Wednesday, March 12, 2014
AUGUSTA -- City councilors are considering joining with Gardiner and Kennebec County to seek a deal with one of two competing companies to bring natural gas via pipeline to municipal, county, school and court buildings in the two cities.
Officials intend to structure such a deal to ensure as many residents and businesses as possible can also connect to natural gas, which at current prices is cheaper than oil heat.
They would do so by basing their selection of a gas company to supply gas to public facilities with a scoring system which would give more points to the bidder who promises to bring gas to residents and businesses over the largest area of the city in the shortest amount of time.
Or, as City Manager William Bridgeo said, leverage the city's buying power to encourage the companies to run natural gas pipeline to as many residents and businesses as possible.
"There's no preference, from my perspective, of Summit over Maine Natural Gas or Maine Natural Gas over Summit," Bridgeo said, referring to the two companies competing to bring gas to the area. "You're doing this to benefit residents and businesses in the city. The companies will take care of themselves. They're both big boys, and serious, well-financed entities. This is a way for the city to assist residents and businesses."
City councilors discussed the idea Thursday, and are expected to vote on whether to do so at their business meeting next week.
Councilors in Gardiner are expected to discuss the proposal soon.
A draft of the proposal states that as a condition for providing natural gas, "the selected vendor must commit contractually to serve the buyer's public facilities, facilities owned by other public bodies (school facilities), and residential and commercial customers within the buyers' municipal boundaries."
The proposed regional request for proposals, or RFP, is modeled on a similar RFP jointly released by the towns of Falmouth, Yarmouth and Cumberland. It was worked on by Bridgeo, Gardiner City Manager Scott Morelli, Kennebec Valley Council of Governments Executive Director Ken Young and Kennebec County Administrator Bob Devlin.
Bridgeo said if city councilors approve the proposed RFP, it would be issued to both Maine Natural Gas and Summit Natural Gas of Maine, two companies competing to install and begin operating natural gas pipelines in Augusta and the rest of the Kennebec Valley.
Those two companies were the only bidders on the similar RFP issued by Falmouth, Yarmouth and Cumberland.
Councilors expressed interest in the idea.
"We want to be very open and fair in this process," Councilor David Rollins said. "We want (both companies) to put their best foot forward, and we want the company that is going to be the most aggressive. We want the opportunity in this town for both residents and businesses to be able to have service here."
However, Councilor Patrick Paradis said he has been contacted by business owners in the city concerned the drive to spread gas to as many users as possible could increase the cost of gas for larger businesses, because building gas lines to more, smaller, customers, would be more expensive than serving only larger customers.
"Are we having the businesses subsidize the residents?" Paradis asked. "We want saturation, but does that have an impact on upping the rate unnecessarily high for some of these big users?"
Ralph St. Pierre, assistant city manager and finance director, said both gas companies probably would have different tariff rates for different sizes of users, with larger users getting better rates.
St. Pierre said it would be up to the companies to indicate how much of the city they would serve, and how quickly. City officials then would consider that as they select a proposal.
Bridgeo said the companies could be required to submit a bond, or other form of funds, as part of their promise to serve a certain area of the city. If they do not make good on that promise, they could forfeit those funds.
Tim Johnston, executive vice president of Summit Natural Gas of Maine, said, before the meeting by email that his company is working with communities to sign up commercial and industrial customers and is interested in bidding on any RFP issued in the Kennebec Valley.
Dan Hucko, spokesman for Maine Natural Gas, declined to comment on whether that company would bid on an RFP from the municipalities, because it is unknown whether the RFP will be issued. However, he said, also before the meeting by email, the company plans to extend gas service throughout the Kennebec Valley, even without an RFP.
Keith Edwards -- 621-5647