September 9, 2013

State splits natural-gas contract; Maine Natural Gas gets lion's share

Summit Natural Gas was the only bidder on three projects in Vassalboro and two in Waterville, and it also received awards for six other buildings in Augusta and Hallowell

STAFF REPORT

AUGUSTA — The two companies competing to provide natural gas distribution to state-owned buildings in central Maine split the awards for the projects, with Maine Natural Gas receiving a larger share of the state's business.

Maine Natural Gas bid on 25 of 30 projects and received awards for 19 of them, including the four high-use buildings identified in the request for proposals: the Augusta Mental Health Institute power house, Cross State Office Building, Riverview Psychiatric Center and the Department of Health & Human Services main office. The awards total $965,464.

Summit Natural Gas was the only bidder on three projects in Vassalboro and two in Waterville, and it also received awards for six other buildings in Augusta and Hallowell. The 11 awards total $765,451.

Summit, a subsidiary of Colorado-based Summit Utilities, and Maine Natural Gas, a subsidiary of Iberdrola USA, were the two finalists in the state's previous bidding process, which started in 2011 and ended last year after state officials acknowledged the evaluation process was flawed and rejected all bids.

Maine Natural Gas, which had the previous winning bid before all bids were rejected, sued the state, but its lawsuit was dismissed in March.

This time the evaluation was simplified. If a bidder was determined qualified to do the work, the lowest price won. The winning bidder for the four high-use buildings also had to guarantee the availability of gas by Nov. 1 to provide savings this heating season.

"Connecting these state facilities to natural gas will drastically reduce their annual heating costs," Gov. Paul LePage said in a statement Monday. "This is consistent with our administration's message of fiscal responsibility and lowering energy costs in Maine. Natural gas is an affordable energy resource, and expanding this service to state facilities is expected to save millions of taxpayer dollars."

The awards by the Bureau of General Services are conditional upon approval by the State Purchases Review Committee and the successful negotiation of contracts.

In a statement released on Monday afternoon, Maine Natural Gas said it will immediately begin contract negotiations with the Bureau of General Services and will be able to deliver natural gas to its first Augusta customers by the end of September.

"We are pleased the state selected Maine Natural Gas to deliver energy to their facilities in Augusta for the next ten years," Iberdrola USA CEO Bob Kump said in the statement. "It's a strong validation of our business model and our commitment to safely deliver affordable natural gas to the residents, businesses and institutions of Augusta and across Maine."

A spokesman for Summit Natural Gas did not immediately return a call seeking comment Monday.

In the coming weeks, contractors will have the opportunity to bid on converting the buildings to be heated with natural gas, and the purchase of the gas itself is the final step.

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