HARRISBURG - A Senate committee overwhelmingly approved two bills to give state government a role in directing utilities to extend natural gas service to areas that lack it.

The action by the Environmental Resources and Energy Committee sets the stage for more debate in the Senate over whether public or private financing should be used to extend gas service to specific places like industrial parks. The bills sponsored by Sen. Gene Yaw, R-23, Williamsport, the panel chairman; and Majority Leader Dominic Pileggi, R-9, Chester; seek to expand the distribution lines and systems for the lower-cost gas produced by the Marcellus Shale formation. The bills are spurred by reports that half of Pennsylvanians live in regions where no opportunity exists to use natural gas as an energy source, said Yaw.

"I'm not telling people to switch," he added. "All we want to do is give them an opportunity."

One bill would require natural gas utilities to file a three-year plan with the state Public Utility Commission outlining extension projects that would be financed by the private sector. These plans would be updated every two years and the PUC would have the authority to alter plans.

Another bill would earmark $15 million from an existing state alternate energy investment fund for grants to help schools, hospitals and small businesses obtain access to natural gas.

Sen. John Yudichak, D-14, Nanticoke, ranking Democrat on the panel, voted for the bill, saying the state needs a comprehensive strategy to develop markets for natural gas.

Yudichak said he plans to offer a bill amendment in the future to create a $25 million fund overseen by the PUC to finance gas line extensions.

The Whitney Point industrial park in Newport Twp., Luzerne County, could benefit from such a fund since it lacks natural gas service and the capital to install a distribution system, he said.

"The bill puts expansion on the backs of the customer," added Yudichak.

Yaw said he's willing to discuss that issue and the proposed $15 million transfer from the alternate energy fund may offer part of the answer. A study by the Center for Rural Pennsylvania, a legislative research agency, to examine the costs of expanding natural gas service statewide is due out in August, he added.

Meanwhile, Yaw has filed a statement of financial interests for 2012 indicating he receives income from leasing property to Anadarko Petroleum Corp. as he has reported during the past several years. The statement filed annually with the state Ethics Commission requires lawmakers and public officials to list sources of direct and indirect income totaling above $1,300 annually, but not to give specific amounts.

A proposal by Anadarko to drill for natural gas on land in the Loyalsock State Forest in Lycoming County where it owns mineral rights has generated controversy in recent months. Area environmental groups have criticized Yaw for having a conflict of interest because of his chairmanship of a committee dealing with natural gas bills and the leasing income.

But Yaw said the leasing income isn't regarded as a conflict of interest under Senate rules. He said this is because he is part of a broad class of individuals receiving such income from Anadarko, one of the major natural gas companies in the region. The senator said he could invoke the same "class" clause as being one of six million Pennsylvanians who don't have natural gas service.