October 22, 2012

Gas wars, round 2: Firms battle in court, town halls for natural gas pipeline rights

By Keith Edwards kedwards@centralmaine.com
Staff Writer

AUGUSTA -- The battle between two firms vying to bring a natural gas pipeline to the Kennebec Valley has entered a new and more contentious stage.

click image to enlarge

Maine Natural Gas started construction earlier this week installing a natural gas pipeline Along Route 17 in Windsor, seen above. The firm worked with the Maine Department of Transportation and its contractors to install 12-inch coated steel pipe under 11 culvert crossings that are being rebuilt this year as part of a paving project.

Photo courtesy of David Bosse/Maine Natural Gas

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* Maine Natural Gas: $19.3 million investment, creating about 40 jobs, to develop the project over the next two years, first serving state property and users on both sides of the Kennebec River in Augusta. The project includes the potential to expand, as demand warrants.

* Summit Natural Gas of Maine: $150 million investment, creating about 435 jobs, to develop project intended to serve about 15,000 residential and industrial customers by its third year of operation. The project would start in the Augusta area and the pipeline would stretch north through Waterville and end in Madison.

Source: proposals filed with state

One company has received conditional approval from regulatory officials to do the work even as the other company is already laying pipeline in the ground between Windsor and Augusta.

Meanwhile, representatives from both companies are rapidly setting up meetings with municipal officials in the communities affected by the pipeline, pitching their plans in an attempt to garner more public support.

And the question of whether Maine Natural Gas or Summit Natural Gas of Maine will win the right to bring natural gas to state facilities in Augusta is the subject of a lawsuit, putting any state action on hold.

Even so, both companies say they're moving forward with their plans to build their natural gas pipelines.

"There is enough potential demand by nonstate users in Augusta and the rest of the Kennebec Valley to make this project financially attractive," said Dan Hucko, spokesman for Iberdrola USA, parent company of Brunswick-based Maine Natural Gas. "We believe we will be able to secure long-term energy purchase agreements at the right terms from a number of key customers, and will build the pipeline regardless of what the state does. We would be happy to negotiate a contract with the state if it wants us to deliver natural gas to its facilities."

Likewise, officials of Colorado-based Summit say they are moving forward, even without a commitment from the state.

"Summit looks forward to an opportunity to serve state facilities, and in the interim, Summit is moving forward with our project to serve the broader Kennebec Valley region," said Tim Johnston, executive vice president of Summit Utilities, parent company of Summit Natural Gas of Maine.

Johnston said the company could start construction if it receives unconditional authority from the Maine Public Utilities Commission.

"We still consider the Augusta portion of the pipeline to be important to our mission," he said. "In the interim, we are exploring all options to begin construction of the Kennebec Valley project" ahead of the state seeking new proposals to provide gas to state facilities in the capital area.

Summit received conditional approval to provide natural gas in Maine from the state Public Utilities Commission on Oct. 16. Johnston said gaining conditional approval is a big step, meaning the PUC recognizes there is a need for the service and Summit has the expertise and resources to provide it.

Unconditional approval, which Johnston hopes Summit could obtain by the end of the year, would allow the firm to begin construction.

Pipeline installed

Maine Natural Gas is already laying pipe in the ground.

Hucko said the firm obtained unconditional authority from the PUC to service Maine back in 1998, and currently serves 3,000 customers in southern communities such as Bath, Brunswick, Bowdoin, Freeport, Topsham and Windham.

He said the firm is approved to lay pipe in any town in Maine where natural gas is not already being provided.

Their work bringing a natural gas pipeline from an existing Maritimes and Northeast pipeline in Windsor into Augusta and beyond has started on a small scale.

Last week, contractors installed 12-inch coated steel pipe under 11 culvert crossings on Route 17 between Windsor and Augusta for Maine Natural Gas.

Hucko said the state Department of Transportation was rebuilding the culverts as part of a paving project on Route 17, so Maine Natural Gas decided to install pipe under the culvert crossings before new pavement is put down. Hucko said it would be more expensive and disruptive to people and businesses in the area to put those sections of pipe in after Route 17 is repaved in the state project.

(Continued on page 2)

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