Saturday, April 19, 2014
AUGUSTA — Savings in heating costs and new jobs that are expected to result from natural gas now flowing into Kennebec Valley homes and businesses should also get millions in disposable income moving in the region, a gas company official told a crowd of mostly businesspeople Wednesday.
Michael Duguay, business development director for Summit Natural Gas of Maine, told attendees of a Kennebec Valley Chamber of Commerce Business Insider Breakfast the company plans to bring gas to 15,000 homes in the coming years. Duguay said those homeowners could save up to $1,500 a year in their heating costs by switching from oil to natural gas, which is cheaper. If each of those homeowners saves that $1,500 figure, it’d save them a combined $22.5 million annually. And some of that money is bound to end up being spent elsewhere in the Kennebec Valley, Duguay told the gathering of local businesspeople.
“If every customer saves $1,500 a year, it will create an economic engine of $22.5 million in our community, to be spent elsewhere,” Duguay said noting, in his former job as the city of Augusta’s development director, $22.5 million being injected into the region without a major contribution from municipalities would be considered “a home run. It means people can spend money on what they want to, not just what they have to.”
Not figured in to those annual savings is the cost of converting to natural gas from oil or other fuels, which can cost from $3,000 to $12,000, depending on how much equipment needs to be replaced.
Duguay said Summit initially thought the project would create about 450 temporary construction jobs but over the summer the company and its contractors employed nearly 700 workers.
Part of that was likely because installing pipeline in the region has been more difficult and labor and time-intensive than the firm first thought.
Duguay, referencing the difficulty of installing natural gas pipe in the region, joked that Mike Minkos, president of Summit Natural Gas of Maine, likes to say “Maine is a beautiful place above ground. It’s somewhat tough from the ground down.”
Schmid Pipeline Construction Inc., a Wisconsin contractor hired by Summit to manage construction of the pipeline’s 68 mile steel backbone, said in a lawsuit filed against Summit in December of last year it had to increase the number of workers and their hours on the job. Schmid’s $72 million lawsuit, filed after it walked off the job in November, claims Summit breached its contract and underestimated the scope of work.
Summit officials said after the chamber presentation that the dispute with Schmid and the fact more workers were hired for the project than the 450 first estimated were not related.
The arrival of natural gas in the area, both from Summit and competitor Maine Natural Gas, is also expected to lead to a major increase in work for local heating, ventilation and air conditioning contractors who convert residential and commercial heating systems to gas from other fuel sources.
Duguay said Summit’s multi-year project installing gas lines throughout the Kennebec Valley between Pittston and Madison will total $350 million when it is complete, but that doesn’t include the money to be earned by contractors converting heating systems in homes and businesses to burn gas.
He said that could be another $75 million to $100 million.
“The opportunities for plumbing and heating contractors will probably be the equivalent to the switch, years ago, from coal to oil,” Duguay said. “We’re talking, essentially, about a heating revolution that is right here on our doorstep.”
Summit and Maine Natural Gas both currently draw the gas for their pipelines from a Martimes and Northeast pipeline which brings gas from the Sable Island gas fields off Nova Scotia.
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