Source: Kennebec Journal, Keith Edwards, Another natural gas proposal, January 31, 2012
AUGUSTA — The parent company of Central Maine Power announced plans Monday to bring a natural gas pipeline into the city.
“We’re in discussions with potential customers and political officials and if we get agreements with those folks — if it makes good, sound economic sense, then we’ll go ahead,” Dan Hucko, director of media relations for Iberdrola USA, a subsidiary of a Spanish energy company, said Monday.
The proposed line — if enough large commercial customers commit to using it — would initially serve the east side of Augusta. It would tap into an existing Maritimes and Northeast natural gas pipeline in the Windsor area and run along Route 17 for about 10 miles to Hospital Street, which is also Route 9, in Augusta.
It’s not affiliated with Portland-based Kennebec Valley Gas Co., which has proposed a much larger pipeline for central Maine. That 56-mile pipeline would start at an existing compressor station on the same Maritimes and Northeast pipeline in Richmond, and continue north through Gardiner and Augusta, up to Madison.
Although the proposed pipelines would be built in different areas of Augusta, they would still compete with each other.
Maine Natural Gas’ long-term plans include a second phase crossing the Kennebec River and extending along Western Avenue and Leighton Road, to the north Augusta commercial area, starting next year.
The Kennebec Valley Gas proposal would include seven miles of mainline pipe to be installed west of Interstate 95, roughly from Hallowell along Whitten Road, and continue up the western border of the city to north Augusta and Sidney in generally the same area the MNG plan would go. The Kennebec Valley plan includes 12 miles of distribution lines in Augusta, likely including Western Avenue, state property, the Marketplace at Augusta and the MaineGeneral Medical Center under construction in north Augusta.
Marc Isaacson, a principal of Kennebec Valley Gas, said Monday, “We hope this proposal does not in any way interfere with our proposal to bring natural gas service to the entire Kennebec Valley.” He declined further comment.
Brunswick-based Maine Natural Gas could apply for state and local permits this spring and could start construction on the east side of Augusta in time for service to start by the end of the year, according to Hucko.
Karen Geraghty, a spokeswoman for the Maine Public Utilities Commission, said the commission has not received an application for the new project.
Hucko wouldn’t identify what customers the firm has contacted, nor confirm whether the state government, which maintains a major office complex at the former Augusta Mental Health Institute grounds on Hospital Street, is a potential user.
Stemming from a pipeline in Windsor, the 10-mile-long line would distribute gas from a Maritimes and Northeast high pressure pipeline coming from Canada.
Maine Natural Gas has built and continues to expand systems in Brunswick, Topsham, Windham, Gorham, Bowdoin, Freeport and Pownal. It has about 2,700 customers.
Hucko said Maine Natural Gas has the financing to complete the project and will not ask for tax breaks, as Kennebec Valley Gas has done for the dozen communities affected by its $86 million proposed pipeline.
Iberdrola officials “are committed to spending money and enhancing and building out infrastructure in the United States and have the financial wherewithal to do it, when it makes financial sense,” Hucko said.
City Council action
Augusta city councilors have already approved a tax break for the Kennebec Valley Gas project. Over the 15-year agreement, the tax increment financing district would return about $1.2 million in Augusta property taxes back to the pipeline developer.
City Councilor Michael Byron, who reviewed and recommended the tax break, said he would need to more closely review the Maine Natural Gas proposal.
But natural gas, whoever brings it, would be good for Augusta, he said.
“It’s encouraging to see the market begin to heat up,” Byron said. “If it can be pulled off, by whomever, it would be significant for economic development, help keep our companies here and give them better profit margins.”
Bob Kump, CEO of Iberdrola USA, said in a prepared statement that the service to Augusta would be the third expansion of the Maine Natural Gas franchise since 2010, following recent expansions to Freeport and Bath.
“We have had a very positive response from public officials and potential customers,” Kump said. “There is a lot of enthusiasm for an energy alternative that can help Augusta area businesses and homeowners to save on energy costs while reducing their dependence on oil. We look forward to moving ahead aggressively with this project this year.”
The U.S. Energy Information Administration estimates this year’s average commercial heating fuel costs will be $8.72 per million British thermal unit for natural gas and $22.48 per million Btu for oil.
This is not the first time Maine Natural Gas has proposed to run a distribution line serving central Maine. The firm proposed a similar pipeline in 2000, but those plans were postponed, with company officials at the time saying they were instead focusing on their distribution system in southern Maine.
Three proposals could bring natural gas to the Augusta area:
* Kennebec Valley Gas Company’s plans for an $86 million, 56-mile pipeline, stretching from an existing Maritimes and Northeast compressor station in Richmond to Madison. The state Public Utilities Commission last year granted preliminary approval.
* A town of Madison proposal to bond $72 million to build a pipeline similar to what’s proposed by Kennebec Valley Gas, also from Richmond to Madison. The town has set a ballot vote March 13 on whether the town should bond for $72 million, even though residents rejected the bond proposal in a vote last November.
* Maine Natural Gas announced plans Monday to bring a natural gas distribution line from the existing Maritimes and Northeast pipeline in Windsor, about 10 miles along Route 17 to Augusta. The company says it is talking with potential large customers and, if those are successful, will file for state and local permits this spring. An estimated project cost was not disclosed.