Concord — State energy officials expressed tentative support on Thursday about plans to build a natural gas facility in Lebanon, but they are still asking to see more evidence the pipeline project is financially viable.

Meanwhile, sustainability advocates opposed to the proposal argued the expansion of fossil fuel infrastructure would hamper efforts to promote renewable energy in the Upper Valley.

Several groups spoke before the state Public Utilities Commission on Thursday at a preliminary hearing to weigh in on Liberty Utilities’ plans for a natural gas distribution facility and pipeline in the Route 12A corridor.

If the company receives a natural gas franchise from the PUC, it would truck natural gas to its proposed facility, where the fuel would then be distributed to customers through an 11.5-mile pipeline into downtown Hanover.

Alexander Speidel, a PUC staff attorney, said his initial impression is that the project “would be in the public interest.” But Speidel noted the project hasn’t been able to attract an anchor customer, a concern that could work against approval.

A Liberty spokesman said the company has been working to secure a commitment from such a customer.

“(W)e have signed a letter of intent with a large industrial potential anchor customer,” spokesman John Shore wrote in an email on Thursday. “Although we don’t have any signed service agreements, we are confident that once we are awarded franchise rights, we will be able to secure other customers.”

In testimony filed with the PUC, Liberty said pipeline could serve major Upper Valley employers such as Dartmouth College, Kleen Laundry, Pike Industries, Dartmouth-Hitchcock Medical Center, Hypertherm, Timken, Alice Peck Day Memorial Hospital and several shopping centers.

But it’s not clear which, if any, of those businesses have expressed interest. Information regarding discussions between Liberty and customers has been redacted from public documents.

This is Liberty’s second attempt to gain approval for a natural gas franchise. The first was rejected by the PUC last year after the company signed an agreement with Valley Green Natural Gas, which had a competing proposal.

In February 2016, the PUC staff recommended both firms’ proposals be suspended because of questions regarding their financial feasibility. A primary concern for both projects was the failure to secure commitments from an anchor customer.

“This is a new docket. It will stand on its own merits,” Michael Sheehan, Liberty’s senior counsel, said on Thursday.

He said details for the proposal haven’t changed since the last PUC review, but the new filings attempt to better address regulators’ concerns.

“We hope to have cured (any shortcomings) with this new filing,” Sheehan said.

Brian Buckley, a staff attorney for the state Office of the Consumer Advocate, said he’s “cautiously optimistic” about the project during Thrusday’s pre-hearing. Still, his office would like to see several questions explored, including whether Liberty possesses the managerial and technical know-how to operate the business, and how it would balance customer demands with the interest of other rate payers.

Upper Valley renewable energy advocates say Liberty’s proposal could stymie plans to convert businesses to renewable forms of energy.

“Making that commitment (to the facility) might, to our community, be a bad decision on the part of Lebanon and Hanover residents, which would be regretted in the future,” said Jonathan Chaffee, a member of Lebanon’s Energy Advisory Committee and former executive director of the Lebanon Housing Authority.

Ariel Arwen, who also sits on the Energy Advisory Committee, said there’s been significant progress and interest in green energy since Liberty’s last petition.

Last December, the Sustainable Hanover Committee voted to endorse a pledge to move the town to 100 percent renewable energy by 2050. The pledge will be on the Town Meeting warrant in May and includes all energy used in town, including businesses, municipal buildings, residences and vehicles.

The Lebanon committee also took steps recently to begin amending language regarding natural gas in the city’s master plan, Arwen said.

“There’s a very strong awareness of the issues at hand in Hanover in particular, and logic would have one realize that if this system comes to Lebanon and Hanover with an average depreciation life of 40-50 years, that one cannot have both (renewable energy and natural gas),” Arwen said.

It hasn’t been determined when Liberty’s petition will move on to a full hearing for an up or down vote.

PUC staff are expected to schedule another preliminary hearing for some time next week to hear more testimony.

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.