel engines, and also does off-road and on-road equipment.

“We offer full EPA-certified conversions of our vehicles,” he said.

The highest percentage of business will initially be fleet or company vehicles. Buggey commented that the Morgantown facility will be very customer-focused.

“We definitely want to make an economical decision for our customers,” he said. “We have a lot of experience with various conversions.”

The partnership with AFSPA will allow AFSWV to do things right and take the lead in promoting burning local fuel from West Virginia.

“It’s definitely exciting to be a part of that,” Buggey said. “It’s utilizing a local fuel source and it’s local jobs, so it’s displacing foreign oil.”

The facility will keep money in the West Virginia economy instead of exporting it elsewhere, he said.

O’Donnell said AFSPA’s partners in the West Virginia market are very familiar with INNOVA, and INNOVA’s involvement in this project will give the facility in the state some more credibility.

“I think they’re a great group,” he said of INNOVA. “I think we have similar visions. We’re on the same page.”

INNOVA, established in 2002, is headquartered at the Alan B. Mollohan Innovation Center in Fairmont’s I-79 Technology Park. It offers entrepreneurial education and skill-enhancement programs, strategic planning and business development, and a network of business expertise and access to capital that goes across the state and nation, Peduto said.

He said INNOVA’s Technical Assistance and Early Stage Investment program works “to accelerate and enhance technology commercialization through an innovative process moving new and existing technologies into the marketplace and creating high-paying, skilled employment opportunities.”

When making investments, INNOVA determines whether the entrepreneur or small business owner is ready to commit to making their vision succeed. Then INNOVA reviews the strengths and weaknesses around the technology or product development, looks at the management and operations, and considers the financial resources that are available. The organization also performs a market analysis of the investment opportunity, Peduto said.

“AFSPA was both experienced and had an excellent reputation in the industry,” he said. “With their desire to expand, the positive interest from fleet operators in West Virginia and the economic advantages of conversions here in West Virginia due to the tax credits, most pieces fell into place relatively quickly and easily.”

Peduto said the new facility in Morgantown will create new jobs. It will initially employ four to five workers, and that number could potentially double later. Discussions are also under way for a possible second West Virginia facility, which could be in Charleston.

“Our state’s fleet operators have an opportunity to dramatically reduce their transportation fuel costs, providing a competitive advantage for businesses that operate here,” he said. “As conversions increase and on-road vehicles using natural gas increase, more and more natural gas filling stations will open throughout the state. The economic impact will multiply exponentially. Finally, we can begin to displace foreign oil with natural gas produced here in West Virginia.”

INNOVA has seen an increased demand for its services in the last 18 months. During that time, INNOVA has invested a total of $1,443,500 in 10 different companies, and those entities were able to obtain an additional $3,755,000 in follow-on funding from other sources, Peduto said.

INNOVA has recently invested in Aither Chemicals’ new “cracking” technology, Air Robotics’ small unmanned aerial vehicles, Protea Biosciences’ mass spectrometer, PolyPlexx’s advanced proprietary polymer, and other projects. Right now, the organization is working with many companies in the state, as well as universities, research labs and federal institutes.

“We hope to have a major announcement on a very exciting new investment in the next few weeks, and we are currently looking at an additional three candidates for investment in the next six months,” Peduto said.

Email Jessica Borders at jborders@timeswv.com or follow her on Twitter @JBordersTWV.

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