AUGUSTA — Summit Natural Gas of Maine, one of two companies fighting the Kennebec Valley’s natural gas war, has sent form letters to residents in the region and handed out stickers to children at the Old Hallowell Day parade last month.

The other company, Maine Natural Gas, has taken out strongly worded newspaper and radio advertisements, trying to punch holes in public opinion of the competition’s bigger pipeline plan by touting lower rates to consumers.

The public relations ramp-up could muddy the water for the thousands of potential consumers in Augusta who have to make a decision soon between Summit and Maine Natural Gas, or simply decide whether to convert their homes to using natural gas.

Maine Natural Gas spokesman Daniel Hucko said Thursday that the company’s pipeline, coming into Augusta from Windsor, will cross the Kennebec River in the next few weeks and will serve its first Augusta customers by September’s end.

Already, Hucko said, the company has signed 173 customers, 40 percent of whom are residential. Among its larger customers are the University of Maine at Augusta and the Alfond Center for Health, the new north Augusta hospital set to open in November.

Summit’s website says by 2013’s end, natural gas will be available in parts of Augusta, Hallowell, Farmingdale, Gardiner, Fairfield, Waterville and Madison.

Michael Duguay, Summit’s director of business development, didn’t respond to messages requesting comment for this story, but his company has signed big-ticket clients in wide-ranging areas, including three paper mills: Huhtamaki Packaging in Waterville, UPM Madison and Sappi Fine Paper’s Somerset Mill in Skowhegan.

On average, homeowners who switch from No. 2 heating oil to natural gas would save nearly $1,100 per year in energy costs if using standard boilers or furnaces, according to data from Gov. Paul LePage’s energy office.

In the capital area, however, each company has a distinct advantage: Summit with size, Maine Natural Gas with price.

In short, those whose homes pipelines from both companies pass by would pay less for Maine Natural Gas, particularly those who don’t have the money up front to convert their homes.

Summit, however, will pass by more homes and has better rebates for those who need money to help with a conversion.

Scope

Summit, a subsidiary of Colorado-based Summit Utilities, is building a far bigger pipeline than Maine Natural Gas is, originating in Windsor and reaching from Richmond to Madison at an estimated cost of $350 million with a larger focus on residential customers.

According to the Augusta study, it hopes to serve 15,000 residential customers from Madison to Richmond by the pipeline’s third year of operation.

The immediate focus of Maine Natural Gas’ estimated $54 million pipeline is on Augusta, where it hopes to serve 70 percent of businesses and residential customers, around 7,500 customers by the third year of operation.

The company, a subsidiary of Iberdrola USA, the owner of Central Maine Power Co., has tried to blunt criticism of the smaller scope of the plan by citing cost figures and their reputation and history in Maine.

The company, which already serves customers Windham, Gorham, Bowdoin, Topsham and Brunswick, has said it would expand to other parts of the Kennebec Valley if economically feasible.

Even in Augusta, however, Summit is thinking bigger: Maine Natural Gas plans 57 miles of distribution pipeline in Augusta, about 35 percent of the 161 miles Summit plans to build in the city. Summit is investing $95 million in the city; Maine Natural Gas, $54 million.

Summit’s goal is to convert 90 percent of residences, bringing gas mains to every neighborhood in Augusta. It also will serve residential swaths of Hallowell and Gardiner, unlike Maine Natural Gas.

Cost

In a study conducted for the city of Augusta in July, Massachusetts-based Energy Market Decisions Inc. did a side-by-side comparison of the companies’ average annual cost of gas heat to residential customers. Maine Natural Gas won out by $201 — $1,524 to $1,725.

That’s largely because Maine Natural Gas delivery rates are lower.

For residential users, Maine Natural Gas plans a monthly charge of $24.34 and delivery charges of $3.92 per decatherm for the first 5 decatherms and $3.48 per decatherm beyond the first 5, while Summit proposes a $20 monthly charge plus a delivery charge of $8.50 per decatherm.

Maine Natural Gas’ lower delivery rates for commercial consumers are helpful for securing large clients in the Augusta area. Aside from UMA and the new hospital, the company also recently signed the Senator Inn and Spa on Western Avenue.

Summit’s largest customers are the paper mills in the upper Kennebec Valley region, but it hasn’t lost Augusta.

In July, the company won a contract provide natural gas to all city property, which the company says will save the city more than $640,000 annually. Earlier that month, Summit announced a deal with Mattson Development, a commercial office property company with close to a million square feet of property in Augusta, Hallowell, Gardiner, Oakland and Waterville.

Conversion

Both Summit and Maine Natural Gas are asking customers to call them or fill out online forms to request natural gas service to their homes.

Both say they will reimburse customers for building a service line from street to the home, which often can cost around $6,000. Maine Natural Gas will reimburse up to $6,000, while Summit will reimburse up to $6,684.

However, converting the house itself is also usually a $6,000 expense, said C. John Meeske, owner of Energy Market Decisions, Inc. — $1,800 for labor and $4,200 for the parts. Customers will have to pay for most of that. Summit has the best rebate for customers looking to buy a new, high-efficiency boiler or furnace and water heater: up to $1,500. Maine Natural Gas offers up to $400 in similar rebates.

The upfront cost, however, worries Meeske, who said many low-income area residents may choose to forgo switching to natural gas because of the upfront cost of conversion — “a huge opportunity loss” bad for them in the long run, he said.

“If the guy’s coming down the road and you’ve got a way to finance it, do it,” Meeske said.

Maine Natural Gas offers on-bill financing of conversion to customers at up to 10 years, at 5 to 10 percent interest. Summit doesn’t offer financing of that sort, but it provides a free, in-home energy audit and up to six hours of air sealing work.

Meeske has said that could help customers qualify for low-interest financing through Efficiency Maine, but that agency’s executive director, Michael Stoddard, said it is unclear exactly how his agency will mesh with capital-area residents looking to convert.

Stoddard said L.D. 1559, an energy reform bill that passed in the Maine Legislature in June, will allow Efficiency Maine, a quasi-state agency that promotes efficient energy use, to allow further incentives for converting to natural gas that will be available to customers of all natural gas utilities in the state.

To Summit’s advantage, those new benefits will be stacked on top of the conversion rebates it carved out in its agreement with the Maine Public Utilities Commission, when it approved them as a utility in January.

“They will have the bigger rebate,” Stoddard said.

Michael Shepherd — 621-5632
mshepherd@mainetoday.com