Norwich — Norwich Public Utilities will ask city voters to support a third natural gas expansion bond totaling $9.5 million that would be placed on the November ballot in a referendum to continue running new gas lines throughout the city and also to the former Norwich Hospital in Preston.

Voters twice approved $5.5 million in bonding for expansion of the city’s natural gas system, with the entire cost covered by the additional new customers who tie into the lines. Jeffrey Brining, NPU division manager for Energy Services, told the Board of Public Utilities Commissioners Tuesday that to date, $7.8 million has been spent and the remaining $3.2 million will be exhausted by next spring.

The request for the new bond was endorsed unanimously by the utilities board Tuesday and will be forwarded to the City Council, which would have to agree to place it on the November ballot for referendum. NPU turns over 10 percent of gross revenues to the city to lower taxes, and the gas expansion would add to those revenues.

To date, 1,100 new residential and commercial customers have tied into the natural gas system and another 329 services are awaiting gas installation. The Oakland Heights mobile home park is expected to tie into the system by August, adding 153 new customers at one time, Brining said.

“Right now, at the rate we’re getting commitments for gas service, by the end of August, we might have fulfilled our gas construction (schedule) for this year,” Brining said.

NPU’s Energize Norwich program involves a partnership with the Clean Energy Finance and Investment Authority (CEFIA), Core Plus Federal Credit Union, Eastern Savings Bank, and nonprofit SmartPower. NPU offers rebates of $1,000 for new gas customers, and the program offers low-cost loans to customers to finance furnace conversions. To date, 33 loans have been processed.

The new gas expansion bond would be somewhat different, with $5.5 million dedicated to continuing expanding gas lines in Norwich, while $2 million would extend gas lines to the former Norwich Hospital — now being marketed as Preston Riverwalk — in Preston. Another $2 million would pay for automated metering.

NPU General Manager John Bilda called the $2 million for Norwich Hospital a “placeholder” to have funding in place for future potential development at the 393-acre Preston property. The town of Preston is in the process of cleaning and demolishing nearly all the buildings at the former mental health inpatient hospital and has been marketing the site to potential developers.

“Something eventually will happen there,” Bilda said. “It’s the largest piece of land in a favorable location. We would not spend that money unless there is a corresponding load (to pay for it.)”

Preston First Selectman Robert Congdon, who did not attend the meeting, later welcomed NPU’s support for the Riverwalk property and agreed with Bilda’s strategy not to spend the money until development is pending to run the line. Congdon said having funding in place could shorten the time it would take to install gas for a project.

“That makes sense,” Congdon said. It sounds like good planning. For any big development there, natural gas is the way to go.”

c.bessette@theday.com